How To Position During A Market Crash | Weekly Roundup

What you want to do when the prices go down, like the math would say, prices go down 10%, buy the things that you really, really, really strongly believe and just hold them for years. Prices go down another 10%, just keep buying if you have the cash, obviously, and just, just hold them and close your eyes and don't try to trade around these types of events. Just hold them for years. For me, I'm buying these kinds of environments. There's probably going to be more extreme volatility. But to me, I think that's a characteristic of a Trump presidency. Not characteristic of April 2025.

This episode is brought to you by SKALE, the next evolution in Layer 1 blockchains. Explore the gas-free ecosystem at scale.space/ecosystem and follow their journey on X @skale_network. Thanks to SKALE for making today's episode possible.

All right everyone, welcome back. I should say welcome to, uh, our first episode in the brand new studio.

It's not brand new, I just haven't been here in a while.

Yeah, in the studio that Santi is brand new.

It's a great studio. I see there a YouTube, uh, I've actually never seen that in person. It's like Blockworks passing 100,000 subscribers. So that's what you get, right?

Yeah, that's what you get.

How long ago, how long ago did that happen?

Look at this thing. Presented to Blockworks for passing 100,000 YouTube subs.

Can I hold up?

That's nice.

This is solid.

Yeah.

When are we gonna get the million one? Is that the next milestone?

You know, it's actually— we don't have the best— oh, oh, got a little mirror in it. We don't love to see that. We've got this like house of brand strategy, right? So we used to just have one channel. Now we've got like all these channels.

Oh, right. Yeah, yeah.

But Empire is at like 20 now, I think.

20,000.

Yeah, so we'll be there soon. We just—

I mean, we got a 100x out. Yeah, rookie numbers.

Rookie numbers.

Uh, so but they won't count like the whole— it's not the whole. Yeah, exactly.

But we have one channel that's like 200 now, or maybe 150.

That's just for guidance. Yeah, that's really good, that macro stuff.

By the way, shout out Ford Guidance, they nailed— I think it was the single best podcast, pontificator, media channel, newsletter, whatever you want to call, uh, of all the media channels out there. I think Ford Guidance, Quinn and Felix just nailed this, what was going to happen since, uh, I think Quinn and probably Joseph Wang, uh, were the only bearish guys post-Trump post-inauguration in November. Yeah, I was, I was very bullish.

I was, you know, we're going to talk about that in the pod, but we are recording them tomorrow.

We're recording with them tomorrow and then that'll be released on Monday.

So we're doing a big markets episode tomorrow that goes out on Monday for people that want to hear the now, the skinny, like why were they bearish out of curiosity going into like after the election?

You got to wait. Got to wait till Monday.

You got to go listen to it. You got to go and have your friends subscribe to the channel so that we can get another one of those.

Exactly. All right. Before we talk markets, Uh, how's the New York trip?

That's great. Yeah, very, very good. I mean, we're opening our office here outside this studio. Is my first hire, uh, which we, uh, pumped. Yes. Yeah, honestly, it's a bit nerve-wracking hiring people. Yeah, you have to just— but the convincing side, everyone that I keep talking to is like, this is one of the most ambitious things I've heard. Um, we're glad someone's doing it, which I think is really rewarding. Yeah, people haven't believed in the mission. I mean, I'm sure like when you were getting started, there like your first hires, like, you know, you know what's really nerve-wracking is when you start hiring people who are older than you. Oh, really? Yeah.

Because I think your first hire is younger than you and you're— but when you hire like a, you know, like a real human, like a 50-year-old person, like, you know, it's like a real human being who has children and stuff. That's when it starts. You're like, oh crap. All right.

So we were talking about this because we grabbed dinner. Great spot, by the way.

Yeah.

Of this idea of like hiring really senior people from outside of crypto. And or versus hiring someone like super experienced from like a Bloomberg, right, for what you're trying to do, versus hiring someone that is less experienced, a bit crazier, more agile. And like, maybe you won't talk about it, but like I think about that a lot, right, is like who to hire.

Yeah, I mean, your first 10 hires dictate the whole company. You get one of those wrong, I mean, it's not like it's not going to work out, but like you're fighting an uphill battle. Yeah, all 10 of those will dictate the culture and the speed and the, the, the like caliber of execution of the whole company.

So I was very careful.

First one's good.

First hire. Yeah. You know, it's like the wow factor because I, I hired her and like 30 people reached out every day. I gave someone to reach out and say, wow, like it's always the wow.

Yeah. Wow, you guys are great.

And I was like, okay, I want to hire more.

So how many more people are you hiring right now? What open roles?

There's two main roles that I want to fill. One is private equity person. So at one point I'll hear a crazy story about we're looking at a big acquisition and I literally have like— I was in the stand earlier. I bought this book, of course, in classic fashion. We talk about this a lot.

Barbarians at the Gate.

I actually worked for the guy, Scott, who was the first associate at KKR, ended up starting Sageview. He did the deal, the Nabisco deal, which at the time was massive. So the idea of Barbarians at the Gate, it's like you have to be hostile, you got to knock knock on the door. Yeah, you're not welcome to the—

that's the classic version of—

yeah, like, I felt like that. I, I feel like I'm civilized, right? But, you know, everyone discounts you because you're like, who are you?

Why do you want— you're saying in this current deal?

Yeah, like, you know, Company X is up for sale. I knew about it. I was like, I want to get in, like, let me in. And they're like, who are you?

I'm like, yeah, they think you're not a serious buyer.

Yeah, yeah, it's like, you're not Apollo, you're not KKR, or whatever, right? I'm like, guys, like, just what do you care? Like, so it took me months of convincing and they still wouldn't let me in. So what do I do? I'm like, I'm sitting there, okay, I'm going to lob in a bid and force their hand to introduce me to the client. Because once you lob in a bid, they have a legal responsibility. It's like, I never want to be in that situation. So I'm looking to hire someone that is, you know, like comes from tier 1 private.

So who do you want? You want a private equity?

Private equity.

Do they need to know crypto?

I mean, they need to know about it, but it's more for our strategy. It's a private equity principal, pretty senior person that has done deals before but really knows fintech and telco.

Nice. All right. That's one hire. What's the other one?

Hire— the other one is engineer, like head of engineering.

Head of engineering, like a CTO type title.

Yeah. So there's like companies that I admire, like our North Star is making crypto invisible.

Yeah.

So I want to hire someone that has built that.

So you need a very good crypto native engineer now.

Well, two engineers really. One that handles all chain related stuff, like knows the architecture in and out. Liveness, you know, security validators, all that stuff. The other one is more of a product person.

So there's two.

I guess I would split it in engineering, like all chain-related stuff. And I have really good candidates there that know the architecture, know everything chain-related stuff. The other one's a product person.

All right, let's go.

So 3 hires. I'm not— I don't know, like how quickly Blockworks were in the early days. I think you're like—

we were still like 8 people by year 4 or 5, I think. I mean, we basically— our growth is like I mean, we just kept it really tight. I think maybe— I think we were probably 12 people actually by— 1, 2, 3, 4, 5, probably year 5. Yeah, we were 12 people and then we went to like 40, then 60, then now, now we have 85, I think.

Is that more a function of like there's just more stuff to cover in crypto?

Yeah.

And plus you launch a data, the research piece.

Yeah. Yeah. It's just more, more, more stuff to cover. But also we— I mean, it took us a long time to really figure out what we were doing with the business. And until you get extreme— like now we have what I would call extreme product market fit where the, the way, the best way to define it is like the market is pulling demand out of the business. Like we can't keep up with the demand. And yeah, and that's, that's what product market fit feels like. We always thought we had product market fit. We really didn't.

I just saw the update. I mean, you guys killed it in DAS.

The investor update. Yeah. Yeah. I mean, it's like biggest quarter in history by far.

