Time To Lock In With Chiefingza | 1000x

Audi, we've talked about this for like years, right? You know, range-bound markets for majors are great for altcoins when the environment is right. And it almost feels like that's the setup here where everyone right now is kind of hiding out in majors being like, you know, I'm safe here, I'm safe in Bitcoin, I'll make more moves around the election and I'm just going to avoid alts because, you know, if Kamala wins, the story's over. So I do think the market right now is obviously overweight majors. And underweight alts. But the game with alts is just so much harder than it used to be, right? Because there is less money in the space, um, and so there's just more dispersion. But if you are able to actually pick the sector correctly, you know, obviously that's kind of how you produce alpha in this environment.

Welcome back to another 1000x Podcast. We've got our favorite guest Jason Yanowitz, chiefing za on To Talk Markets. Since we last recorded a podcast about a week ago, a lot has changed. Bitcoin is now above $60K. People are no longer pre-rich, they are simply rich. TAO is almost 600. Things have gone well. But I wanted to start off with, uh, there were two major predictions that you made last time we had you on the pod. One was that AI coins would absolutely rip. And you mentioned TAO, and the other was ETH BTC would do well. So one of those things obviously did not work, and then the other worked really well. I think TAO is almost 2, more than 2.5x since you last talked about it. I think ETH BTC is down about 10%. So that was good. But just wanted to catch up and see how you're feeling about the markets and your calls. I mean, are you selling any TAO here? Are you buying ETH BTC?

Thanks, guys. Like I said, good to be back. This is This is hands down my favorite crypto podcast and I guess crypto trading podcast. Yeah, so those last two calls, yeah, one worked out well. I'm sure we'll talk about Tao kind of on the, you know, for on the show. Not really doing anything with my Tao position. I think there's, yeah, there's kind of a lot to discuss there, but don't, don't really feel the need to do anything now. It kind of has some remnants of some of the stronger coins that, you know, went on these big, you know, trending moves sort of last year around this time, around October 2023. Obviously, there are kind of risks there, but still, still just as bullish. And then EPTC is an interesting one. Definitely got that wrong. I think actually I remember listening back to that podcast, Jonah said said ETH was kind of his Trump trade. Uh, and I think that's actually just played out, you know, really, really spot on, right? Obviously, as I guess confidence in a landslide victory has waned, so has kind of ETH BTC. And there are obviously structural things I think that happened, um, at that time with just people obviously sitting in stale positions because of the ETF and that not really going as well as everyone planned. Um, Again, not to sound like a broken record at these levels, I do think it's tough not to be somewhat constructive, just psychological point of view. It's kind of, you know, even the most vocal kind of BTC bear, one of my good friends, you know, even in between 2023, early '23, he sort of laid out the exact kind of ETH bear thesis of everything that would unravel with the whole modular vision, how it was never supposed to be marketed as money and We actually spoke today, funny enough, and he was kind of like, 0.04 was always what I was looking for. But I do think it's nuanced. The election, you know, plays a big role. So we'll talk about that, I'm sure.

Yeah, I mean, I definitely want to get into some of the, some of the nuances of both TAO and ETH with you and also see what else, you know, you've been looking at. But before we dive into all of those minutiae of those, those two ecosystems and more, You were at Token2049. That was the talk of the town on crypto Twitter. Neither Avi nor I made it out there. Can you kind of tell us what happened, what your general takeaways were, and what you think it, you know, what's— give us the pulse of the crypto market right now. This sounds like a really rel— like people were more excited about this conference and more vocal about it than they have been about many conferences this here, if not all of them.

So yeah, I thought, I mean, the energy, honestly, the conference was great. Obviously timing-wise, it was Token2049, you know, you had F1, which just brings general business crowd together. You had Balaji was doing the network state or his network state event and obviously Solana Breakpoint, you know, so the energy kind of in Singapore was, yeah, was kind of on fire. And my general takeaway, it's funny, this actually happened markets-wise last year. I think we bottomed around the same time, but I think a lot of people obviously were kind of gone for the summer doing their travels, doing whatnot. And, you know, a friend even said that they kind of said, you know, this is almost like crypto's Davos, where if you're in crypto, you were kind of in Singapore at this time. And so I get the sense that I think a lot of people got together and, you know, really focused for the first time, right? Everyone's saying it's time to kind of lock in for the fall. And you kind of got the sense that, you know, a lot of interesting things are being built. There are a lot of smart people in this space, you know, despite what you might see on CT or, or kind of glean from all like the meme coin discussions. And the other thing I noticed too is you just got a sense of how big the industry really is now, right? Back in the day, kind of, you know, 2017, 2018, you go to conferences and it would be a lot of the same people. You know, now there's, there's so many different side events, so many different even sectors. You just realize how big the space is and how many new entrants there are here, you know, building new cool stuff. So yeah, I had a great time. I think I'm feeling super like, I guess, energetic after that. And I think most people that were there probably feel the same as well.

You mentioned people are building cool, interesting shit. Can you maybe touch on a couple of, couple of projects or ideas that you heard out there that, that were kind of exciting to you?

One, one event, not to sound like it's like a broken record, but one event that it definitely did stand out. There was a like a BitTensor Asia meetup, which was, I just thought it was like very high signal, no real like traders in the room, just mainly, you know, subnet developers, some, some kind of investors like DCG had a presence and it just felt like had a real good community feel to it. No frills, just technical discussion. Uh, there were a lot of like decentralized AI sort of side events as well. Um, that's kind of where I mainly focused, uh, my time. I didn't actually go to the conference itself, just a lot of these a lot of these side events, but some cool stuff happening in the social world. A lot of excitement on like about RWAs, Deepin. I did stop by Solana Breakpoint. Honestly, the energy there was super strong. You could just see like a lot of new faces, big, big focus on consumer apps. I was kind of meaning to go through some of the talks on the YouTube channel. I mean, obviously Firedancer was presented as well. I think there's a non-voting client that's live on mainnet now. So definitely a lot of excitement in the Solana ecosystem as well.

