How To Trade This Cycle | 1000x

As the old Turkish saying goes, no matter how far you've walked down the wrong road, turn back. And that's what Jaguar should do. And that's what all of you should do if you put on a terrible trade, no matter how much money you've lost on it, no matter how badly your Jaguar rebrand has gone, you are susceptible to the same mind virus that infected the dude in charge of Jaguar rebrand. So yeah, I mean, a lot of bad temptingly bad ideas out there that you have to avoid these days.

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Okay, good stuff. First off, what do you think of the new Jaguar?

What it looks like— sorry, I mean, I'm just thinking like, how do I say this without totally getting us in trouble. It basically looks like someone made a worse version of the Cybertruck, and it's going to flop.

It looks horrible.

It's so stupid.

It's, it's just terrible. I mean, who, who wants to buy something that looks like that from Jaguar, of all places?

When I was a kid, and again, I'm dating myself here, like, I used to really look up to the Jaguar brand, the look of it. Like I had a picture of one on my wall in my room, the XK8. They used to be incredible cars. Now it looks like they've basically tried to go like halfway to being a Rolls-Royce type look, but with like a giant radiator on the back. And they did the go woke, go broke thing. Like, what are they doing?

It doesn't make any sense.

What is that?

Yeah, I don't get it. I mean, I personally hate it. And you know me, I'm a car guy. Yeah. And I've always loved Jaguar. It's classic, elegant, British. It's the finest British engineering besides Aston Martin. I mean, when you look at the Jaguar E-Type, it just conjures up James Bond-ish feelings. And they just completely butchered their brand in one fell swoop. I mean, they got rid of all of the stuff they had accumulated over 100 years of having this brand, and then they just threw it all out the window.

I mean, it's just like, it wasn't even like a mistake you can recover from. They literally like took it, threw it into a bonfire, and laughed in everybody's face and then pissed on it. It was crazy.

It's, it's kind of, it's kind of hilarious, you know. It's sort of, it feels like one person's pet project It's like there's one guy at the company that likes this and pushed it forward, and he doesn't actually care about the company or anything. That's like a little bit of what it feels like. Some random, probably liberal guy works at Jaguar.

Here's my question about that. So I, you know, we've obviously seen this happen a few times. Like there are some just god-awful movies out there. There's this Jaguar rebrand. There are things where you would you'd ask yourself, like, shouldn't there have been somebody who could have stopped this, uh, during the million opportunities before they put this out? Like, this has clearly been in the works for a while. And, you know, here comes the world's greatest transition into crypto trading. I think you're right. I think it is just one guy who's in an echo chamber. He's in his own head. He's in groupthink land. With his inner circle. And nobody tapped him on the shoulder and said, hey, maybe you shouldn't take this iconic British car and turn it into like a— make it look like a lemon watermelon flavored vape for a 21-year-old. I like— I don't understand like what.

Yeah, I mean, so the people that would like this are exclusively the people that don't have the money to buy buy it. And it's just what, what's just, what's just really funny to me is I think this happens across the board as you were sort of hitting, hitting at. It happens in a lot of different organizations. It, it happens, you know, in, in companies, it happens in nonprofits, it happens basically anytime humans, humans get together. Once somebody comes up with an idea and if it's presented from the top and they're in charge, it takes a pretty strong person to say, hey, no, that doesn't make any sense. Let's stop this. And it gets— every day that goes by as investment pours into the system, it gets even harder. Right. I mean, imagine you think that this is the stupidest idea in the world, but you've spent $10 billion working on it already. How can you say, let's just throw it all away and start new? But you know who did do that?

Who?

Satoshi Nakamoto.

Yeah, another great transition. As the old Turkish saying goes, no matter how far you've walked down the wrong road, turn back. And that's what Jaguar should do. And that's what all of you should do if you put on a terrible trade, no matter how much money you've lost on it. No matter how badly your Jaguar rebrand has gone, every single one of us out there is the Warren Buffett CEO of our own little portfolio or large portfolio, depending on who you are. And you are susceptible to the same mind virus that infected the dude in charge of this Jaguar rebrand. So yeah, I mean, a lot of bad, temptingly bad ideas out there that you have to have to avoid these days.

That's 100% accurate. And honestly, speaking about bad trades, P&L is one of the most harmful things in the entire world. Like, that green or red number just messes with people's minds so much. I don't look at P&L. I actively block it out of my head. The only time that I'd say that you shouldn't do that is if you've made truly life-changing money, and then, you know, you look at your P&L and you go, okay, if I take off this trade, then my life changes, then okay, sure, go ahead, take it off. But the trade's the trade. I mean, if you— if you're down and you look at that number, you're going to be impacted psychologically by that number. It's like, oh, okay, I'm down, but I want to make money back on this, you know, token. One thing that I've seen which is really common and, you know, completely irrational is if you lose money or make money on a specific token or trade, you tend to go back to that token or trade to try to make and lose money again. So like, if you lose money on, you know, I'll pick a random coin like Tezos or something, you're like looking at that coin again. It's like, okay, how do I, how do I like make back my money? Like, when do, when do I go re-long this thing or re-short this thing? It's like you, you can, you can get fixated on specific assets instead of just scanning the entire universe. Okay, at this moment in time, what's the best opportunity to make and lose money?