Like, you know, by the way, usually it was very correlated to crypto prices, but like Yeah, prices have gone down. Last quarter was like pretty brutal and you guys still delivered on that, which is again, I think we're in that— if that recap we did right after DAS, which is there's more interest outside of crypto.

Yeah.

Than it is internally. And that bodes well for—

Yeah, we just signed our biggest data deal in history with a non-crypto native company. Like, we feel good. So, yeah. Awesome. Well, congrats, man.

Thank you. Yeah, I'm excited. Our office is going to be in New York, so I'll be coming in in this room more and more often.

This episode is brought to you by SKALE, the next evolution in Layer 1 blockchains. With a gas-free, invisible user experience, instant finality, and robust security, SKALE allows for limitless scalability and has already saved its 50 million users over $11 billion in gas fees. SKALE's high throughput, zero transaction costs, and powerful Web3 infrastructure make it the ideal platform for gaming, AI, and other high-throughput apps. To explore the gas-free ecosystem, visit scale.space/ecosystem and follow their journey on X @skale_network. That's Skale spelled with a K. Thanks to Skale for making today's episode possible. I wanted to take a moment to tell you about today's sponsor, ZenRock, the permissionless decentralized custody network backed by 1Roundtable partners, 10T, Maven 11, and Spartan. Now available on Jupyter, ROCK is the native token for transactions within the ZenRock ecosystem and secures ZenRock's decentralized custody network. The first application launching on ZenRock is ZenBTC, yield-bearing Bitcoin on Solana. ZenBTC will be live in April 2025. To find out more, you can follow ZenRock on X or click the link in the show notes. All right, let's talk markets.

So, I mean, Liberation Day. So recording this on the 10th, this will go out on the 11th, the afternoon on the 10th. And the reason I say that is just one of those weeks where markets are changing so quickly. One week ago we had, you know, Liberation Day or whatever the hell we're calling it. I guess we are calling it that now.

Yeah.

And I mean, the markets just puked, right? Absolutely. Equities went down 20%.

VIX shot up to like 40-plus.

Yeah, VIX went crazy. Interestingly, Bitcoin only went down, I think, several percent. I think maybe 10%.

Delay though, in the first day of Liberation Day, it held up very well and everyone came out of sync and I was like, guys, just, just don't wait for it.

You're calling it.

I felt that they were calling it too early. I'm like, give it another day.

But I did perform very well, which was interesting.

Yeah, it has so far.

So far. Yeah. And then, I mean, longer tail of crypto assets got, got clobbered. SOL fell below 103.

Oh, below 100. Yeah, yeah, that's right.

Um, I get—

I, I had alerts. I have these alerts of like when I want to like buy stuff, and it was like I got the alert of below 100.

ETH went below 1,500.

Yeah, I mean, it's the lowest level and it's been since 2017.

Yeah, I saw— I think it was Alex from Nansen was like, oh yeah, I got into— when I got into crypto, ETH is at the same price that it was when I started building.

Yeah, Simon from Moonrock was like Why should he— like, ETH is at the same price it was 2017. In 2017, we didn't have all the stuff that we have, which we should talk about, like the price of ETH.

And let's punt on that for a second. So what I want to hear is, um, what did you do in those days? Did you sit— like, when the market pukes like that, are you in? Okay, look, because there's one mentality that says, look, buy any dip. Something falls 10%, just start buying dips. If it falls another 10%, start buying more dips. There's another mentality that's like, we're in the fog of war, right? Don't take action in the fog of war. Let things calm. You might not, you might not catch the absolute bottom, but like, this is the fog of war and don't take any actions. Tell me like what you actually did and what did you get right and what did you get wrong?

Oh, well, I've been here running around meeting, so I don't, I don't have that much time, which is, I think, a blessing. I think sometimes you do dangerous stuff when you're sitting in the chair and like in your desk. But I sold some SOL that I had unlocked.

I sold right when the market started puking or you sold at the last week.

So it was like SOL was like $113 or so, $114.

You were selling because you just got the SOL unlocked or you were just like, I want to, I want to get out of things on the riskier side.

It's like less than 5% of my position or less than 10% of the position. It was actually 4%. So it was like a small amount. Never hurts to have cash. Yeah, I wanted to have a little bit more cash balance, more because it's like a— it's a very personal question. When people say what should be the optimal allocation, it's just I want to be in a position where— said differently, if there's a couple of versions here, if my calculus was okay, if SOL rips again to $1,000, it's not going to hurt as much. I sold 5%. If there's a version where SOL goes down to $70 or $80, like anything is possible in this space. So I just want to be optimizing for inverting and saying I want to be psychologically in a position where if I sell now and it goes to $70, I'll be extremely excited to buy back. If I don't sell anything right now, the FTX price was like $66 or so. $60. Yeah. So it's like it's going to hurt and I'm not going to be as inclined to put on the position again. I just know myself. Yeah. And I just wanted to increase the cash balance a bit. I rotated that into buying BAL. I just think it's going to continue to be really choppy. And so my calculus was like, all right, what, what can I— within a year's time, who knows what the price of SOL is going to be. There's a lot of things that dictate into that. But I do think that's going to continue to be really volatile. The trade war is by no way, shape or form over. Markets are going, are going kind of berserk on the, on the on the sort of the daily of what happens on the hour. So I want to— when vol is like this, I want to buy structured products, like the coupon that I'm able to get. So like I bought with that position that I sold, so I went and bought, uh, what it's called. I've talked about this extensively here, like the— it's called Phoenix. So it's a reverse auto call convert. What did I do? I do SPX, like so S&P long the market with an 80% barrier, meaning I have 20% cushion. And, and so as long as I won't— I won't— I will get called if at the strike level, if the market goes up, I get called after a quarter or so. So I clip some coupon. If the market continues to go down, it can go down until, you know, that, that buffer of 20%. So that vol, I think I get comfortable with.

Yeah.

Um, and as long as that's the case, I get paid a really good coupon. It's, uh, 17%. That's pretty good. Yeah, I want to go long the market. I don't want to buy it right now. I don't want to like scale it into buying the market because I still think it's going to be volatile. But this is a good way for me to express a view. Worst case, the market goes down after a year where this gets like at the end of the, the period. The worst case is at the end of the year, the market is below 20% from where it is now. So for that, I talked to like JP Morgan, a couple of players. I'm like, what's your revised target for the market? Are we going to— there is a version where the market continues to puke and goes down more than 20%. Absolutely. Probabilistically, I think it's less of an outcome, but I'm happy to buy it at that level. I'm not happy to buy now, go long. I want to earn cash flow.

Mm-hmm. Okay.

And that coupon, by the way, before the vol spike was like 7%.

Yeah, 8%.

It literally doubled overnight.

So you're not buying, you know, Bitcoin hits— I think Bitcoin hit $75, maybe $76. You're not buying You're not, you're not just like just a spot buy of something like a Bitcoin or, you know, let's say you believe in Coinbase stock. Like, you're not just like spot.

No, I— when vol is like this, I want to go long vol. And I think when, when structured products for me have been a way to capture a lot of income with size.

Nice.

I don't need more crypto long exposure. I am levered to the tits in terms of my career, my portfolio, my family office, my venture investments. Like, you know, like at some point you have to diversify. And for me, it's been a good exercise over the last couple of years where I'm unbothered. You know that meme? Unbothered, moisturized, unfazed.

Yeah, yeah, yeah.

You know, somebody said Berkshire Hathaway, we talked about it here. That's like $300 billion. All the memes that were on crypto Twitter and just, you know, Wall Street Twitter, like the guy sitting on $300 billion of cash. Yeah, it feels great to have cash when markets are doing their thing. Yeah, right now it does.

It also, though, feels good to— it feels good to have cash. It also just feels good to have the mindset of someone who's been in crypto for a while. I mean, I don't know if you feel this way, but when markets go like— I actually tweeted this, I said several years in crypto really warps your mind. Markets were— I mean, it was Wednesday or Thursday and markets were just tanking, right? Worst week since COVID biggest two-day wipeout in the history of the equities market. All my normie friends who work in private equity and hedge funds got a group, group text. They're, they're panicking, right? All out panicking. My— I don't— again, I actually don't know if this is a healthy thing or not a healthy thing. I register zero ounces of panic.