Yeah. One thing that people were talking about a lot, the performance of the SUIs and SEIs and these L1s of the world that are competing for Solana spot. I know, was it SEI or SUI? I always get them confused. One of them had a big event at Token. Did you get a sense for how real that is? Because I know a lot of that is driven by Asia and their focus is there. So I don't know if that bled through, like there's maybe a growing of breadth in the industry as well.

Yeah. So I actually did miss, I did miss Sui Builder Day. That was an event that I wanted to go to that I wasn't able to. I can't say that I heard specific chatter about it. Obviously people kind of were talking about like token price and whatnot. And funny enough, Sui did actually hold strong against what, you know, was typically a pretty, you know, good top indicator, right? When a project usually got Steve Aoki play at one of their events, I think there's been two historical times, usually marks a local top. But, uh, it looks like Sui powered through. I think they had him playing at Marquee for an event, which also I was not able to make. But, um, you know, some, some real strength there if it's able to get past the Steve Aoki curse.

That's true. A lot of people are talking about selling that as the, all right, there's got to be the top, this has got to be the top. And Honestly, historically, it's been pretty accurate that conferences mark crypto tops. It's like you get like a small, small pump into the conference, then everyone, everyone sells off. And Token has seemed to beat that curse. But I think it's also just because people are just so mentally beaten over a lot over the summer. I think you just got smacked around so hard and everyone's been conditioned now to sell every rip. I mean, Joe and I have been talking on every podcast. All right, we're in a ranging market. We're in a ranging market.

We're in a ranging market.

Market. And at some point you have to think to yourself, all right, are we ready to trend? So I wanted to get your take on that. Do you think that we're, we're ready to trend? Do, do you think this is still a ranging market? Are we still selling rips, buying dips, or we're just holding tight?

Uh, I think we're— I think we've just kind of transitioned into, uh, a hold tight mode. I think majors can maybe chop around a little bit longer right? You maybe have some front running of this October meme, um, where we might need to just— I, I really don't see any like big, big downside in BTC and ETH, like sustained big downside. Obviously intraday flushes can happen, um, and yeah, again, maybe, right, you got— you had some front running of October and maybe you get a flush into it where people are like, oh look, it didn't really pan out, um, but I, I do think we're kind of there. I am the hard, the hard part with having confidence in this view. And I actually think the alt setup is a bit more interesting. You know, the election is sort of, we're looking at, we're pretty much a month out. You obviously have a lot of people that are using the election as kind of a selling point to decide whether or not they want to allocate. I tend to think the market is not really going to give people that, that chance to say, Okay, from here until election day, prices just aren't going to move. And then you're going to have a really easy shot at obviously Trump winning. You know, that's good for crypto. Kamala wins, that's, that's kind of bad for crypto. Um, what I, what I, what I do think is interesting also is, you know, obviously also performed pretty well into, into today for the last couple of weeks. You know, the dominant theme from people is that obviously the biggest risk for crypto is, is Kamala winning. And Kamala winning would be specifically bad for altcoins. Like, that would be the worst outcome for altcoins. And the way that altcoins at least are moving now, and obviously with polls widening in Kamala's favor, to me, I almost— I'm kind of playing around with this idea, and I'm almost like 60/40 on it from a confidence level, is that I almost think the trade might be to be longer alts, and especially these like utility alts. And to me, as I, I would express that just with crypto AI coins is you almost want to be long alts into the election. And then I'm kind of toying with the idea that if Trump wins, that's actually the trigger for majors to go vertical, right? Because if you think about the two camps that drive, you know, big price moves with majors, obviously it is these ETF flows, it is these instos, it's these big pockets of money, and they're just far more disciplined and they probably will actually wait until you get this election outcome. And it just takes so much more money to move majors. As opposed to alts, right, where you could have crypto-native capital say, hey, you know, it's decentralized AI fall, right? And I need to be allocated to the sector. And it takes so little capital to move these assets. And they might want to wait for the election outcome, but they're also watching this market every day. They're kind of perma-bullish this asset class. And if majors are kind of range-bound, and Avi, we talked about this for years, right? You know, range-bound markets for majors are great for altcoins when the environment is right. And it almost feels like that's the setup here where everyone right now is kind of hiding out majors being like, you know, I'm safe here, I'm safe in Bitcoin, I'll make more moves around the election and I'm just going to avoid alts because, you know, if Kamala wins, the story's over. It almost feels like from a positioning perspective, certain alt sectors will do well. Like, I think dispersion continues like it's been all cycle. and then the election might be the trigger, uh, for majors. But I still think majors can, you know, grind, chop up higher.

I mean, we, we've been talking on this podcast for 9 months about keep it tight, consolidate line items, like roll into the majors, get rid of your crappy positions. And so far we've been dead right. Like BTC dominance has just been up only all, like basically since December 2022. And it's— I think the, the end is near for that trade. I agree with you, Chief. I think, um, I, you know, I've been a— I've sounded like a BTC maximalist for a long time even though I'm not, but like, I, I just— it's been the trade and it's hard to pick tops on BTC dominance. But you have a really strong point. I mean, interestingly enough, Avi, you tweeted one of the wisest things I've read in a while this week. You wrote A lot of people focus on finding assets that make sense in this world. The reality is a lot more simple. Find the sector, find the best asset in that sector, and wait. And, you know, it's kind of amazing that we've got the Chief on the show this week because he picked AI, uh, he picked the best asset within AI, and that asset has just gone parabolic while the rest of the space has been ranging, that it does feel like we're going to see a few more of those, doesn't it?