One thing I would say on that though, quickly, to just interject, I think it's a good thing if you figure out a way to make money in a certain token or asset or corporate bond or whatever. Um, it's— I think it's good to return to that because it means you may have found an edge in one little niche. It's when you lose money in something and you keep trying to make it back in that thing and you're, you're never really seeing the ball that clearly. That I think it often makes sense to just put a little yellow sticky note on your monitor to say don't trade XYZ ever again, right? So like that, yeah, actually, actually, I, I agree with you.

I would, I'll amend my statement. It's not if you, if you make money on it, that's different. If you, if you lose money on it and you're revenge trading, which I think is probably going to happen to a lot of people over the next few weeks, I mean, right now the market itself, market is in a It's in, it's in a really, it's in a really fun spot. And why I say it's in a really fun spot is because I, I like range trading, and I think that's what we're heading into. We're heading into an 89 to 91 at the bottom, 97 to 99 on the top. And basically your job is to not take too much directional risk unless you're at one of those, one of those extremes. I mean, if you're, if you want to short the market don't short the market here. Short the market at 97 to 99. If you want to go super long the market, don't go super long right here mid-range. We're at 95 right now. Go, go super long 98, 89 to 91. And in the meantime, I think pairs trading is just phenomenal right now. And the way that I'm scanning the market is really threefold. It's what hasn't run yet Basically, and I mean, the market is just flooded with people that are interested in punting and trading, and a lot of people have made a lot of money. And so it's what hasn't run yet, uh, it's what is, you know, like rank assets by the distance from their moving averages to figure that out. It's what's, what's the flavor of the day or two days, right? Is it dino coins that are running? Is it AI coins that are running? Try to find a coin that's broken out that's a leader in a specific sector and then see if there are any follow-ons, or just buy the leader because these things tend to have 2 to 3 days of outperformance. Um, and then third, it's figuring out, you know, what— where exactly you're supposed to be— supposed to be buying these things, which tends to be right as it's breaking out, right? Not before, not after, like right as it's breaking. I mean, LTC is a great example of this. Broke out above 100, go straight to $130. Chainlink's another great example, got above $20, went straight to $24. Uh, it sees these types of trades, they're quick, they're in and out, you're being selective, but they add up over time. Uh, and you, and you can be, you can be patient with it.

And look at these, pretty—

I'm pretty happy trading in this environment, honestly. I mean, I know a lot of people hate the, hate the chop, but I think the chop's actually really fun.

I mean Okay, so a couple of things to pick apart in what you just said. So first of all, dino coins. If in case you're living under a rock, a dino coin is something that kind of got birthed before the big 2021, 2020-21 cycle. And if you just sort CoinGecko by what's up the most over the last 7 days, HBAR, IOTA, Algorand, XRP, Right? Like, these are Chainlink, Litecoin, like these things are up 50 to 150% in the last week. This is mania. This, this is just crazy, crazy price action. So, um, the next thing that you said that I kind of want to pick apart is like how this is a good trading market. On crypto Twitter, I see a lot of frustration of kind of saying the opposite, right? Like, this market sucks, nothing makes sense. Um, I think the reason why you're having fun and why a lot of people out there are just kind of like miserable, FOMOing, having a terrible time, not really knowing what to buy, or just chasing things after they've already roofed 200%, is because it sounds like you have a framework, right? Maybe what you just described on the podcast, like, uh, you know, z-score versus standing out, moving average. Is like a fairly, you know, it's not like quantum physics level complicated, but it's a framework nonetheless. And, um, you know, if you have a framework, then some of these moves can go from looking like utter nonsense to being actually kind of pretty sensible. Like, okay, I'm buying breakouts this week. That seems to have worked for the first 15 Dino coins. Let me buy the next one that breaks out, you know. Um, excuse me. If you don't have a framework like that, uh, a lot of this stuff, a lot of this price action looks kind of meaningless. And if you trade it, you're probably just gonna lose money. And here's why. No matter how much money people on Twitter claim to be making, no matter how much these coins that came out of nowhere or haven't really been anywhere for half a decade have been ripping, if you don't have an objective framework or process that you can cling to that tells you when to buy and when to sell, uh, regardless of the emotions and crazy things that may be going through your mind or going, going through the chat rooms that you follow, you're just, you're just like up shit creek with no paddle. I'm trying to think of other analogies. You're like wandering through a minefield with a blindfold on. Like there's there's literally a million ways to describe what it's like to try and trade a market when you have nothing to cling to, no idea what you're doing, and coins are just ripping with insane volatility. Like, yeah, you might make money because obviously the direction in crypto is, is up only right now. So if you're long and not short, fine. But like, I personally, uh, over the last week and a half, just for personal reasons, haven't had a a lot of time to like really lock in. And so I'm like, I'm a bit confused, but I don't mind. Like, I know why I'm not locked in. And so I'm just clinging to the positions that I believe in for a time frame of like longer than a week or two and not FOMOing. But if you are going to lock in and trade, you, you better be doing what, what, like something like what you're saying, Avi. Otherwise you're just totally fucked.