Yeah.

And I think it's because, you know, there have probably been 3 or 4 or 5 days in the last couple of years where your net worth, if you work in crypto, has been cut in half in a 24-hour period.

Oh yeah.

And that's not a normal phenomenon. But it's very normal for crypto people who have seen many cycles. So when something like this happens, my mindset is literally, oh look, prices are down bad. Eventually they'll go back up. Just keep holding and just don't sell.

And the key is survival. And the key is positioning yourself to no matter what happens, optimizing for the peace of mind, like sleeping well at night.

Yeah.

Again, if you're levered, you need to constantly be monitoring prices. You can get liquidated and the fear of being liquidated, being margin called. Is not nice.

Yeah.

Again, like you just sort of assume that like in this asset class at any given moment in time, the price can go down in half or more.

Yeah.

And so you invert and you say, how do I make sure that I'm super long this space over a 5, 10 year period? I never want to be in a position where I can compromise my ability to be in the game because if you get liquidated, you're going to want to leave this space and you're not going to have any capital left. Yeah. So, so again, I think— but yeah, I mean, it was just, just to recap the magnitude of what happened in markets. Like there was a good tweet by Intern Jason Yanowitz, who I think then got quoted on a Bloomberg piece. Yeah. Which is just like, all you guys in trad fi have like the—

he said, I like how all we— I like how we all thought crypto was going to grow up, but the rest of finance just came down to meet us. You had to see, I think, is the CNBC thing. Yeah. About the— there's a— before Trump actually announced the 90-day pause, there was a—

right, the fake news.

There was a fake news that we were pausing the markets. Markets shot up 10%. Yeah, it was like back down 10%.

It was like a $2.5 trillion—

everyone, everyone had crypto is like, oh, this is the Cointelegraph intern tweet. We've seen—

totally.

Yeah.

And then, I mean, let's do a recap of what happened yesterday. I think when the actual pause happened, apparently Trump tweeted like, now's a good time to buy. Yeah. And then this happened.

He tweeted in the morning like, now is a good time to buy on Truth Social. And then he tweeted— I mean, and then they announced the— what did they do? So they did a 90-day pause on all tariffs. Right. And then— but now, except China, which they're increasing the tariffs on China.

So 124% or something now, 105%.

Yeah, something like that.

Yeah.

So, yeah, I mean, I feel like— I mean, in the end, my take on this, again, I'm like the worst person to listen to when it comes to macro. I don't know what I'm talking about.

Ladies and gentlemen, we are not macro experts.

I mean, people should listen to this episode that comes out on Monday with Quinn and Felix because they actually nailed this and they are the experts. But to me, it feels like almost all these tariff negotiations and rhetoric about this is just to get China to do a deal. It doesn't feel like a big— feels like China is the big kahuna here that we're, that we're going after. And everything else is kind of just like negotiation, posturing. And yeah, that's what it feels like.

This episode is brought to you by SKALE, the next evolution in Layer 1 blockchains with a gas-free, invisible user experience, instant finality, and robust security. SKALE allows for limitless scalability and has already saved its 50 million users over $11 billion in gas fees. SKALE's high throughput, zero transaction costs, and powerful Web3 infrastructure make it the ideal platform for gaming, AI, and other high-throughput apps. To explore the gas-free ecosystem, visit scale.space/ecosystem and follow their journey on X at Skale Network. That's Skale spelled with a K. Thanks to Skale for making today's episode possible. I wanted to take a moment to tell you about today's sponsor, ZenRock, the permissionless decentralized custody network backed by 1Roundtable partners, 10T, Maven11, and Spartan. Now available on Jupyter, ROCK is the native token for transactions within the ZenRock ecosystem and secures ZenRock's decentralized custody network. The first application launching on ZenRock is ZenBTC yield-bearing Bitcoin on Solana. ZenBTC will be live in April 2025. To find out more, you can follow ZenRock on X or click the link in the show notes.

I heard there are some crypto funds that actually got completely smoked because there's, you know, there's this big trend of like liquid crypto funds now. It's not just the venture firms, but some liquid crypto funds I heard got really smoked.

Yeah.

Let me get your take on this. Mike tweeted out, he said, I believe the 4-year cycle is broken. There won't be bull or bear markets as we've previously understood them. Best guess is periods of up only 9 to 12 months, followed by periods of chop, solidation, 3 to 6 months. Massively healthy development.

What goes into the thinking there?

I think, I think the thinking is that like the— if you were going off the 4-year cycle, this is the second half of the end of the bull market, right? If 20— it's like 2017 is the peak or top, 2021 is the peak or top, 2025 is the peak or top, right? All the 4-year cyclers would have said 2025 is the— is the— is the big end boom of the bull market.

Look, money supply, M2, is like the most important thing.

Yeah, yeah.

The price of Bitcoin, higher asset class. Is a risk asset.

Yeah.

So I come at it from like, that's one point. So of course it all computes into what's happening with rates and QE or QT. So that's like one simplistic take. It's like whatever, whatever M2 is doing, risk assets are going to, you know, follow. I come at it more from what is inherently like specific about crypto that may or may not factor. I think it factors in a big way. Which is a couple of things. One, everything is so tightly correlated with Bitcoin. Yeah, that— my thesis there is that core tightly— tight correlation decouples because one's a commodity, the rest is not a commodity. Like, but the market doesn't— I don't— I'm not here going on the record saying that that correlation is going to break. I do think over 10 years, the correlation of an asset like Bitcoin is very different than Solana, Ethereum, Sui Sei, Hype, all the different assets, they have cash flow. One does not. It's a commodity, right?

Yeah.

So that should decouple as the space has more institutional capital, as we develop valuation frameworks of cash flow. There's like a whole resurgence in bear markets of like fundamentals and all this stuff. But like, you know, that should over time decouple as the asset class continues to grow, as more flows come in.

Yeah.

And you started to see that in some way. Like, I always think in a perfect world, you understand if $100 million or $100 billion $1 trillion is going to come into the space over the next 5 years. Are they going to buy Bitcoin first? Because that's historically what has been done. And how are they going to express that view? Well, now you have ETFs. So that also computes into how is this going to manifest itself, right? Because there's different ways to express a long crypto thesis. You can now buy Robinhood stock, Coinbase stock, Circle stock, Bitcoin, ETFs.

So native, let me tell you. So we talked about what you did, what I did. I did the, you know, the very retail thing. I just didn't do the COVID call Phoenix. No, whatever, you know, we're talking about. You need to advise your your poor friend over here and I mean, I literally just started buying. I bought Robinhood stock. I bought like Thursday, reached, you know, reached out, basically said Robinhood stock. I mean, I'm understanding as I speak this out loud how retail I sound about Robinhood stock. Nvidia. Yes. Coinbase stock. And then the market went— so that was Thursday. Then the market went down even more.

You bought some more.

Bought some more. And then I also bought cash. Then I also bought— I started buying. This is when I got a little spooked because you can see it. But I bought the S&P, right? And I bought Bitcoin, right? And then the weekend came around and I just started buying more Bitcoin.

Yeah, over the weekend.

I think it was Sunday into Monday. Started buying more Bitcoin.

Bitcoin was like sub $80, $76.

I think it was $77, $78, $79, something like that. So give me advice as well.

Well, I want to understand. So say you had $100 to deploy.

Yeah.

How do you express that?

You have no time. Yeah.

But like, how did you think about— because a lot of the conversations I've had with people is like Jordy, for instance, Game Theorize, you know, he was— he came out saying early on, like, I'm going to pile into Bitcoin. Like, this is the time. Yeah, it's holding up really well. And then he was like, oh, I'm going on the record. Like, I may have scaled too fast. Like, yeah. Then it was like 50/50.