Yeah, I think, I mean, 100%. And just one, one thing on that tweet, I was stepping back and just looking at the bearishness that I had held over the last few months and over the summer where I said I was cautious, cautious, cautious going into the election. And then post the 50-bit rate cut, you have to sit there and think to yourself, well, what is the market actually going to let participants do? Everyone and their mother has been saying, okay, let's wait for the election, uh, and then we can make decisions. It's kind of exactly what Chifeng was just saying. We'll wait for the election. But why would the market give you that optionality? I mean, we've sold off a reasonable amount, and altcoins took pretty massive drawdowns. From the March highs. There's an argument to be made that if Donald Trump gets elected and altcoins are up 100, 200, 300% in that scenario versus Kamala gets elected and they're down another 30, there's a pretty massive asymmetry and nobody was allocated. So then the pain trade becomes up at that point. And that's kind of what we saw, especially post the 50-bit rate cuts like that, that sort of gave the market juice. And the other thing is that equity markets push the highs and the crypto market— every market is just a microcosm of another market, right? When Bitcoin goes up, money flows to alts. Same is true with the crypto market as a whole. When equities push the highs, money flows to crypto. It flows down the risk, risk spectrum, right? So now what I think we're looking at is we're looking at a pretty good environment for this stuff. And what your first question should be is, well, where, where are people going to allocate, right? Like, what are, what are people going to push all their, push all their chips into? When the question is, hey, I just want to allocate to higher risk stuff and I want to make a general bet on the general market, they're going to allocate to BTC and then to the best sectors. And they're probably not even going to do that much research. They're going to just pick the best consensus, right? It's like the consensus horses are going to get the allocations in the beginning. So that's why I tweeted that is because this is just the market environment to put your chips on the table in the areas that you think are going to get attention if, if the market goes up.

One thing I'll also add to my, I guess, previous idea too is, you know, in this so far in this, I guess, cycle, if you want to call it, there's, I think really only been one time where you've had maybe a couple of times where you've had just like a very, very strong vacuum created by BTC and majors. Obviously, like SOL, that run was like a vacuum where just liquidity from the entire space was going into one asset. And then when BTC broke all-time highs, you know, the way that thing was trading, it was just all liquidity was moving into BTC. And so if this scenario plays out where, you know, alts, you know, they are putting in 2, 3x moves from the bottom into the election, and then all of a sudden, you know, BTC goes on the back of a Trump win, I think there's good odds that that becomes liquidity vacuum. And then, you know, obviously we've seen this in markets many times, right? Anytime alts go crazy, people are obviously sitting on crazy UPNL. And, you know, the thought of them missing out on like a parabolic Bitcoin move is enough for them to be like, all right, I'm taking profit. And, you know, I want to move back into the fastest horse. This would almost be the scenario. I think that obviously I think when people use like Max Payne, Um, but I do get the sense, I do think the market right now is obviously overweight majors and underweight alts, but the game with alts is just so much harder than it used to be, right? Because there is less money in the space. Um, and so there's just more dispersion. But if you are able to actually pick the sector correctly, you know, obviously that's kind of how you produce alpha in this environment.

I mean, you could pick, you could pick a few sectors and just pick the strongest horse in the sector. For each of them per Avi's kind of, um, you know, system that he tweeted out, his thought process or philosophy or whatever you want to call it. So we could say like for AI, it's probably Tao. I'll hand it to Tao. I mean, I have my doubts about Tao. I own a little bit because, you know, we did a show about it and I wanted to get involved, but I don't know nearly enough. I, I still think it's the strongest horse in AI. In DeFi, hard to pick anything stronger than AAVE. Uh, in DePIN, I don't know, Helium, love it, but but it always kind of disappoints. But if DePIN goes, Helium is going to be the one that goes crazy. Um, you know, I know there's, uh, some hype around gaming and a few other sectors, but I think between those three— between AAVE, Helium, and TAO, you're like, if, if that's what— if that's what's in your altcoin suitcase, you're probably okay for— the pain trade is up, right? If there's an up upwards pain trade. Now, the only pain trades I've ever seen in crypto have been down, but, um, if there is an upward pain trade, I think you're okay with those 3 in your cycle.

There's also a little bit of— there's just a little bit more nuance to that statement, which is when you're allocating to crypto, a lot of people, especially when once you get moves like this, they think to themselves, well, let me try to find the catch-up trade. And the answer almost always is you don't waste your time doing that. Just buy the thing that's going up, buy the thing that's working, and that tends to outperform. I mean, I think there's just a power law here, right? If you find a specific area that you like, invest 80% in the thing that is working and 20% moonshots. But in general, you know, you, you end up, you end up pretty sad. When you try to chase a sector, like let's say DeFi like rips and Aave is doing the best, try to chase though, like chase other things is probably worse than just buying Aave.

I think that's actually exactly— that was a thought I had when I saw this tweet and I was actually going to send it to you both where it's a lot of times like when, when an asset really does start to trend or let's say it has its like YFI type moment, I do think in this market diversification becomes a meme. You know, you want to diversify for a couple of reasons. Obviously, you might have like concentration limits or, you know, you never want to go all in. But in terms of, let's say, an alt allocation, you might say, hey, I have my majors and then, you know, you can, you can have all of your allocation in one asset. And that probably ends up being the right play a lot of times in crypto. I do think you can diversify also where, you know, you have your, your kind of main pick of like, hey, this is the fastest horse, and then maybe have some percentage in some ancillary names. Because I think when the catch-up trades actually start going crazy, that's actually a pretty good signal to get out, right? The, the work— the worst trades tend to pump the hardest at the end. And so it's, it's nice just to have a little bit of money in those just to keep you paying attention. And when they start going haywire, it's probably time to kind of ring, ring the alarms.

So let me ask you guys a question. Um, it— you know, we, we had— we caught a little preview of things going parabolic and then right back down earlier this year with the meme coin bubble. Um, for me, the top signal in memes was when, uh, you had people basically revising their targets much, much higher on absolute nonsense reasons. You know, we're starting to see a little bit of that. Like, people were like, oh, WIF is going to, you know, $100 per token because after the sphere is done—

it has a hat, Jonah.

Yeah, because it has a hat. Exactly right. So I'm like, I think that's when you generally— like, when the greed— that's how you see the greed. Is on crypto Twitter and people just start revising their targets like way too high after a huge rally. I don't know, what do you guys think? How do you pick the top, um, in one of those parabolic moves? I, I always— I suck at that. I tend to get out way too early.