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100%. And I think it also— you need to understand why things are happening the way that they're happening. Everybody's freaking out over dino coins, but the reality is, Jonah, what have we said on— we've been doing this podcast for a while, almost more than a year, I think, at this point. A year and a half.

We did our first one, uh, 2 years ago, but then we went, we went dark for a while.

I think every single podcast that we did, we mentioned that retail wasn't in the market. We said nobody's looking at this, nobody cares, nobody's buying. No, no one outside of the people that are already invested in crypto is looking at crypto. And finally, over the last 2 months, that's changed. And so that's been true for 2 years. Then obviously when people come back to the market, they're going to buy the things that were popular 2 to 3 years ago because that's the last time they were in the market. These people aren't— these people don't do research. Anyone that— the first wave of people that come back to this market and start rebuying again after 2 to 3 years, they're going to be buying the stuff that they already know.

To be fair, we did call XRP before the election. We said if a favorable SEC comes in, buy the coins that are—

yeah, I said— you said he's going to be amazing. I did not in a million years think it was going to do that. No, me neither. I like— I, I thought that that was going to be a slam dunk. You buy it on the headline, you wait 2 weeks, you sell out, right? Kind of trading.

And if you missed the XRP trade, don't worry. The only reason why it's ripping this hard is because literally almost everyone missed the XRP trade except the XRP Foundation.

No, the XRP Foundation— yeah, the XRP Foundation held the trade for a long time and is now where the, the equity is worth a lot of money on, uh, on Ripple. I mean, but the thing, the thing about Ripple is that it was the darling of 2017 and one thing I think is 2013, 2017. It didn't really do that well in 2021. And I think a lot of that is because the foundation sold into bids. And the other reason is that there was this focus in '21 on reality. And obviously '21 outpaced reality tremendously, but there was a facade, right? Everyone wanted to buy DeFi because maybe DeFi was the future. And what's happened since '21 is that idea of reality driving price action has completely eroded, courtesy of our meme coins. Yeah. And so Obviously, if meme coins are going to do really well, why won't XRP go up in a straight line?

Like, why the most hated rally?

Why wouldn't Dash go up? I mean, one of the things that's insane to me is IOTA. IOTA's pulled 100% move in a few days, and the reason for that is why not, right? It has a good— it has good history, it's got a good chart, you know. Okay, let's see, actually, from the bottom to now, IOTA went up 5x. That's nuts. That's insane for something that is a complete and utter scam. And the reason is, well, you know, one, it was pretty heavily shorted, uh, and two, it's why not? Why, why not, right? That's, that's sort of the mentality.

And this is what the market missed.

Point out is because because why not? The things that look good on the chart are just going to go up because people are cycling, and it's your job to figure out what looks, what looks good and what looks bad and put on some trades to try to capture that. Because this is, I mean, this is a really great trading market. There's a ton of dispersion. The one thing that I wouldn't suggest necessarily is shorting, you know, alts, um, you know, that haven't gone up and got gone up in a straight line. And even if they've gone up in a straight line like XRP, it's still a little bit dangerous. To short alts, but you know, you can hedge a little bit, maybe sell some Bitcoin, you buy, you know, your Cardano, your IOTAs, your 1INCHs, your APEs of the world. I actually really like APE. It just does a chart.

This is the phase of the cycle where everything that's like the most hated rally was supposed to be ETH, but it turns out that it was XRP. Everybody loathed that rally. And yeah, APE coin is a pretty disgusting, detestable asset.

It's horrible. But guess what? It would piss everyone off. It's also, it's also an SEC-related asset. So it's also probably going to go up a ton and it hasn't yet. It's gone up in line with the market.

Bored Apes, the floor tripled, didn't it? Just like in the last week or so. All of these disgusting, like, like just absolute douchebag assets are just mooning. It's crazy. And they look—

and they look— they look good, man. And, you know, this stuff looks good across the board. Go, go chart. All of this against BTC, starting to look pretty damn good. And, you know, like, why won't— why, why can't ICP go hit $20? It, you know, it's, it's, it's gone up. That would do in line with the market. But these things are hated, and that's, that's sort of the beauty of it. Now, you know, timing is everything. These assets are extremely volatile, like it's basically impossible if you don't like really look for good entries. You're going to be down 5 to 10% on these trades at some point. I mean, these assets are insanely, insanely, insanely volatile. Um, so you know, maybe, maybe you start buying them when you get, when you get some liquidations like this morning around 9:30 off the South Korean news. Another thing that I've noticed is that the market has tended to trade really well over the weekend. There's a lot of, a lot of money coming in on the weekend, right?

Such a, such a bullish long-term signal. What that means basically is that people are finishing their weekly sort of day jobs and then sitting around on Saturday night like gambling at home, right? That's, that's what that means. That means that retail is back basically.