It roughly came out to 25% the S&P, 25%, 25% Bitcoin. Yeah, 50% all the rest spread between Coinbase stock, Robinhood stock, and Nvidia.

In what time, in what sequence? Like, how did you think about— I have $100 because a lot of people might be sitting today and listening.

I started with the equities because to me I'm like— and this is the reason I'm bringing this up at this point in the conversation is because you were mentioning there's all these other ways to get exposure.

Yes.

To things now, like the old me would have been buying Bitcoin, you know. No, but not just Bitcoin. Bitcoin, ETH, SOL, you know, SUI, Aptos, Hyperliquid.

Right.

I would have been looking at different like tokens to be buying. I did not even cross my mind to start looking at entries into tokens. Yeah, it did not.

And I am like, I am about as exposed to crypto as you can get. No, by the way, this is interesting observation because a lot of people that I've talked to about this also, that's very similar. Not retail, like funds. They're like, the real— the question constantly is, is, am I— how many units of risk am I putting on the table to get this type of return? And, um, I guess the argument could be made that you're going to get a really good, interesting return profile by buying Robinhood, if they tokenize stocks, if they continue to become more efficient and the market's going to really reward them. By the way, they have limited downside relative to some other token that has an unlock coming every 6 months or so. And I guess you're not like— once you do that calculation of the Nebulas risk-adjusted return, I think a lot of people come to the conclusion in this environment, hey, I don't feel like I'm getting paid enough to take that long alt exposure because I can get a really good return on Bitcoin. I can get a really good return with Robinhood or Coinbase.

You know what it is, is because I was really reflecting on this over the weekend. I was like, why did I just buy Robinhood and Coinbase and Nvidia instead of, you know, and for me it comes down to the, the, the alts game has gotten a lot harder. Yeah. And to me I'm looking for, you know, I'm not going to go buy like an index product actually, like a top 10 or top 20. Because so many of those products— but basically what I'm looking for is general exposure, long exposure to crypto.

Yeah.

And the products that exist on the market today are like, you know, the Bitwise 10 and things like that. I don't actually like those products because they include all these coins that I don't actually like. Like, you know, yeah, Cardano, yeah, DOTS of the world are still in there. Yeah. And so I'm looking for general crypto exposure. And to me, things like Coinbase and Robinhood are the best general exposure plays. And actually, there's a Ryan Watkins tweet that I thought nailed it, and he said, the altcoins are cooked narrative is so lazy. It doesn't take a genius to figure out that 99% of them will fail given there's no barriers to creation. They all carry venture risk. The 2017 to 2022 era was a moment in time given speculative demand for alts vastly outpaced the supply of them. This is no longer the case with an abundance of VC DEXs and token creation platforms. The point is that altcoins aren't cooked. The point is that it now takes skill to filter signal from noise.

Yeah.

And I think if I'm being really honest with myself, this is why I bought something like Hood and Coin is because I know I used, I used to have edge in crypto. I used to have real, like, I used to think about what I feel like. I at least I feel like I had edge or I felt like I had a really good take on which liquid tokens are going to go up. There are now so many people like Ryan Watkins spends all day, every day looking, you know, the, the, the Theia guys spend all day, every day looking at the liquid markets. I'm not doing that anymore.

By the way, I have some thoughts on there. But to your point, I think about this in the context of AI too, meaning I don't have any edge. So what do I do?

Do you?

Well, and I ask this a lot of— I've talked to a lot of venture funds that are now focusing on AI. I'm like, do I really think that this manager is going to outperform the S&P?

Yeah.

I'm like, all these venture dollars are going to fund startups that are buying CapEx from NVIDIA, right? And by the way, there's all these public companies that have the data, like Microsoft, that are going to reap the benefits, right? So why am I sitting here trying to either directly or indirectly through a manager do this art of picking with a lot of venture risk, power law distribution, with— by the way, AI is just one of those places where you— the displacement factor is really high. Like, you have Deepsea come along and say, oh, with $5 million we can upend— you know what I mean? Yeah, yeah. Like, I just feel like Peter Thiel has actually a really sober take on AI, which is like 99% of all the startups is going to fail. You could argue that the S&P is going to outperform 9 out of 10 of VCs that are investing in AI. I mean, I mean, and so it's like, why? And you've said it time and time again, which is you have your business, you're building this company. This is where historically people build real wealth of like building a business founder mode. You know, Warren Buffetts of the world, Marc Andreessen of the world, people that have built companies, people that are sophisticated investors say Warren Buffett made that famous bet with all the hedge fund managers, right? Yeah. Like half a million dollar bet. And he said, The S&P, you're not going to beat the S&P. Most funds don't beat the market.

They didn't. And Buffett won that.

And Buffett won that. So this is a sign of—

this is a sign of crypto as an industry maturing, though.

I agree.

It is.

That's a good point.

Yeah. Because the people who are the stock pickers, the token pickers, they're professionals now. Yeah.

You know, give or take.

But yeah, they are becoming professionals. We've got people like Dave Kolk coming into the market. Yes.

Yeah. You know, Although the counterargument to all of this is you still have the top 10 is mostly projects that have launched and had an early mover advantage on the attention game. Ripple, Cardano.

What is the top 10 right now?

It's— so let's go through that. Bitcoin early, ETH early.

So Tether, Skip, Ripple.

Well, Tether, you could argue early in the stablecoin game and had the massive benefit of Tron deploying it. Okay, so still early. Ripple, early.

BNB, early.

And distribution of Binance.

USDC, early. Solana, Dogecoin.

Dogecoin, one of the first meme— you know, not one of them, but early. Solana, one of the first 0-to-1, like, high-throughput blockchains. What else?

Doge, Tron, Cardano.

That's Tron and Cardano. All of them, all of them are prior cycle coins that have won the attention of a base that it's only even the top 20.

Then you push beyond that. Let's go to STEETH, wrapped Bitcoin, so ignore that. LEO. LEO is 13.

Bitfinex.

Bitfinex. Yeah, exactly. USDS stable. Chainlink early.

Yeah.

AVAX. TON. TON coin is probably the only one that's not. Early.

Yeah. And AVAX is youngest.

Yeah, yeah, yeah. Hedera.

This isn't circulating, right? Or fully diluted. But nonetheless, I think the math still— yeah, the premise holds.

Hedera.

A lot of these guys are mostly—

yeah, Hedera was early.

Hedera, Stellar, Shiba Inu. Yeah. There you go.

Hype is probably the— so again, we covered this in the pod of the new things.

So if you push in, the biggest one that's probably new is SUI.

So we said, yeah, SUI, Aptos, maybe HYPE, Hyperliquids 30. The— we've talked about this in the pod, just as a— I'll bring it up again. I don't know if you have any more reaction to it, but as a fund, it's become harder. This cycle has been quite different in that if you didn't have exposure to Bitcoin, Solana, HYPE, and one or two other assets, you underperformed the market. You underperformed the benchmark, which is Bitcoin. That wasn't necessarily true in prior markets where, to your point, you could have just gone long, a spray and pray approach. Yeah, that's to your point, another indication the industry is maturing. Like, the stock picking game is very much like you either did that well or you didn't. And so if you're going to go out and raise from investors, whether you're primarily liquid fund or a venture fund, if you weren't in very specific names, it's not— the game has become much harder. And will only continue to be much harder for a couple of reasons. One, there's just more funds like investors. There's like liquid funds and venture funds. The amount of capital in privates is like— continues to grow. So you get squeezed out around. That's more competitive. So the alpha there degrades when there's more capital chasing deals like multibillion-dollar funds, right? Then you have liquid funds, which I would argue that that's where the most amount of opportunity exists, continues to exist. There's less capital in this market environment. You can pick up stuff that, you know, the valuations are like below the prior round. You could argue, hey, maybe Ethereum trading at where it was in 2017— I actually don't think personally I would buy it. I think that is cooked. Um, and but, you know, you could— you, you, you have the opportunity liquid side, like, like the Davids of the world, like, come in and are very sophisticated.