I don't, I don't know if it's personally for me, it's never been about picking the, picking the pico top, and I think it's very difficult to do that. It's just about making money and trying, trying your best to choose the points at which you're allowing yourself to maximize the fact that crypto does tend to produce 10x's. And then the way that I do it is like whenever you get— I mean, I know, I know you, Chief, and you keep a list of top indicators that you refer to, um, and when a bunch of them hit, it's probably time to take a lot of profit. Um, there's a lot, there's a lot that you can learn from the past. I mean, if Katy Perry paints her nails, if it's probably a good sign to get out.

Yeah, no, I mean, I'm, I'm with, I'm with Avi on this generally. Like, it's I think it's a pure ego game to think you're going to call it perfectly. So I mean, I think there's a couple— there's like, there's a couple strategies, you know. You can just sell slowly on the way up, um, you can wait for a clear blow-off moment, and then, you know, in crypto, at least with majors, things tend to kind of distribute a little bit. Obviously, vol is a bit lower, so you have time. But yeah, I like to keep a list of both like qualitative and quantitative indicators On the quantitative side, like looking at quarterly basis is always just a good one, right? Because that just shows you the general financing rates in crypto. I think in March we peaked out. I want to say BTC hit 36% or like mid-30s, low 30s, which just in this environment with how I guess how many players are now kind of plugged in or have infrastructure to take advantage of that basis, you know, people paying 30% a year to long Bitcoin, like it's kind of hard to justify that. Um, you know, again, like funding rates as well. You can look at funding rates kind of across, you know, obviously Binance, a bit more sophisticated players. Uh, you look at places like Bybit, the kind of venues of more retail, uh, traders, look at divergences there. Um, obviously like, you know, big vol spikes, uh, especially when call skew goes haywire. you know, that's, that's a good, a good area.

Any like big volume blowups from the qualitative side to like, you know, MVRVZ before you get to qualitative MVRVZ, but that's more for like mega, like the, the big cycle stuff.

Yeah. Yeah. Well, like easy, you know, quality on the qualitative side, honestly, without fail, you know, I don't know how social people in crypto are, but if you're, you know, a semi-social person, you know, people from the outside world will be reaching out to you asking, you know, what coins to buy. Like I had, there were two notable texts that I received. I actually put them on Twitter. And if you put them on a chart, they are within like, I think, 3 to 5 days at the top. I got one from this girl I know from New York. She said, hey, are you in crypto? Still in crypto? I said yes. And she says, hey, what coins do I buy? What's hot right now? I don't respond. I leave her on read. She follows up. Again asking what coins to buy with exclamation marks. Obvious top signal. I get a text from a friend who I haven't spoken to in years. He says, uh, hey, have you been trading Solana meme coins lately? Let me know if you have any picks. And then says, hope you've been good, by the way, right? The gall of this guy to follow it up, follow up. I hate that you've been trading a lot of meme coins, but I hope you've been good. Um, you know, celebrities coming in, obviously the celeb coin meta was, was kind of a clear picture, but Anytime you start to see just these like levels of grift and greed, you know, go up, it's never a bad time just to take some profit.

Okay, so now that we have the Chiefing's top indicators, everybody go follow @ChiefingZha on Twitter to try and see when people start texting him all sorts of FOMO craziness. But now that we've covered picking tops, let's talk about election night. Are you going to be like staying up all night, Chief, to like— if it looks like Trump's going to win, are you just going to be hoovering Bitcoin, or like, is this not something that you can actively trade? You kind of have to be in or out ahead of it.

So funny enough, uh, this actually came from a friend. This isn't an original idea. You know, you likely see another red mirage on election night, right? Because so many of the mail-in ballots, um, you know, that are going to go— those are going to go blue. Those are going to be counted obviously during nighttime, uh, Eastern time.

Yeah.

And so you may have the big media, uh, houses kind of calling for a big Trump victory just because a lot of the early voting is going to skew in his favor. So what's interesting is if you do have this red mirage, you probably get this kind of euphoric moment in crypto where people are like, all right, we have confidence Trump is going to win, you know, slide the leverage bar to the right, you know, let's go all in. Um, that effect might be negated actually a little bit just because now you have, you know, Polymarket is such a deep market, and you have venues for smart money, um, to place bets. And they might be like, hey, we obviously know that the early indications are going to be in Trump's favor. Um, you know, if you got that, if you got that, I would actually say that's like a tactical, a tactical sell, um, for, you know, your trading portfolio, not your long-term positions. Um, yeah, I haven't really thought about it too much in terms of what I would, what I would do. It really depends kind of how we get there. So, you know, I guess in the instance that I described, let's say alts do really, really well into the election, I would probably start looking to rotate some of those over into majors, maybe like equal weight, you know, BTC, ETH, SOL. And then, again, it really depends on what happens going in. If markets are going up and Trump wins, I'm probably not really doing a whole lot just because the market, I think, probably front ran it. And I do think the market is going to be horny for a Trump victory and is going to be looking for kind of any sign. Um, and I don't imagine there's going to be any new data between now and election night. I think, and I think polls probably fluctuate. I think Harris is hopefully probably topping out around here. We'll kind of see. I still think Trump wins. Um, So yeah, it kind of depends on how we get there. Obviously, if Harris, uh, does win, I think, uh, I would, I would look to hedge, uh, the portfolio with, with shorts. You know, right now, off the top of my head, I'd say probably ETH and SOL, just because you need the most liquid kind of alt representations. But I do think it's going to be a volatile time, um, and I do, I, I do get the sense it's going to chop a lot of people up. So I'm, I'm kind of looking to see what happens as we go in. And it might just make sense just to increase your, like, you know, your cash position going in, especially things have done well, and then maybe even give it some time post-election to see. But if things are quite muted and Trump does win, you know, I think BTC does go— I think BTC goes parabolic. I think it'd be hard for it not to.