Yeah. And you know, it's good, it's good for us. So, you know, I'll say buy these things not when they're necessarily going up, but like when you can get some sort of liquidation run. Preferably it's a retest of a breakout level, and then preferably you're looking for the weekend for these things to do well, right? And so there are all sorts of different ways that you can structure these trades, but that, that's how I would That's how I've been approaching it and it's been going reasonably well, you know, during, during a period of chop, made some good money. So let me ask you a question here.

Are you going to be like, are you buying the coins, the dino coins that have already roofed, or are you looking at like my personal least favorite asset of all time, Polkadot, which is a dino coin that's still kind of festering near the lows? Same.

Yeah, I don't know. Dot, dot's Stock's gone up, you know, 2x.

That's nothing in this market from the lows to the bottom.

Uh, but yeah, I mean, look, the, the thing is that I, I do think that it's probably— actually, actually, you know what, I didn't really think— I didn't really look at the chart too closely. It's actually a pretty good trade.

Yeah, like, I'm just looking at that, like, for, you know, anyone listening, or, or me even It's like, yes, dino coins are going up. Yes, you're supposed to buy strength in dino coins. Like, are you supposed to look at the ones like XRP that are basically up 10x from the— or 4x, 5x from the lows? Or are you supposed to look at the ones that have just started to like pick up a little bit? The other trade—

the other trade, by the way, that I kind of like are I like buying these assets that have a good chance of a Coinbase listing. I mean, they listed— they listed Mudang. Yeah, so just, just go look at like the top memes in terms of volume, like the Peanut, Goat, Nero, uh, Popcat. Those are probably reasonably good bets that they're going to get a listing at some point. Um, if you're really nervous, I don't necessarily suggest this, but you could short WIF or bonk against it because they already have those Coinbase listings. Now you might eat some pain in the meantime, but basically what you're looking for is on those listings, a 50% run, which is, is like very unlikely that Peanut is flat and WIF is up 50%. That's like reasonably unlikely.

Yeah. I mean, you know what trade I hate, which I've seen a lot of people recommending, is the, oh, XRP is up, so try to make money on XRP memes and XRP DeFi and like get involved in that ecosystem. Kind of trade. That I hate. I think that's very 2021. I think that we're in meme land. I think that you're supposed to just trade things like the valueless memes that they are, uh, and not try to start convincing yourself that the paradigm we're in is, you know, to quote you from earlier in the podcast, like the sort of sheen of a real world, uh, paradigm that we were in, you know, let's say 4 years ago where If something was popping, it was because there was like this kind of venture capital mentality, like, hey, this could be, this could be like valuable to the masses one day.

Just, just to hop in there, one thing that I think you're missing is that most of the stuff is a meme on XRP, like Army.

Yeah, no, Army, okay, fine, maybe, maybe you do that for a trade, but like, don't, don't like start investing in ecosystem plays. I think this is about pump and dump. How do I get into some meme before everybody else does and then get out before everybody else does?

Yeah. I'm taking a look at— I do think that what's happening right now is going to lead to a wealth effect. My bet is at some point, during the next, call it, month of December, we have that dynamic play out where you look at AVAX, for example. AVAX has gone up, gone up in a straight line. People that bought AVAX, they're probably going to try to move their money to buy the memes on AVAX and the on-chain stuff. I mean, it's probably going to be like a week, but it's worthwhile, you know. I think, I think The, the issue is in this type of market, there's, there's so much opportunity, right? There are a lot of people that have done very, very, very well trading the trenches. And I think that—

what do you mean by that? I've never heard that term, trading the trenches.

So effectively, I know people that have made multiple millions of dollars by getting into memes that are like $1 to $5 million market cap and then just consistently flipping them at 50.

Yeah, I see what you mean, right? It's like you're just—

you're not making big money, but you're making consistent money because these guys tend to normally have some sort of edge. Um, you know, they, they know some of the influencers that are going to be part, part of the project, or they've done their research. They like look at Twitter followers It's actually oddly sophisticated.

Yeah, it's a different set of fundamentals, right? In the past, the fundamentals that you were looking at would be like TVL or developer wallets or something, or number of wallets or developer SDK downloads. Honestly, this time, I think, like you said, we're in meme land and it's all about influencers, followers, KOLs, whatever. I hear you on that, but it's still fundamentals. Yeah, I mean, actually, the market, you got to respect, for example, like, look, looking at Cock Inu, I don't know, looks pretty good to me. Me too. I was just like, I was sitting here debating this, talking, talking markets.

Like, I would buy that coin, you know, like, I mean, you know, are Tron coins going to start ripping because Tron ripped? Maybe.

Tron's a really interesting one because that is actually something where there's a real exogenous use case that keeps pumping money into that ecosystem. And that exogenous use case is, for whatever reason, it's just popular in certain emerging markets for Tether. Tether on Tron is a thing, and hell, that, that pumps value into the ecosystem. So it'll keep the party going a little bit longer.

Yeah, it's, it's pretty, it's pretty amazing. The one question that I think a lot of people have is, when does this end? Or like, when, when, when does this, when does this all come crashing horribly down in everyone's face?

Yeah, let's Morgane that. Let's come up with—

how do you avoid that? Right.