Yeah.

Uh, there's still more opportunity there, but The other point is all that capital may just go to express views in different ways through the ETF or just Coinbase, Robinhood, more companies that are— as more companies continue to adopt crypto. Yeah, why not express a view that way?

Interesting thing that happened this week was I just saw this. So Athena, I'm looking at the US, let's see, SEC filings digest. TLGY Acquisition Corp signed a non-binding letter of intent with the Athena Foundation to explore a potential partnership involving the acquisition of a validator business and the purchase of up to $100 million in ENA tokens, ENA, which is the Athena token, at a discount. There's actually all these— I'm sure you get the same pitches. There's dozens of these companies. If you saw the Kraken guys, Marco Santori and the Solana—

so MicroStrategy.

Yeah. So there's actually all these businesses. So there's obviously the ETFs. There is like a precursor to the ETFs getting created for like, yeah, actually probably that top 20 that we just listed. I'm sure you get the same pitches that I do of like, yeah, we're just creating a MicroStrategy for insert your top 10 token.

Yeah.

So there's, there's all these happening. Yeah. How does—

so I guess just to round out the discussion on both macro and allocation, I mean, there might be a lot of listeners that still have have been sidelined or have capital to allocate. We're going to talk about it tomorrow on the pod. I am curious, if you had $100 coming in, say you had a— lucky enough to have decent cash balance before the Liberation Day, you know, volatility and drawdown, how are you— if you were to do it, like, if you have capital right now, cash, meaning—

yeah, yeah.

What do you do?

What you want to do when the prices go down, like, the math would say prices go down 10%, buy the things that you really, really, really strongly believe and just hold them for years. Prices go down another 10%, just keep buying if you have the cash, obviously, and just, just hold them and close your eyes and don't try to trade around these types of events. Just hold them for years. And that's, that's what I did. So like, if you have cash right now, pick 3 to 5 things that you strongly believe in. And I mean, I think I— for me, I'm buying these kinds of environments when the fear— I saw the fear and greed index hit 3. Which I've never seen it that low. And it wasn't even that low during March of 2020. So I'm just like, there's probably going to be more extreme volatility. But to me, I think that's a characteristic of a Trump presidency, not characteristic of April 2025.

Right.

I mean, this guy rips a tweet out and the market moves 10% and then he rips a tweet out and it moves the other way.

You best believe vol is going to continue to persist. In this administration.

This is a 4-year phenomenon, not a, not a, not a 1-week—

go long vol.

Yeah.

Don't use leverage for this reason because you will be liquidated.

Right.

And preserve cash.

Yeah.

And optionality. It never hurts to have cash. Yeah. I think that allows you to be operating in a position of strength always and peace of mind. So I think the, the best thing that I've done in my trajectory in crypto has been have a stream of cash flow that comes in that is not tied to the industry. You want to solve for that. I don't pretend to give any advice, but as I think about me becoming a better investor has been knowing that I have something that is not correlated in my portfolio that funds my lifestyle, that funds, that gives me the peace of mind to then maybe step up. Like I haven't drawn from that bucket. At all. It's there, it's earning.

These are your yield product yield products.

I'm not going to go along the market. I'm happy to clip a 16% coupon because I'm playing the law of the rule of 72. What's the rule of 72? Divide 72— divide the yield that you get on any product, whether it's you're investing in a fund that says I'm going to give you 10% return. So say you do that, you can buy something that per year gives you 10% return. Divide 72 by 10. In 7.2 years, you will double that. That's the law of 72. Simple math. So when someone quotes you an IRR yield thing, your yield farming, your investment—

by that, that's how long it's going to take you to 5%.

It's going to take you 14 and a half years to double your money. And I constantly think about that. If I can do that in size, if I'm there and in 6, 10 years' time I double my money, that's a good outcome. Yeah. And you don't always have to be super aggressive with everything that you do. I mean, I think the simple— Xiao had a good tweet about this, but like, you know, it pays to listen to what other investors are doing. Warren Buffett telegraphed what he was doing for years. He was selling into the market. He has a $300 billion war chest. Like, I've been listening a lot to—

let me just play devil's advocate to that, though, which is that Buffett's been selling for years, right? I think he started taking chips off the table in 2022.

Right.

If you had not bought into the market in 2022, you missed—

Yes.

20, 30, 40% upside.

Yes.

Jason Yanowitz.

And I've said this time and time again on the podcast, I am not in the business of capturing 100% of what the market cycle will deliver. I think that is the surest way to get at some point lose your shirt. All the market wizards in the book, they all went out of business. Greed at some point gets into you. I think there's something to be said about I'm comfortable going in and saying whatever the cycle is going to be, I will capture maybe 50% of all the return. I'm happy to sell in when others want to buy. Sure. Yeah, because I think some— at some point you may be in a position where there will be a generational entry point, a generational opportunity. Say that you were not allocated to crypto 2017. You kind of missed everything. Agonizing. Now you can buy asset, the exact same asset that you could have bought ETH at 2017.

Earlier in today's episode, I mentioned Ledger's latest products, the Stax and Flex, and I wanted to take a few seconds to tell you more about them. These wallets feature the world's first secure touchscreens, which don't just simplify your digital transactions, transactions, but also keep them extremely safe. These wallets are virtually impenetrable to online attacks because they store your private key in a secure offline chip. You can manage more than 5,500 tokens and install up to 100 apps. Choose the most trusted name in hardware wallets and take control of your digital security today at ledger.com, or hit the link in the description of today's episode to check out their latest wallets. This episode is brought to you by WalletConnect, the connectivity network shaping the future of on-chain UX. From DeFi to NFTs, swaps to staking, WalletConnect is the backbone of connectivity in the on-chain economy, seamlessly bridging wallets, apps, and blockchains. With over 220 million connections and 35 million users worldwide, WalletConnect is the place to power your Web3 experience. With the launch of the WalletConnect token, the network is taking the step, paving the way for a fully decentralized, permissionless, and community-owned future of connectivity. To learn more, follow WalletConnect on X and Telegram, or visit walletconnect.network to stay ahead of what's next. AO, the hyperparallel computer, is here. A decentralized supercomputer built on top of Arweave's permanent data storage. AO offers infinite parallel processing and leverages web infrastructure, HTTP, for unprecedented scalability, addressing limitations of existing blockchains. AO smart contracts support large programs including LLMs and can execute autonomously, enabling new classes of decentralized applications. Utilizing TEs for secure computations and features a 100% fair token distribution to Arweave holders and bridge depositors, emphasizing community ownership. Thanks to Arweave for making today's episode possible. You can find out more by clicking the link in the show notes.

So what— so what would you do? Let's say you had a listener. Let's say you had a listener who maybe had $10,000 of cash right now.

Yeah.

And it's— it's Friday. It's the real numbers. Friday, April 11th. What do you suggest they do? And— and importantly, they don't have access to JPMorgan to do it, right? Yeah.

No, no, absolutely.

Can't get 10% yield very easily. What do you do?

I would ask him, what, what, what do you intend to get out of this product, out of this pocket of money? Are you relying on that to pay for bills or can you not see this or touch this for the next 10 years? That's a simple question that any wealth manager is going to give you. Any robo-advisor is going to give you. Now, let's assume that it's discretionary. It's the same money that you can fund a vacation or go to Vegas.

All right.

Well, if that's the case, Honestly, S&P, all of it. Yeah, not bonds, all of it. S&P, go do whatever it is else you don't— go find another $10K by working. Yeah, why? Because again, the one of the things that, uh, I'll directionally quote, but like the composition of the S&P over the last 20, 30 years went from being entirely focused on industrial companies to tech companies. You don't have to know a single ounce of technology But if you allocate in the S&P the rebalancing mechanism, you would have captured that. Yeah, you've captured like a 12-13% return. Go back to the law of 72.