I agree with you. I think it's going to be hard for BTC to go parabolic on election night. Even if Trump does win. Like, I think that you could see— like, let's say you go into election night and it's trading, you know, kind of, I don't know, where it is now, 63.5, right? So let's just say it's there on election night. I could see it trading 70 or 75 on a Trump win. Yeah, I think that's still like— I don't, I don't really see it going too far above that night of And I still think that's a screaming, screaming buy. So coming from somebody who does not like to trade, like event trade, or especially pre-planned event trading, like I think it's a fool's game. I just don't think that the, the night of the election when markets are shut, like trad fi markets are shut, so your, your trad derivatives markets are closed, your trad guys who are going to be buying this the next day are going to be sitting at home watching the election with their families. Like, I think there's going to be an opportunity for us crypto natives to like lift, lift every, every token that's out there.

You know, just, just, just talk— just talking out loud for a second because you said that the markets are closed. There's an argument to be made that Bitcoin will be the election trade. And so on the night of a Trump win, you just get everyone slamming BTC. And even if there is a, even, even if Trump does win, it just overcorrects to the upside because people, once the market opens, will sell out some of their Bitcoin, which was the trade at the moment, the liquidity at the moment. They sell out some and then that's probably a dip to buy. If you get it, just, just talking out loud.

It does feel like crypto. I don't, I have, I haven't really been doing much of it trading. For a while, but it felt like at least when crypto was like, you know, when everyone was paying attention to CPI, at least like 30, 15 minutes before, like price just wouldn't really move, right? Like everyone is just kind of waiting for it. So I, I, I could almost imagine on election night, again assuming no new information, um, you know, BTC is just like, it's just not really moving much and, and people are waiting for, for any bit of news. You know, I'm not, I'm not really like an election expert, so I don't know what, I don't know what, what the earliest point that we might have market-moving news, but I do think at some point, I think, I think BTC is just, it's just going to keep going up for a while. It'll be like when Elon, you know, announced his Bitcoin buys. Like, we, that day we had so many short squeezes, like, perp basis was roofed, and, you know, a lot of times you'd see that and be like, oh, I can't really buy here, it's too juiced, but it just, it just kept going. It's just one of those moments where you're just, just get long, walk away, like it's going higher. Like, you don't need to look at your charts for a while.

Chief, what tools do you use to monitor all these indicators that, uh, keep you plugged in and with your finger on the pulse of the majors?

I guess, I mean, Avi's mentioned it. I mean, Velo's definitely the best one. I think it's honestly the most, most all-encompassing. Um, obviously Twitter is a great tool. I've been using— I've been playing around with Kaido. Uh, recently. Um, it's just good, a good way to kind of get like these high-level summaries on— it's kind of sentiment reading, but you're able to get information like tweets about a project pretty easily. Um, I think that's really it. I mean, Coin Analyze has some good data. Like, I know, I think today a lot of people were posting about like aggregate, uh, altcoin OI. I don't think Velo has that yet. Velo, if you guys are listening, please add that. But Yeah, Velo honestly has most things you need.

Okay, that's super helpful. Just, you know, here at the 1000x Podcast, we're all about process.

So aggregate altcoin ROI is actually an interesting one that I haven't looked at in a while because alts have been so dead. But how's it— how's it looking right now?

So this is reaching multi-month highs. So I think we peaked this morning at around $13 billion, which was the high close to the high that we reached in late July. And then adjusted for market cap. Yeah. I mean, so we read it. It's not, it's not that high, but it's kind of at, it's almost at the resistance point. If you assume that we're still range-bound, which is, which is kind of the question, you know, at large here that I think everyone's trying to answer, you know, it's obviously gone up. I think we added like, actually, I don't know the exact number off the top of my head. We added, we added a good bit, but it's not, at least for this cycle on an aggregate level, on a global level like that, that insane where it's like super frothy. But, you know, a good bit has been added.

Yeah. I mean, look, that's, that's one of the things that I think is hardest about this particular moment in time is figuring out whether this is a sustainable move or not, and that if it does become a sustainable move, The psychology required to go from a ranging market to a trending market is where most people just completely fuck up. Like, when you go from, okay, I'm gonna start taking my 20% wins and offloading them, it's very hard to shake that. Because I think probably every single person that actively trades or invests at some point has round-tripped P&L, and then probably even gone negative. And that's just a shit feeling. Everybody, everybody hates to feel that. So if you're, if you're listening out there, love to hear some of your tricks if you have any, just like psychological tricks. But one of mine is just to, to always sell a little bit or buy a little bit. And I've talked about this, I've talked about this before. Like if you're, if your position's going up, you don't have to make binary decisions. You can sell 10%, you can sell 5%, see how, see how it feels. Um, but you kind of have to trick your brain into adjusting to the market environment. I don't know how, how you do that, but be kind of, kind of interesting to hear.

Honestly, I just try to have— I just try to go top-down, and I try to have a view. And, uh, I, I do, I do hold the view, or at least I'm allocating capital right now on the view that we did we did just shift environments. Um, obviously talking with, with a, you know, decent amount of margin of error. Like, to me, like, Bitcoin at $61K is still, you know, to me that we're still in an uptrend. Um, if you want, you can, you can wait right until a clean break of $65K. Um, but it also, it really depends on your time frame, actually. It really depends on how your you know, how you're kind of viewing your portfolio, right? Like, I like to have my long-term positions that I'm not really looking to touch. Like, these are more like kind of macro 3 to 6 months, maybe 3 to— yeah, 3 to 6 month holds. And then a more like active, active trading bucket. And then that active bucket, yeah, I'm kind of the same where if, if there's profit and I'm feeling kind of nervous, like, I'll just, I'll just take it, right? Because in this game, you really just want to survive. There's something new happening like every every week, every day, right? Sui Tao, all these things are up like, they're up like 3 times from the lows, right? Um, so I think it just depends on how you're, how you're kind of allocating capital. And then if you do think you're in a range-bound environment, yeah, I would just be, I would just sell rips, buy dips. I tend to not really be active in those environments because they're just kind of boring for me. Um, and tend to like, you know, chopping, choppy environments are not really where I thrive. Um, but I do think with the broader market, I do think we turn to LEAF. I think you have to be a little bit patient here. Um, and so to me, like, right now it's just separated out into, like, you know, kind of conviction levels. So things I have conviction, I'm just— I'm, I'm kind of sitting, letting them ride. Things that are a bit more speculative that might be kind of more technical trades, like, I, I, like, took profit on, on some alt positions, uh, this morning, actually, when I saw that, that OI, uh, move. It could go higher. It's fine. Like, you know, we had a big move off the bottom. I'm not— I'm not too concerned with it. But to me, having that extra cash buffer also lets me like buy the high conviction names should we get a dip.