I mean, we should, we should come up with some scenarios. Like, I'll start. I think that one way this ends is something complete, like, okay, let's start with the scenario where it's something completely out of left field, right? Like a South Korean civil war, right? I think this is unlikely, for the record, but like, just, you know, watching the news today, it's, it's kind of like, we can never be too complacent about the idea of just some random geopolitical event causing a big sell-off that triggers a bunch of leveraged wipeout liquidations. And then, you know, like Bitcoin probably doesn't get hit that hard. It's probably down to like $80,000, $85,000 at worst. But like, I think the let's, let's go like borrow money from mom and dad to buy fucking HBAR trade is over, right? And those coins come down 90%.

Yeah, I mean, my understanding of this market is effectively that we have tremendous— still, we still have tremendous demand for BTC, but that money has started flowing out to alts because what's happening is that there are a lot of, a lot of crypto natives have made good money on Bitcoin. I think over the last 6 months, especially heading into the election, crypto natives are more denominated in Bitcoin than they probably have been any other time in the past.

Such an easy trade.

And so what I think is a lot of that wealth is diversifying out. And you also have obviously the retail that's come in and started bidding the market up tremendously. Now, in order for the alt complex to remain high, there needs to be either a consistent inflow of retail, which requires consistently high prices, or there needs to be wealth from Bitcoin that continuously flows in, which requires Bitcoin to go higher. So generally what tends to happen in these environments is that Bitcoin will range for some period of time, whether it's a week, 2 weeks, 3 weeks— normally, you know, 3 to 4 weeks— and then you get a mass deleveraging, mass sell-off. Because what's happened is that altcoins during the range have gone up a ton, and then people start to take profit, and Bitcoin is not getting any, any new, any new allocation or is being met with sellers. So the wealth from Bitcoin slows down because you know, the— at some point you reach a limit. Everyone sold out of all the Bitcoin that they, that they want that is going to rotate into other, into other alts as opposed to just, as opposed to just cash. And so then the complex comes down. So the alt world needs Bitcoin to continue to go up in order for it to continue to go up in a straight line. I understand that that's a little funny because time is a crucial element. Bitcoin ranging is really good for alts. Over a short period of time. But if Bitcoin ranges for too long, then that's really bad for alts.

Uh, if Bitcoin sells off, that's worse for alts, basically.

Yeah. Um, well, the, the range, I think, you know, if, if we do consolidate here, you tend to not consolidate at the highs. You tend to sell off, right? Like, very, very rarely does Bitcoin, for the first time it reaches new highs, consolidate, go sideways, and then continue up. Normally it's a sharp sell-off followed by a sharp buyback. Um, I mean, the way that I'm looking at this is kind of similar to, you know, March of this year, where you got it, you got up to the highs, you sold off, you ranged for, you ranged for a bit, and then you end Bitcoin ended up selling off, right? Same thing with, uh, same thing with Feb '21. Range for, range for a bunch of weeks. It was a big range, but you, you know, you range for a bunch of weeks. Once you hit the highs, then you sell off, then you make a new run.

Um, it's actually a really good point.

That, that's my best guess, is that this pause here is a pause for a range. The market doesn't die, you know, things like, you know, alts continue to do well in this market environment that tricks people into thinking that Bitcoin's going to go up and then Bitcoin actually sells off.

Yeah, I mean, that goes for any, any, like, Bitcoin's a commodity, goes for any commodity, right? Like, you never just like break all-time fresh highs in the midst of a supercycle on all, on like, you know, basically tremendous amounts of demand and then just suddenly plateau on fresh highs. Usually there's too much volatility and interest at those levels to sustain that price level, and then you do plateau a bit lower before it goes higher again. So I'm, you know, I'm, I'm continuing to add to crypto at this point. Like, I, I've decided that my portfolio needs more crypto. Um, and I'm personally—

how would that even— John, how is it even possible?

You know, I just, um, The fundamentals have shifted, be like bullish in a way that exceeded even my already incredibly bullish expectations. Like, I don't think the market understands just how ludicrously bullish this particular setup is fundamentally for Bitcoin. Like, it's ridiculous. Um, you know, in the past it was just sort of like, okay, this, this technology is better than existing payment rails. Bitcoin keeps central banks honest. It's always going to have a role as digital gold. You know, there's going to be a slow, steady march towards adoption over time. Like, I want— I'm max convicted in this. Second biggest conviction asset class-wise is, you know, SPY, US equities. I'm going to have my biggest allocation of Bitcoin, second biggest allocation SPY, and so on and so forth. Now what I'm thinking is like, I don't think the market understands how important a strategic Bitcoin reserve will be, um, for two reasons. The first is it will be the kind of the first— like, I think it's happening, so I'm taking it as a given. Like, I— whatever delta the market is assigning it is too low. I think it's 100%. Um, I think that the incoming administration understands the importance of a global— an alternative global reserve currency that anyone can transact in because the dollar has been irreversibly weaponized to a point where, you know, it's kind of past the point of no return and it's, it's just damage, right? You see Trump threatening people, uh, threatening BRICS not to use their own currency, blah, blah, blah. Like these are all stopgap measures. This isn't going to stop the tide that is ultimately turned. So once this Bitcoin reserve happens, um, first of all, it's important because it's seminal. It basically establishes Bitcoin. As the literally the, the global alternative reserve currency of choice for anybody. And that alone, I think, makes it worth a million dollars a token. But the second effect, even if I'm wrong about number one, is if the United States acts and does that, um, there will be other countries front-running them and other countries FOMO-ing it in after the fact doing the same thing. Like zero central banks own Bitcoin right now. I guarantee you, Abhi, that like that number will not be one forever, right? Like if the US decides to do this, the number of central banks that own Bitcoin will be like dozens. And so that's, that's a lot.