There you go.

7 years, you double your money. Compound that, then reinvest that, all the dividends. And so again, it's really hard to outperform the benchmark unless you think that you have some prodigy type of insight. It's really hard to continuously outperform, time the markets. And so I put in S&P. Yeah, I wouldn't necessarily go, you know, maybe clip secure. It's $10K. So like 5%, you know, 5% on some treasuries is meh. Just allocate it. The market's down a lot. You know, I think there are some really, really big transformations that are going to happen. I think the S&P is going to capture the impact of AI and crypto. And you might see some companies that use crypto and leverage cost gains for that. Maybe once we will buy and take public over the next 10 years. Will make part of the index and you're going to benefit from that. Yeah.

Like, like, like follow me into the Robinhood, Coinbase, Nvidia, S&P, Bitcoin retail.

There's— in moments like these, it pays to have, you know, a cool head. Yeah. I just listened to a Founders podcast. You know how much I like Founders podcast. We should have—

you know, you know what? You know what episode I just— oh, this wasn't Founders. This was Invest Like the Best. Also, it's episode.

Oh, great. Michael Ovitz. Well, there's a Founders podcast. Yeah, it's phenomenal. Great. Um, there's, uh, he has 3 or 4, maybe he has a ton on Warren Buffett and Charlie Munger. There's one we link in the show notes. Promise that we'll link in the show notes. A listener said every time you say link the show notes, it doesn't work.

For years we've been saying link in the show notes, never once. Thank you for whoever this is. Thank you for calling us out. Once have we linked in the show notes. It turns out we—

I'm gonna send this this to our producer, well, shout out, well, he does fantastic work. Um, there's one of the collection of essays of Warren Buffett and David Cerna from Founders. It's like a 2-hour-long episode. Honestly, a gold mine. Uh, an MBA of just an education, of course. And, and there's a lot of good insights there that, um, I, I like to listen time and time again. Yeah, it's good to listen to that. Yeah.

Um, let's talk about The— well, actually, quick, quick one on this, and then I'll talk about the Ripple acquisition.

Can we talk about what's practical for the traders out there? There's really smart minds that I talk to about like Arthur Hayes tweeted about this. Actually, the MOVE index is something that is interesting. Like a lot of the people that I talked to this week about like how to— when to step into the market, when to go long. A lot of them follow this index, the MOVE index. Yeah, maybe we'll you know, we can show it. But it's like, if it goes above 140— shout out to XCAI, uh, XCAI. And yeah, they all seem to converge on this idea. And I don't pretend to know—

MOVE Index is short-term vol, right?

Uh, I think so.

Yeah.

Anyways, this index has always been like, if it hits above 140, it's like everyone in there— someone is being carried away. There's like a blow-up. Yeah, body bags. Like, like there's— and it's only hit that level in like crazy, like COVID that day, it hit. Now it's still in that range. So it just, it's a interest for our trader friends out there, which I appreciate you guys. I'm not, but you know, this is something that smart people that I follow that are really good traders.

I'll talk to Quinn and Felix about that.

Yeah, we'll talk more about that.

Yeah. As a venture, as an ex-venture investor, I should say, and an LP in a bunch of these funds, how much do you think this impacts the venture?

I think as an ex-venture investor.

You were an ex-venture investor.

And what about it? Am I lost?

Well, you know, like at ParaFi, you're a professional venture investor.

I'm an institutional angel.

I don't consider that as a venture investor.

I guess I'm in founder mode now, ladies and gentlemen.

So, you know, okay.

But anyways, you should consider yourself a founder, not a founder. It's more fun. I do know about this.

It's way more fun. Way more fun. Okay. What, what will this— if you're in the seat of some, like, imagine yourself terrified during these days. Are you like full steam ahead allocating? Are you pausing? Fog of war, not sure what to do. Are you going back to founders and saying, look, maybe the leverage just flipped into my hands? It used to be in your hands as the founder. Now leverage flipped in my hands. I'm going to get a little bit better of a deal. Like, what do you do in this phase?

Depends on the structure of the fund and the tenor of my capital.

So structure of the fund would be all of the big venture funds— Electric, Pantera.

You have a 10-year fund. You're— or if you're liquid, you have the duration of that like you're not— that capital's locked up, right?

Let's just assume there's venture funds. Yeah.

Well, a couple things. Yeah, I'm bullish. Of course I'm bullish.

So do you think that the venture allocations will slow?

No, no, no, no, no, no at all. There's a lot of capital out there. If you're building good product, it is very opinionated now to stablecoin. I've seen hundreds of pitches on Stablecoins. In or around stablecoins? No, absolutely not. I mean, let's put aside this whole noise, which I describe as noise.

Yeah.

I'm not a policy expert. I'm not a macro expert. It is noise in my mind. You take— it doesn't take more than taking more than a year, a 12-month horizon to be— as someone, as my first hire says, I'm so bullish I can't see straight. Why? All the reasons. And I just came out from meeting one of the best investors, full stop, not just in crypto. They've done the best investments in crypto, the best investments like in venture outside of crypto. They're based out here. And we were both of the agreement, all of the hurdles of this industry have gone away. The question now becomes, who are we going to blame if we don't export this technology? Yeah, but they're like, why wouldn't you be bullish? Regulatory stuff clearing up. We're going to have stablecoin regulation. Hopefully clarity comes soon. That opens up— God, PayPal, Stripe, all these fintechs, you know, you have— what else? I mean, all the major SEC stuff has been dropped. You have a very pro-crypto administration. I mean, and mind you, we've been building infra that can now support these use cases. Why wouldn't you be bullish?

Yeah, I agree.

If you've managed to survive and you're here and you have some, some capital and some capital. Yeah, I would be— if I were Ben of ParaFi, I would be calling up my LPs and be like, this is the time to like, this is the time to give me— call the capital, call the capital, give me more capital.

Yeah. Yeah. What's that conversation actually like?

Well, it's tricky. Definitely tough because a lot of the LPs might be licking their wounds.

Yeah.

You know, they're like, oh man, like being battered down in my traditional portfolio. I don't— my allocation of alts just got slashed. I can't get buy-in from—

yeah.

And it's, it's always— again, this is why I come at it from— when I left ParaFi, I said, I just think, look, there's a reason why folks like Druckenmiller and Soros and all these people have transitioned to a family office style. Or a holdco structure, permanent capital like Berkshire Hathaway.

Why?

Because most funds are in a position where you have to allocate the capital in 4 years and you have to deploy that forcibly. Warren Buffett, on the other hand, says, I'm gonna do whatever the hell you're paying me to protect your capital first and foremost, and then allocate that in the best risk-adjusted way as I see fit. You either believe that I can do that or you don't. And if you don't, sell the stock. And I think that again, when you talk about the 4-year cycle and the timing is very important in this game, and unfortunately many funds find themselves in a position where the moments where you want to be investing are the moments where you can't find the capital.

Yeah.

And you don't have the capital. So it requires a different structure to express the view in a very volatile and emerging asset class. And I thought about raising a private equity fund. I said, okay, well, But why? Why would I want to play the IR game on an industry that I think over the next 10, 20 years is going to produce immense amount of value? How many, how many public companies do you think are going to be purely crypto native? 20, 30, 40, 50, right? I want to invest in all of them. I want to own all of them. Why would I have a fund structure that I need to forcibly sell after a certain amount of period, either because my LPs want their money back because they're playing the IR game, the law of 72?

Yep.

Or because I just need to allocate forcibly. Yeah, we should. And any question, every time we bring on a manager here, whether it's liquid or venture, we should ask them, how comfortable are you? How comfortable are you holding cash and sending an investor letter saying, I'm holding 50% of my cash? You know who's done that really well? Jason Yanowitz. Yeah, it's crazy. I'll give immense amount of respect I— he raised this fund when, um, Solana Breakpoint Conference, the peak of the euphoria.