Should we? Obviously your highest conviction name right now is TAO. Very few people in the market have been as long and as vocal as you on that one. Should we, you know, take— I guess we're nearing the sort of third act of this podcast here. Should we take some time to debate that and try to understand the thesis a little bit because I think it's, it's an important asset for the space right now and it's also controversial and we need to like maybe try to poke some holes in it to try and understand what's going on because it is the first major alt, like kind of major cap alt breakout that isn't just another alt L1 trade. Um, it's like the first real alt to to do something in a while. Um, I guess you kind of went through your thesis in depth on the previous podcast that you were on with us, but like, I, I guess, could you recap it, like the elevator pitch for it, and then tell us why, like, what are the developments, what are the catalysts that you expect to keep driving this uptrend?

Yeah, for sure. So I mean, the Also, within the high-level thesis, there's like two components. There's like a fundamental component, and then there's like a more, I guess, like markets structural component. And I think, I think the latter is playing out, and the latter is actually always going to be more important. Like, this is obviously a trading podcast, like, you know, price always, always drives narrative. And I think there are structural forces that have obviously been supporting the price. Um, yeah, but on the fundamental side, right, the whole, the whole notion for this this protocol is that it's an incentive system, this incentive game to drive the kind of creation of better open source AI models that hopefully over time can obviously compete with the likes of, you know, OpenAI or ChatGPT, Claude. I guess Llama is technically open source, but, you know, Llama, Mistral, all those. And I think more recently where a lot of the excitement has been generated is that the incentive system is working. You know, I've tweeted about it a good bit, but the quality of teams building subnets and just generally building dev tooling in the ecosystem is noticeably higher, right? This time last year, I think there were 2 or 4 subnets. I think we're pushing into the 50s now. Not all are great. Actually, most are bad, but you can just see the quality increasing. And as the protocol is designed to do, the kind of shittier subnets are getting weeded out and losing incentives, and the more productive subnets are gaining in kind of market share, and they're getting more control of, of TAO itself. And I do think where the reason sort of why this is so controversial is, you know, an incentive system on its own is like, it is this meta concept. Right. But I think this is actually what blockchains have always sort of been, been, been good for. Right. You have, you know, what a blockchain really does is it says, you know, because of these strong cryptographic guarantees, we can guarantee you property rights. And everyone now playing in this game can have full faith that these property rights will stick and the rules of the game are going to be hard to change. And then with that belief, the way that people operate is just different, right? So when the incentive is strong, you can get people to operate in a certain way. For some desired outcome. And the desired outcome of the system is just better AI models, which I think we can all agree would be better for the world if you kind of had this open source community, um, you know, building alternatives to the OpenAIs of the world. And my, my, my general take also on decentralized AI is regardless of if you think it can compete with the likes of, you know, OpenAI and Microsoft, it's going to get built. Regardless. Like, the, the, the— what's the phrase? You know, Pandora's box is kind of already open. We're going to create the system. It's for sure, it's going to rival the centralized world in some respects, probably fail amongst a lot of vectors, but it's going to be an alternative. In the same way, the same way DeFi is an alternative to traditional finance, it's obviously worse off in a lot of ways. You know, this decentralized AI ecosystem is going to exist, and people will— are going to keep building there, and they'll keep gravitating towards it purely because it exists.

So first of all, that's a big if, right? Like, if, uh, decentralized incentives can build better models than centralized ones, or even like quasi-centralized open-source ones like Llama, that's— we don't know that. So it's kind of a VC bet that that's going to happen. But if it does happen, obviously ecosystems like BitTensor will be enormous. There's some delta you assign to that. Maybe it's 50/50, maybe it's lower, but like The beauty of crypto is that unlike traditional, sort of like trad VC, where you can't trade in and out of your startup equity as hype ebbs and flows, you know, crypto does give you these tremendous 10 to 100xers between, you know, when you put the trade on and, you know, 5 years down the road when you know whether your thesis is right or not. So I totally buy your idea that you know, to use commodities speak, the curve is in contango. The, the price of the future for BitTensor is much higher than the present because of that, that idea that decentralized models might matter. Um, and in the meantime, you can sort of trade that volatility and, and eke out a pretty, you know, substantial profit, especially if you're convicted. But one thing I wanted to bring up to you, um, I read a really fascinating article in The Economist yesterday. Uh, the, the latest one is all about AI and the, you know, microchip ecosystem behind it. You know, super interested in that and studying it. There was an article about how China can't access a lot of the GPU compute that it needs to build AI models that compete with Llama, Gemini, um, ChatGPT, all this other stuff. And so they're building these sort of like skinny, uh, you know, targeted models where, you know, you ask the model one question and it'll go to a specific LLM designated for answering that type of question. Just basically like China's finding ways around the chip sanctions because they can't access NVIDIA's latest and greatest. Meanwhile, I was thinking there are probably a lot of countries that, that have national projects like that or want, you know, national champions that can't access the, the actual, you know, silicon they need. Maybe decentralized AI will provide it for them. So I kind of thought of BitTensor in the context of like geopolitical use cases, similar to how Bitcoin, you know, perforates these sort of hemispheres of global trade. because it's this neutral arbiter, um, that everybody can sort of agree to use. So I, I could totally see, you know, maybe a, a third use case for BitTensor aside from it like dethroning Llama or OpenAI's latest model. It could just be, it could just be like a thriving ecosystem that helps countries with difficulty accessing silicon to still get good model, uh, well-trained models. Into their, you know, day-to-day use.