How much— one question is how much of this price action is baking into some probability of that happening, right?

None of it. Well, okay, some of it, right? Like people like you and me.

I don't think, I don't think it's none. Down a bit. That's why, that's why I think that we probably get a sell-off end of the month heading into, heading into inauguration.

I think we get a dip too. I'm looking to buy it. But my point is that this is like the ETF. There just isn't enough capital in crypto right now to front run something that's sized like that. I—

yeah, I mean, but the probability of it happening, I think, is pretty low. That's the only issue. If you actually think, okay, is Trump going to introduce a strategic Bitcoin reserve? Probability is pretty, pretty darn low. It's not zero. And I've talked about this before, but it's the hope factor that keeps Bitcoin up higher. Basically, until he says that's absolutely not happening, people are going to speculate that it might happen at some point. But the longer that it goes on without happening, the more people are going to chip out of that trade.

And so Holly Market says, will Trump create a national Bitcoin reserve? In the first 100 days? Where would you say yes is, Abhi?

8%?

24%. So my contrarian view is that that's more like 50% to 70%.

That's scary to me.

Yeah, I mean, it's definitely not bull— if the market's that pulled up—

I don't know. It's pretty darn scary. And I'll say it because 24%, I think, is a huge overestimation in the first 100 dates. The first 100 days.

But in the first like 400 days, you know, I, I think it's pretty close to 100%. I really think it's gonna happen, but maybe I'm crazy.

I mean, what's your reasoning?

My reasoning is the people who are being in charge of all of these different agencies that matter. Like, Bessant has spoken on Bitcoin. Trump himself is like doing DeFi projects and his wallet's buying Ethereum right now. Like, these people are aware of the fact they've taken a very Russian view on this. Like, so just, just for a bit of history, Russia banned crypto a few years ago, and then they U-turned and they said, you know what, This thing is real. It's happened. Um, we're not going to fight it anymore. We're going to legalize it and make it a form of legal, not legal tender in Russia, but like, we're going to acknowledge it and create a regulatory framework around it. China's done the same thing. The US is kind of like 2 years behind all of that. So basically they're U-turning right now. And the reason why they're going to embrace it is because they're going to be forced to. It's bigger than the dollar. It's bigger than the US economy. It's basically something that's kind of indisputably going to hold its value and be treated as a means of exchange, even in countries that the US wants to sanction and suffocate. They may as well have their sort of, um, you know, and they may as well have some skin in the game, right? They're not— they're basically— Trump's administration is a bunch of economic realists, uh, at least at the the treasury level and the economic level, they're not like, they're not going to try and bury their heads in the sand and pretend this thing doesn't exist. They're all acknowledging it and kind of getting ready to adopt it because as, you know, as you and I agree, it's kind of a good hedge, right? For both a sovereign like the US, the Treasury Department, and for, you know, you and me. Also, these people know. Like they know they're going to be spending their asses off cutting taxes and doing a lot of like, yeah, maybe the government efficiency department will cut some costs, but like this, we're going into a dollar debasement environment. And so they would be foolish not to be, you know, kind of like accumulating some Bitcoin against the back of what they know they're about to do. And the Treasury Secretary, the incoming Treasury Secretary, is a macro hedge fund manager. To me, this— it all just feels obvious, but maybe I'm, maybe I'm wrong, you know.

I don't think, I don't think necessarily that you're wrong. I think that it just takes longer than people expect it to, right? For, for, for the idea, I actually do think that there's sort of a distinction here. One, Trump has already said that he's not going to sell the current Bitcoin that we have on our balance sheet, which could theoretically be construed as having a strategic Bitcoin reserve from day, from day one. But the question really, like the core of the question is, is Trump going to authorize purchases of Bitcoin?

Ultimately, I think that there's a different sort of economic warfare that's going to take place over the course of the next 4 years. I think that that economic warfare is going to take the form of countries like BRICS, which are threatening to de-dollarize their global trade. Like kind of starting to do it. And, you know, for the most part, the US can fight back with sanctions, which creates like even thicker hemispheres that need to be perforated in order for global trade to flow. Maybe that'll work, maybe not. But the ultimate like downside for the United States is that global trade de-dollarizes entirely. And in that scenario, I think you want to be able to participate in whatever's next. and it's certainly not going to be some like rinky-dink BRICS, BRICS coin, right? So that's sort of what is being discussed. And like, again, going back to Bessant, like he was Soros's number 2 when he broke off on his own. Like he bought a bunch of Bitcoin. Um, he gets it, right? So kind of, kind of reading the tea leaves here.