Yeah, I think.

And he just raised like— he raised, I think, $50, $75 million. Yeah. And you could see his— he's like, he was struggling a bit. He's like, I don't feel like I should allocate. I don't want to allocate. I'm not going to allocate. And I was like, hey man, well, you know, you get paid to do some of that money. He's like, yeah, but I'm going to protect principal. 3 months later, market crashes, gets allocated.

Yeah.

And, you know, it's— we don't talk about that enough because it's really, really hard to not do anything. And that's equally valuable as doing something. Like, we always have that itch, especially managing outside capital. So the short of it is, if you're electric, if you're Han, if you're A16z, one, I don't— I don't see the pace of deployment slowing down anytime soon. Not on the private side. We just had dinner with this guy, the really good company, and, you know, Yeah, you could tell smart people continue to come in the space.

Yeah, 100%.

A lot of activity around certain ecosystems, around certain use cases.

Yeah. I lost the other thing I want to cover outside of the markets and venture stuff is M&A.

Yeah.

So I mean, it is just hot. It basically feels like you had this— it's, you know, like a dam. I'm picturing like the Hoover Dam or something and there's just all this water getting backed up for years and then like dam just opens and the floodgates. I think what you're seeing is you know, the— there's no M&A for several years, just dead, no M&A. And now you're seeing several years of M&A compressed into a 1-year time.

Yeah. Why do you think that is?

Just regulations opened up. Yeah, I just think it's regulations opened up and now the, the industry is mature enough where people are saying, I'm going for the jugular, I'm trying to take the crown right now.

Part of my pitch is so there's these foundations that have a lot of money.

Yeah, right.

Ethereum Foundation, ConsenSys kind of tried to do this, but it was too early. And I asked them, hey, what did AOL do in the peak of the dot-com bubble?

But yeah, Time Warner, they swallowed Time Warner, biggest acquisition of the time.

And they like used their currency, which was totally inflated. They knew that. I mean, straight face, run any valuation methodology around there, and they bought a real business.

Yeah.

What was the largest acquisition that just happened today ever in crypto? Crypto?

Well, there's the Ripple NinjaTrader one. Excuse me. Excuse me. Kraken NinjaTrader one was $1.5 billion. Ripple just bought Hidden Road for $1.25 billion.

Yeah. So the second largest. But let's unpack that.

Yeah.

Especially the Ripple one.

Yeah. Ripple. This one's interesting. So for people who don't know, Hidden Road is— was started by in 2018 by this guy Mark Ash. He was an exec at What is— who's the guy that SAC Capital, Point72, exec from Point72, set up the shop in, in like global shop, Netherlands, UK. I think they're actually structured headquartered in the BVI. Shout out Nick Carter. They— I think they backed them. They led the first round in 2018. Basically, they are an institutional prime brokerage firm, right? So basically, so they do clearing, financing, they clear more than $3 trillion annually across markets. Started not just crypto, not just crypto. So they actually started as an FX firm and then expanded into crypto. 300 institutional clients, everyone from like Wintermute to Virtue trades on them. And they're a massive, massive, massive clearinghouse. They don't do any prop trading in-house. Very like they promote like conflict-free, very tech-forward. I actually met with one of the founders the other day, a phenomenal, phenomenal firm. And yeah, so they clear like FX, equities, commodities, digital assets, crypto, fixed income, cross-margining capabilities across all of those. Massive firm. They just got bought by Ripple, just bought them for $1.25 billion.

So what's going inside of Brad's brain when he decided to buy that?

Genius. Genius. Ripple willed a not the most intel— like, okay, what is the polite way to put this? What I think was a very retail-driven idea, which is using XRP as a clearance currency.

Right.

Obviously, that's never going to work. You can't have like a volatile asset as a clearing currency. But Ripple and Brad and David and that whole team willed this basically like silly idea, which was using XRP as a clearance currency, into reality by just, I mean, basically shilling this thing for years. Best token to go up using the capital and now building a massive war chest. And they are turning Ripple into a real business.

They will will it into existence.

This thing is a— I would say there's another—

I will give them the most amount of credit because this is what every foundation should be doing.

There's another— I would say the other person who did this strategy is Sergey at Chainlink. Yes. Sergey turned a meme coin, LINK, which was a meme coin into a war chest of capital, into a company that has hundreds of employees and does deals that are 8-figure deals with L1s and L2s.

You will— I know.

And there's a—

there's a— there's always a fake it till you make it kind of thing in every— and there's a fine line of how you walk that.

Yeah. Hidden Road is a legit, extremely legitimate business.

And I mean, this is the pitch for Inversion, quite literally, build a war chest of capital and then acquire real businesses.

And I think this is genius. I think Brad— I don't care what people say about Ripple anymore or not. Brad Garlinghouse is a phenomenal operator.

He's not just in crypto. He might go down as one of the best— like, best evangelists.

But just think about what we're saying. A year ago, I would have been like ragging on Ripple and ragging on— this tells me that they are serious. This is a—

they might go and become bigger than Ethereum.

Yeah. I mean, we did this episode that you weren't on with Charlie Noyes from Paradigm, right? And BAM, who just raised for Mesh. They just raised $82 million from Paradigm and Stablecoin Clearinghouse. And I said, what are you seeing that I'm not seeing? And he said, don't sleep on RLUSD. Don't sleep on Ripple Stablecoin.

And look, and we talked about that. What other company gets mocked? Protocol, large protocol gets mocked and doesn't get enough credit by OG crypto, you know, other than Ripple. There's one very obvious one.

Solana?

Tron.

Oh, yeah, yeah, yeah, yeah.

And I will give Tron credit where it's due.

Yeah.

They have been instrumental boots on the ground of evangelizing and deploying, so to speak, USDT.

Yeah.

Like what percentage of USDT happens on Tron? What is it?

60, 60, 70, roughly. I'm probably getting that wrong. 60, 70.

Yeah. And everyone, everyone in crypto laughed at Justin and Justin and whatever. Yeah, but, but, you know, again, that, that just tells you the reason why USDT has been so dominant in the stablecoin market. They preserve basically 75% of all stablecoins in circulation. And I think take a long-term view. That's if there's other players in the market that are going to be degraded, it's not necessarily them because they've been so focused on deploying it.

Let me tell you why this Ripple acquisition is so interesting. So they're clearing $3 trillion annually. What database are they using to clear that? I don't know, either like Solana or Ethereum or an L2 or traditional databases or MongoDB or whatever. They're going to move that all onto the XRP Ledger and they're going to clear those trades in RUSD. And if you think about why Tether and USDC, the real usage of stablecoins right now is a clearing mechanism for trading houses.

Yeah.

Now there's some like real-world adoption and stuff like that in emerging markets with Tether, but it's really just clearing and settling. And yeah, I mean, they're buying a platform that can then serve up their own stablecoin and look at Circle and Coinbase and Tether's revenues. This thing's going to pay for itself in a few years.

100%. I mean, I, as you know, at Inversion, we are very focused on deep end and I've thought a lot about the economics, the tokenomics, why DePIN networks, they structurally have certain problems. But as I think about like the same exact same playbook, which is you need to have an anchor partner that deploys a technology and like absorbs the supply. And I'll give you an example. Say we buy a telco company. Um, right now, if you're Helium, you have all these different retail guys that the people that have bought a hotspot, what are they going to do? They want to sell HNT to recoup that investment. So there's constant supply that gets the— that gets— doesn't get absorbed in the market. You earn the reward, you sell it. Bitcoin had the same problem early on.

Yeah.

You need to have someone that steps in and says, I have idle energy capacity, I'm going to mine Bitcoin. I don't have to sell it because it's all free. Like, it's all, you know, gravy. If I own the mobile carrier that is offloading data to the Helium network, I'm saving so much money on COGS that I don't— the helium rewards are like an afterthought. And when you think about, you need these anchor stewards in the same way that Ripple bought this clearinghouse to justify the use case for XRP.