Yeah, I don't know if it's a way necessarily to source. I mean, I guess it can be a way for these countries to source compute, just right, because the miners themselves theoretically are like, they're expending computing resources to, you know, run these models. So yeah, like I think it plays into this, any notion of kind of geographic unfettered access. To AI models, you know, BitTensor plays a role. And I guess a couple, there's one point, and I think we can move over to the more markets-oriented, you know, case of the thesis. I think, I forget, there's one, I think it's Wambo. I forgot what subnet they're working on. I think maybe it's called Dippy, but, you know, they had a miner produce LLM outputs that were scoring, you know, higher on this like EQ. I guess, standardized EQ scale. Uh, it was like, it was beating, I think, like Llama 3.5, right? And these are just like indie developers. And I don't think you can, I think it'd be probably disingenuous to assume that you're going to have these, you know, random open source AI engineers in their mom's basement that are creating better, better models than, you know, OpenAI. But again, I think it's that, I think it's the fact that alternative will always exist. And creating such a bounty for it. I mean, you can think of it too, right? Like within, within AI, like startups, like there's no real chance for someone to compete with, with OpenAI, right? Just because of the scale they're afforded. And so BitTensor does, it is pretty much kind of funding that or covering that resource cost for a lot of developers, right? It makes it much more easier for them to, to build these models. It covers a lot of their kind of almost go-to-market, right? And that's how you're seeing like startups, you know, like Inference Labs, right? They like launch a subnet on BitTensor as a way to kind of bootstrap, you know, their companies and bootstrap their growth. But I think they'll keep going. But I guess also transitioning over to the more market side of this. And again, probably what is happening now and why obviously the narrative is kind of following price, right? Retail doesn't really have many ways to get exposure to AI. Like sure, there are a number of stocks, obviously Nvidia, Microsoft, some smaller names. But, you know, that under $1 billion kind of valuation is really, really hard for the, the more risk-on or, you know, people who want to be visionary investors. And crypto obviously offers, you know, offers them that path. And within that, as you kind of look at sort of what, what's like what's available, you know, BitTensor is really the only one that like has this big, big picture vision of building something that, you know, is for the greater good and building something that can be long lasting. And it really actually is forming into kind of a true, you know, decentralized community. I don't think many projects both within that sector and within the space can sort of say that, right? So it's easy to kind of dream big about this. And also pointing to what you said, right? Like crypto markets tend to almost like fully price fully price in, you know, the, like the full potential of a project in a really short amount of time, right? Like crypto markets, they go from like extreme, like euphoric and being like, this is the future, this is going to work. You know, BitTensor should be valued the same as OpenAI, which obviously right now it shouldn't be. And then they obviously swing back to kind of that extreme. So you're playing a bit on the inefficiency of the crypto market. With this thesis, even if you do, let's say you don't even think the fundamental case makes any sense, right? You're like, nah, this token's worthless, right? There's no incentive if there's no, there's no moneyness or value to a token, even though that's obviously something that's going to be worked on. You know, but you can still be like left curve, you know, AI, AI go up, let me long, you know, kind of the best coin in the market. And there was a, there was a good, a couple others, there was some good kind of tweets. this is actually posted at like, you know, high 3s, you know, the stake rate of this is obviously super high. Um, you know, it is, you're not really locked, but you can just kind of feel with it with, with, with Tao right now, it is just kind of going through a bit of a supply squeeze, right? The first run we went from like 50 to 800 and then, you know, we, we kind of ranged from 200 to 300 for, I don't know, 4 to 5 months, right? So the cost basis of all the new people that got in is, is just much higher than it was before. And the levels that they're kind of looking at to take profit are obviously much higher than the previous set of holders. Um, and from also what I understand, there was like a big fund that sold a lot down because they were raising a new fund and they want to show DPI and they're obviously kind of out of tokens at this point. Um, there also were a couple of good tweets. I mean, I mentioned the, uh, the meetup in Singapore, it just felt like strong community feel, you know, grassroots, no frills, like that, that I think is shining through. And there's like a good tweet. I don't know if this is really true, but it says all my AI smartest friends at SF are working on BitTensor during the weekends. Quote, Paradigm-backed founder and DAI who will remain nameless, probably nothing. There's actually truth to this. Like I've had a number of friends in the Valley who were just tinkering, running miners on BitTensor. One is actually gearing up to launch a subnet. And I think it was Chris Dixon who like, you know, when he was saying why he got interested in crypto early, he was like, just follow, follow what these developers are doing, you know, when they're off their thing jobs and they're at home or over the weekend, like look at what they're playing around with, right? A lot of these things kind of start off as a, as a toy that you don't really understand. But that's kind of the beauty of like these decentralized networks is that they are networks at the end of the day, right? There is this big social layer and they can evolve, you know, based on what the community wants. So to me, I think this repricing is just one, obviously like this market, you know, driven thing of like, hey, we want to get exposure to Crypto AI. But then the other part of it is this fundamental case, but also the social layer of the community that's being built around it. People like, all right, there's some really, really smart people here and tackling some very, very hard problems. And you're seeing early signs of it actually working. And that, you know, in crypto and such a dearth of innovation is obviously super exciting. And I think you're seeing that with ours.

Just to, just to add to that little bit right there in terms of fulfilling, fulfilling expectations, it's also like where the expectations are. I just saw the news that OpenAI leadership is kind of falling apart right now. And it's just a reminder that yes, crypto is new, but AI is also new. And we're not exactly sure how anything is going to pan out. We don't know what the upper limit for either of these two sectors are. And so that makes it even more fun to bet on these things going to $100 billion and who knows, who knows where, because we don't even know what the right model is yet. So there's no way to say, oh, Tao's the wrong model. We just don't even know.