Yeah. I mean, just look, I agree with you. The benefits, and I think the US should do it. Question is, you know, what's, what, what's the path for them to actually accomplish that? And will they be able to accomplish it? And my take historically has been going to be harder than we think for them to actually pull, pull this off because they're going to face a lot of— they're, I mean, they're going to face a lot of pushback, right? Kind of across the board. Oh, you know, you're— it's the easy— the easiest attack is, oh, you're going to do this to enrich yourself.

I, I did some research on what it would take to establish a sort of a strategic Bitcoin reserve. There are a few different ways you could do it. Through budget reconciliation, um, which doesn't require a supermajority, like, congressional vote, um, in the House and the Senate. You could do it— excuse me— the sort of, like, kosher way, which is to get everybody on board and to pass bill and to, you know, make it kind of blessed with, with the full weight of Congress plus the president, um, which is slightly less likely. But then there's sort of an easier way, which is you could just take like the Silk Road Bitcoins, which are sitting with the federal marshals, and instead of doing what the Biden administration is currently doing, like if you follow the, the WhaleBot accounts on Twitter, like the US is still sending 10 figures worth of Bitcoin to Coinbase to sell from time to time. Like they did some yesterday, which I think is interesting, right? Um, you could literally just take that from the US Marshals and move it to the US Treasury or to the Fed. Um, move it, just move it from one government balance sheet to another. Uh, I think by executive order, and that wouldn't be a big deal. And then it's there. And then once the genie's out of the bottle, you can't really put it back in. So I think one way you could see it done is it just gets— the Silk Road Bitcoins just get established as the SBR, and then once it's there, buying more is like probably the decision of like an appointed cabinet member rather than like, hey, we, you know, that's how oil gets bought for the SPR, right? For, um, they just put out a tender and then local producers and, you know, pad 2 and 3 will just like submit barrels into the tender and the government will buy the cheapest barrels. But like, and the same could happen for Bitcoin. You could just create a strategic Bitcoin reserve out of what's already there. But even, I mean, that's obviously easy to do, but I think there's like, crypto's enough of a bipartisan thing at this point that you could probably get strategic Bitcoin reserve approved with a bill if you wanted to. Because Brian Armstrong put out a tweet about this, like, I forget the exact number, but it's like a ludicrous number of, like, of Congress members are pro-crypto now. Crypto fucking lobbied their asses off this time, and it worked.

Yeah, I know, I know that we won, you know, basically everything that we put up money for, we won. Which is pretty amazing. So maybe, you know, maybe, maybe I'm wrong here. Maybe the probability is a lot higher than I initially thought. And maybe we don't get a sell-off. But it's— look, if that happened, that would be the most insane thing in the world. I mean, Bitcoin would go— Bitcoin would just go up in a straight line because every central bank in the world, you're right, would have to go ahead and buy this thing. So, I mean, one thing we're thinking about then is like, what's the easiest way to track whether this thing is actually going to get through or not. Like, how do you, how do you even begin to assign a probability to this thing, right?

Polymarket, maybe you just refresh that page. Like, if somebody has insider information about that, and somebody will once the administration gets going, like, these conversations are going to happen behind closed doors. Somebody's going to start bidding that market.

The thing is, with this much information in the market, one thing that I've been thinking about is that it's becoming an insider market. It always has been, but it's like really becoming an insider market because specific actions by this administration are pretty clearly like known beforehand. One, one example of this is reserve rights. I don't know if you saw this today, but the potential pick for the SEC, this Paul guy, Paul Atkins, is an advisor to this token called RSR. And 12 hours before any public announcement— I think it was 16 hours before any public announcement of him being nominated to be the SEC chair— the thing went up 100%. It's very clearly information leakage.

Yeah, because that's, that's Commodities 101. This is not like the equities market where You know, like AOL and Time Warner are going to merge and there's a quiet period and no one's allowed to say anything. And if you do something on that, it's insider trading. The way commodities works is like OPEC will talk about doing some collusive cartel behavior. They'll, they'll tell their, they'll ask their 10 favorite market participants what they think the price action will be if they do XYZ behavior and reward those 10 participants. By giving them the heads up 24 hours before they go and do it right now. The reason why it's different in commodities and it's not technically insider trading and it's not illegal is because if OPEC does XYZ, that doesn't guarantee that the price of oil is going to do, you know, ABC. It's, it just, it makes it likelier, but it doesn't guarantee it. Whereas like AOL and Time Warner merging at some fixed price, like you, there's a guarantee there. So this is why there's no insider trading rule in commodities. And there's no insider trading rule in crypto either.

I'd wager that there's a pretty— it's pretty obvious that Bitcoin's got 100% certainty Bitcoin's going up if this thing gets— this thing gets through. So yeah, I don't know. I mean, until then, I'll just be playing, playing alt roulette.

Long roulette is—

I love you.