You need the anchor of the business.

And I think like this is where the— it's not a meme, the enterprise adoption, the enterprise use case of these asset ledgers or deepened networks. You need to have an anchor like that that realizes the cost saving. You need to make the business use case. Otherwise, it's all speculation.

Yeah.

And we know how that ends. That is a 4-year cycle. That is like, you know, it's all tied to what Fred Wilson talks about is the self-referential aspect of this industry, which is it's all tied to crypto prices.

Yeah. All right. I tweeted about the Ripple deal and the best comment was from Bitcoin Cadet. For anyone who's not been in the space. Long enough. Jano has to tweet bullishness about shitcoin scamming, shitcoin scamming coins because he doesn't want to work a 9 to 5. So he engagement farms to be a net negative influence on all of society purely for his greed and laziness. He is a true leech of life. So there's the counter to the— I can't wait for the YouTube comments after this one, after we praised Garlinghouse.

So we basically got on the record praising Ripple, praising Chainlink, and praising Tron. Where are they going to have all the The link—

you want to see some nasty messages, go look in my DMs, by the way. Every time—

why do you have your DMs open?

One in 50 ends up being someone who we end up hiring.

Yeah, true. So, so, you know who also tweeted about this? Duda said like our best deals have been like cold DMs.

We hire— I mean, like Dan Smith, who's our head of data, like came from a cold DM. Like a lot of Blockworks' best hires have come from cold DMs. Yeah, yeah.

I, I still don't think I'm gonna open my DMs.

Uh, it's, it's, it's hell. Yeah, it's hell. Um, that's all I got. Anything else?

Um, other deals? Um, yes, Magic Eden acquired Magic Eden acquired Slingshot. Yeah, yeah, that's good. Uh, we talked Jupiter acquired, uh, Drip. Drip, I'm an investor. Shout out to Vishnu. Um, interesting acquisition though.

NFTs. Yeah. So I think the other thing you're seeing with all these deals, by the way, most of the deals that you're seeing today, whether it's deals from like the C5 players or these kind of deals, you're either using a lot— there's only two ways that people are financing these deals. You still— I'm still waiting to see cash deals. Yeah, you don't see cash deals right now. Now you're seeing a lot of token deals where we've got a bunch of tokens we're sitting on and we don't know how to use those things productively, like you're saying with the foundations. Yeah. So I don't know anything about the Magic Eden deal. I would guess a lot of that deal is just token. And they're maybe properly locked tokens. Yeah, same with Jupiter. Same thing. I'm guessing discounted locked tokens. And then on the CeFi side, I mean, you've got a bunch of companies that have overvalued equity from 2022. And, you know, we've mentioned a lot of those companies before. If you're those companies, you want to use that equity, right, to make acquisitions. So when you see a $50 million acquisition, $100 million, $200 million acquisition, announce milestones, oftentimes very, very little cash. I heard, I heard of one deal is a 9-figure deal, there was zero cash involved. It was all just tokens, very overvalued equity.

Yeah, of course. Just, just like when people see crypto companies and public companies, they use your currency as a stock to constantly be strategic and aggressive. All right. I want to get your take on something. Circle. I know we talked about it. What happens to Circle? They've delayed the IPO.

Yeah.

I want to talk just briefly on— we've talked a lot about M&A. We've talked about markets.

Yeah.

There are a slew of companies that were perhaps IPO candidates before Liberation Day.

Yeah, yeah.

Chainalysis, Fireblocks. I'm just saying these like these are—

I don't think either of them were IPO candidates, but point taken. Point taken. The IPO markets got excited.

And so traditional, traditional VC and also like there's a lot of companies in crypto that have done growth rounds of like at multibillion-dollar valuations that could go public. Let's just say that.

Yes.

What happens? Obviously Circle delayed its IPO. Let's just talk about first about Circle and then like, are there going to be more IPOs?

I've been saying for— this is actually where Mike and I disagree is he thinks there's— I think I don't want to put words in his mouth. There's going to be a lot of crypto IPOs.

He's putting words in his mouth.

I don't think— I actually have been saying there's going to be a ton of crypto M&A this year. There won't be as many crypto IPOs. Is that because of the markets? I just don't think these companies are actually mature enough to IPO. I don't think they're IPO-ready companies. Someone like Circle—

but you have a MicroStrategy that has that massive premium. Like, you look at that, you say people clearly there's an interest in the market.

It's not being a real business, right? It's a meme. It's a meme coin. It's not trading on being a real business. Someone like Circle will probably get out, but Circle's in a really tough place. I mean, so we actually just recorded an episode. You weren't able to make it, but with the founder of ZeroHash. They actually are one of the largest minters and burners of USDC in the world, several billion a week of USDC and other stablecoins that they mint and burn. And we just dug into like 45 minutes, dug into the entire Circle business model. Really good podcast that comes out not Monday, but the Monday after. And TL;DR is the issuer business of stablecoins is a tough business. Yeah, it's a tough business. You can think of the stablecoins as a— the stack as a sandwich, right? Where you've got the distribution, great place to be. The kind of chain where all the transactions flow, great place to be. The issuer of the stablecoin, tough place to be. So I think if you're Circle, you need to be thinking about, do we— how do we build a platform where the payments actually happen? Or how do we build the distribution?

That's a fair point. Yeah. Do they get acquired? Do they go out of business? Do they— I mean, I don't know.

That overhead is pretty high. I saw a lot of tweets about, you know, Coinbase is going to acquire Circle. I don't think that happens because Coinbase is getting, you know, roughly—

let's call it roughly—

you can kind of back into the math. So somewhere between $600 to $900 million in free cash with zero— with zero operating expenses. So you've got zero OPEX pulling in almost a billion in revenue, which is driving roughly a quarter of their valuation. Yeah. So that's what, $10 billion evaluation from zero OPEX? Yeah. Why don't you just keep that thing running? Yeah, there's no need.

You don't need it.

Yeah, yeah, yeah. So that's my quick take. That's right. Yeah. All right, folks, that's great for listening.

Any, any books other than, of course, Legends of Barbarians at the Gate? Any, any series? White Lotus came out.

Oh, I don't like that show.

Slow, too slow. Like season 3, just— it's, it's man—

you know what I'd say? It's manufactured anxiety. It's like, you know, the banging on the drums and the—

yeah, I'm like, why? It's the audio. You take—

I got sucked into it too because I feel like all of society is watching it, but I'm like, this is a bad show.

To be fair, White Lotus, uh, some really interesting cases where every season you have like an artist that breaks out, and maybe it's this, this guy. Like, there's a couple of like an artist who breaks out from the show. Like, I don't know if Sydney Sweeney like broke out because she was in White Lotus season 2. I think she was like before, like there was a lot of stuff.

Well, she was in, um, you didn't make HBO show too. Yeah, it was the HBO show.

I think that before it made Euphoria. Yeah, I think Euphoria made like Sydney Sweeney like break out, but it helped White Lotus. Like, she wasn't as well known. And in this case, I think there's like one or two Young, like the Schwarzenegger guy. I think he's like now all over the press. And I like— it's an interesting like— plus it's like free marketing for Four Seasons. Yeah, yeah, true.

Anyways, uh, but anyway, I've been back listening to Invest Like the Best. I was here years ago. I started listening to that show and back on the train. So I, I really like the, um, both Michael Ovitz episodes that they did.

Yeah, we're good. So Founders Podcast, Warren Buffett notes. Yeah. Invest Like the Best. Michael, it's two podcasts, ladies and gentlemen. Don't hit the buy or sell button if you don't need to. Shouldn't we be plugging Blockworks Podcast?

Shoot, shoot.

Go, go listen to the one that we're going to record tomorrow. We'll make sure it's—

yeah, go listen to the episode on Monday. Very good with Felix and Forward Guidance. Yeah, exactly. Of course. Cool. Thanks for listening. Thanks, guys.