And even, even OpenAI at this $150 billion round, which apparently is like demand is through the roof. I think $250 mil is like the minimum check. Right? Like people on the surface might be, oh, you know, they're making this much in monthly revenue, but, you know, theoretically inference will probably replace search, will probably replace search. You know, what's Google worth? Like $150 billion in hindsight might turn out to be, you know, really, really low. Right. And so, you know, those valuation caps go up, obviously crypto kind of will follow. I think honestly in crypto, I think the magic number on a circulating basis is $20 billion on a circulating basis. Is usually, it's very, very hard to break. Very few projects break that. I think SUI is actually coming up on that. So kind of interested to see what happens with that. But I think TAO now is like 4 billion on a circulating basis. You can look at TAO maybe on a 1-year forward because I do think the inflation rate obviously is high until the halving next year. So call it like 8 billion. I still think you have a safe not a safe, because you can never say that, but, you know, 2.5 to 3x upside would not surprise me.

You know, before Google, there were a few different, um, search engines out there. There's like AltaVista, Lycos, uh, Yahoo. And I remember, like, Lycos was great for a while and everyone used it, and then that, you know, air quotes, model kind of became really bad relative to the others, and then people switched to AltaVista, and then eventually Google showed up and decimated all of them. Like, It doesn't take much for OpenAI to fall apart, right? Like, all the big technologists have left. There's like internal strife. We're in the midst of the bubble. We're not quite at the SBF goes to prison moment. Chief, uh, you recommended CoreCell, um, as, as having the best UI on, uh, on BitTensor, and I tried it out and it was friggin amazing. So I could easily see a world where, you know, the chatbots of BitTensor suddenly one day become way better than centralized versions for this, you know, it's not the most probable world, but it's a world, right? It's possible. And, you know, in that world, like OpenAI goes to zero, and all that value goes to BitTensor. It's possible, right? So that it's still basically my point is, it's still very much an open season on dominating that market share, much like it was OpenSea in search engine and search.

I think, I think that just the big picture, right? It's just super, it's super— actually, I hate even saying this, but it is early, obviously, in this network's kind of evolution. Not saying from like a price perspective, but, you know, from where the community is headed. And I think people also are getting excited about like some network upgrades, and those are probably like catalysts that people are factoring into their investment decisions. Like the big one is, is the Tao, dynamic Tao. So like the, the kind of way that emissions are going to be calculated are going to be a more market, markets-based system. And you will be able to use Tao to effectively, you know, speculate on which models are better, right? So imagine a world in the same way where, you know, you need SOL to speculate on meme coins. You will need now TAO to speculate on models, right? And it's a pretty cool world if you're right and you identify a model early on, you know, you'll benefit from that price appreciation. So that's a good one. They are moving towards some EVM support. I don't know what that's going to look like past just having TAO, you know, available on the EVM within DeFi. I think there is some sort of smart contract component with building apps, but I'm not too sure. I know like DCG, I think they're going to be announcing some sort of like financing product somewhat soon. Also, I mean, this is a bit more on like the shitpost angle, right? The more degen side of me. But I mean, Barry Silbert is shilling this thing like his life depends on it. Like he is— oh my God, he is— he is pretty much comparing this thing to the early days of Bitcoin, right? And that's the thing with this asset too, is it's the same supply schedule as Bitcoin. Like I mentioned about the whole supply squeeze, like this, this thing just feels hoarded right now, right? Like you kind of think these emissions are so high, yet prices keep staying up here. Like, you know, the emissions are high, but a lot of them are going to, you know, into Barry's hands, into Polychain's hands, like the big stakers who just really have no interest in selling. So assuming being like, oh, you know, the emission rate is really, really high, you need to do the work of how much of those emissions are actually going into hands that are just trying to sell. And there's definitely some, right? Like the News Researchers of the world, these kind of indie subnet owners, they're for sure selling. But I think, you know, realistically, that is probably on the tune of like $20-30 million a month. And if you look at volumes, I promise you much more than that was bought like in the last week. So I don't think emissions are as scary as people make them out to be. It's the same thing as the early days of Bitcoin, right? Like tops and bottoms were kind of dictated by miners. Supply side, when it gets hoarded, you know, when they decide to unload, obviously that is kind of when it tops. But I just don't really see how the largest holders are looking to take profit anywhere near this level.

Yeah, I mean, but they, they have a level, right? Like Silbert and Paradigm have LPs. The LPs aren't just going to sit, sit on their hands and say nothing if this thing doubles or triples from here, right? So there is a—

Barry doesn't have LPs.

Really?

I assumed that he was running some fund. I didn't realize this was a PA trade for him.

It's just accumulating. They put out— they actually put out a pretty good research report on BitTensor, which is solid. And VC funds, I think one thing that also drives them is that they can just accumulate for a very long time and just hold until they think that the project isn't working. I mean, you saw that with Maker from a lot of the big VCs, because they literally held it for like half a decade until they decided it wasn't, it just wasn't working anymore. And then they, and then they started offloading it. I mean, there's a, these guys can hold on and not sell for a very long time if need be. I think that, you know, if this does work or if it doesn't just, if it's not clear that it's dying, which it kind of was a little bit for Maker that it just was being outcompeted by everything else. These guys just basically don't sell. Until they're, until they want the fund down, which is telegraphed most of the time. That was a good shill fest. Maybe, maybe we can hit, maybe we can hit 1,000 now once we, once we release this.

I mean, luckily nothing we shill on here is financial advice. It's all just hypothetical, uh, you know, theorizing.

Yeah, of course. And as, as, as we always say, if you listen to anything that is said on this podcast, you will inevitably lose all of your money and end up on the street. So please don't.

Yeah, Tao just rallied a bunch. Don't buy it off Chief. Sell it.

Or don't.

No, I think it's a really interesting thesis and decentralized AI is such a cool concept. It could totally work. And imagine if it did. Oh my God.

Jody, you just got to believe in something.

I believe in something.

I believe in the green lion. Chasing the green lion.

Alright boys, this was a pleasure as always.

Pleasure. Thanks for coming on, Chief. Love having you. Great call.

Of course.

Great call.