I love your framework for it. It's like we're range-bound in Bitcoin. Ranges in Bitcoin are good for alts until they're not. So you have to be very like attentive to when the music stops in alts. I'm looking to buy if Bitcoin— like, I'm looking to buy with both hands if Bitcoin dips down to $90K. Uh, unlike you, I will not be looking to short Bitcoin if it trades up to $100K. I'd be too scared to do that. I think it's—

no, I'm not, I'm not short— I'm not shorting Bitcoin up there.

I—

yeah, I said if you want to short Bitcoin, imagine— like, I mean, even, even something like SOL/ETH, right? SOL/ETH the ratio looks really good. Uh, and even if the market goes down, I mean, if it goes, if it goes halfway back up to the highs, it's a 13% move that you can size a lot of money on that thing. And it's a reason— I think it's a reasonably high hit rate trade.

You think buying Solana looks good, right?

Yeah, yeah, yeah, I agree with you.

I, I completely agree with you.

It looks really good.

Ethereum looks overvalued to me. Um, versus SOL. Like, I just—

the—

yeah, we— I mean, we've gone into this ad nauseam, but I think SOL/ETH is a great trade. I'll— have you noticed that NFTs are picking up? Yeah, a bit.

I have. I was just looking at that. Pudgy Penguins— there's a rumor that they're going to be launching a token. Cool. Which is one of the reasons for that.

Um, but some of them, even in general, the crypto wealth is like spreading into CryptoPunks again, like people.

Yeah, but look, okay, I'm just going down NFT price floor, 78% change in floor. CryptoPunks plus— and this is, I'll do dollar terms or ETH terms, sorry, uh, plus 20% for CryptoPunks, plus 62% for Bored Ape Yacht Club, plus 30% for Pudgy Penguins, 33% Autoglyphs, 12% Milady, 35% Chromie, 102% Fidenza, 21% Azuki. I mean, this is in ETH terms. Against dollar terms, it's higher, right? Because ETH has gone up over the last 7 days. So I mean, things are looking, things are looking really good. I think I'll be able to sell my Rock for 8 figures at some point.

I think so, although I don't really see you doing that. Your Rock is your identity, Avi.

I could never sell it. I love that thing way too much.

I almost rage quit my Punk on the lows, and then I was like, my emotions are telling me that this is the lows. I'm not going to do it.

Anytime you're close to rage quitting, that's basically the lows. Oh look, Solana is going up just as I said that. Is somebody listening to our podcast, or are you buying?

No, I'm not buying. I'm just watching it tick up too. I'm like, huh, this is crazy.

Um, Like, right as I said that, goes up a percent.

Speaking of our podcast, in the, uh, Niger Delta Ventures Telegram chat room, some people were asking us to talk about some things. Um, we covered it all.

I think we did.

They wanted to know about crypto equities and whether— oh, let's just touch briefly on MicroStrategy and whether it's a systemic risk for crypto. I don't think it is. I think that it's, it's just negative gamma. Like the higher Bitcoin goes, the more MicroStrategy buys. The lower crypto goes, like maybe they're not selling Bitcoin, but they're certainly not buying any on, you know, when it's puking. So, you know, I think it's just, it's basically like negative gamma to the upside. It's like the, the world is short a call to Michael Saylor. And that's how it, that's how it works.

Yeah, I think, I think that's, I think that's a fair characterization of it. MicroStrategy itself could implode and Bitcoin price wouldn't really go anywhere other than pricing in the fact that Saylor is probably not buying anymore soon. But yeah, the only, the only time where it gets really hairy, this is later in 20— in 2026 or 2027, there's a payment come due. Right? And if the stock price is so low or trashed that he can't pay it back, then we're in big trouble.

Yeah, then he's got to sell.

Very, very, very unlikely to happen.

I mean, the, the— I haven't done the financial analysis myself, but what I've read is that all of those payments, his debt payments, are covered by MicroStrategy, like, trad software revenue or profits. So if that's true, he never has to sell Bitcoin and we're good to go. If it's not true, there's a lot of Bitcoin to be sold. I think the most bullish thing in the world would be if like Saylor loses the keys to his multisig wallet and all that stuff is just a stranded asset. Imagine. I can't believe one dude is controlling that much Bitcoin.

Could you imagine if he has to pay his debt and then he just sets that? Just for fun.

Sorry, I don't know where it went.

Oh my God, man's gonna go down in history as one of the greatest traders of all time.

Well, we'll see. I, I think he probably will. He certainly at this particular P&L point, like, he's in the conversation. You can't, can't deny it.

Let me be honest with you, I mean, there's no way he loses personally. Like, there's His financial engineering was so good and so tight. He himself has made billions of dollars from selling MicroStrategy stock. I'm sure of it. Yeah, this guy is a genius. This guy's a financial engineering genius, and it's not even that complicated.

Like, the average person can understand it. It's like you buy a business that generates trad revenue You borrow against it to buy Bitcoin, cover the debt with the trad revenue, and then you just have a bunch of Bitcoin. And the higher Bitcoin goes, the better your— the better your borrowing terms become and the more you borrow. It's insane.

Like, it's incredible. This guy's so good. Anyway, Jonah, I got to hop. Me too. But This was awesome. Let's get this episode out ASAP.

Yeah, this was really great chatting with you, dude. See you soon.