Why There Wont Be An Alt Season This Cycle | 1000x

I've been pounding the table pretty early, since pretty early, that there's going to be no alt season this time, that there, there will be sector-based seasons. Why? There's just too many coins. There's too many coins. There's just not enough capital for an alt season to happen.

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Back to another 1000X podcast in the midst of market meltdown. Joe and I have come together to give you guys the take that everything's going to be okay, that you shouldn't worry so much. You should go outside, touch some grass. You know, I, I tweeted that there's a lot of dispersion in market opinion recently, and that's unequivocally bullish on the market. And then I followed it up with, I'm looking for entry points this weekend. Now what ended up happening is that Sunday night we imploded. And what tends to happen is that if you get an implosion on a weekend or on a Sunday, specifically a Sunday, it comes to a climax on Monday because everyone's adjusting to the new information and they all get out. I think that's what just happened. Uh, Jonah, do you agree with me? Are you unequivocally bullish on this market?

Yeah, um, I am. I think it's notable that Bitcoin— well, first, first we can go through like your tweet. Your tweet was brilliant. I, I couldn't have articulated it better myself. I, I tend to get scared when everybody's consensus bearish or bullish, but scared when people are consensus bullish, greedy when people are consensus bearish. I like the Warren Buffett quote about that. And yeah, there's not a lot of consensus right now. You have some really prominent, respectable people in, in the crypto trading community calling, you know, for cycle peak having already happened, and others like you and me saying, you know, there's much more to come. There's this big debate about which inning we're in. Frankly, who cares about innings? It's about price. But, you know, some people are saying we're in the 8th or 9th inning of the ballgame. Others are saying we're in the 4th or the 5th in terms of this bull market. Um, so yeah, I think when everybody is just like all over the place and the fundamentals of our asset class are still really strong, and you get— you know, we've talked about fundamental sell-offs and technical sell-offs— sort of a technical sell-off I think that's a really good entry point. Like, we had, we had a crazy technical sell-off last year around like midsummer. I think it was August. I forget why off the top of my head, but that was a big technical sell-off related to some like rate hike or liquidity thing that was completely exogenous to crypto. That was, that was the buying opportunity of the year. And, uh, I think, you know, I wouldn't call this a massive buying opportunity because it's already bounced back and rebounded most of what we, you know, lost overnight. Traded down to 97,500 in Bitcoin, now we're back up to 101,500. So, you know, it's not a screaming buy. I think you're just supposed to look at the chart and say the fact that Bitcoin is still right smack in the middle of the recent range, um, despite all this fear—

NASDAQ went down 3.5%.

NVIDIA down 17, 18% too. Yeah.

And the, the NVIDIA sell-off to me was really funny because everyone's describing it to Deepseek, and I think that's right. And what I spent today doing is trying to figure out if I was missing anything, because to me, Deepseek doesn't seem like it should send the markets tumbling. This reminds me of the age-old blockchain debate that we've actually had on this podcast. The debate is, well, if blockchains reduce fees tremendously and they become extremely scalable, then how could they ever have any real value? Because they're not going to generate any meaningful revenue. You know, if fees come down, then you need usage to go up. And the argument is that it's like a highway. You can widen the lanes of a highway, but what you're really doing is you're just allowing more people to drive on it. Like, there's, there's still latent demand for all this. And this is how I feel about AI. Like, even if, you know, and just to give everyone a background, why are people freaking out about Deepseek? It's because they've proved that you could run these models on far less compute power than we originally believed.

They claim, they haven't proven.

Like, they claim Now, the, the— why are people worried? Well, if you can run models with less compute power, then you need less chips. If you assume that demand stays the same, you need less data centers, which, you know, Meta has invested in a data center the size of Manhattan. Everyone and their mother is building out data centers. Why? Because they think that there's going to be a massive increase in demand. And I don't think that there's finite demand for AI.

If it—

if it's supply and demand, if you take something like an orange and you cut the price in half, more people are going to buy it. If you take something like ChatGPT and it becomes cheaper to run, more people are going to sign up for it. And so I don't think we've reached the point where we've increased scalability for AI so much that demand is not going to be able to get us back to where we were. Future, if anything, this makes AI more attractive and more usable across a variety of different applications. Things that were cost prohibitive before are now economic, and so they're, they're going to come online. Right. And so I think that this is a complete misunderstanding of what's actually happening. And you can say, well, maybe what this means is that all of these companies that we thought had massive advantages in AI are not going to be able to compete. But none of these companies other than OpenAI had a moat anyway because it's open source. I mean, Facebook's AI Llama is open source. Uh, Deepseek is open source. So really you just can integrate it if you want. Um, you know, hopefully there are no Chinese spy bugs in it, but open source it. This is, this is an overreaction and to me represents a great buying opportunity, which is why I bought today. Dipped my feet, you know, I, I used some cash that I had on the side to go, to go buy, uh, equities specifically. You know, I'm already sort of full, full crypto exposure. Um, but yeah, I mean, I just don't think that this is a real concern.

Yeah, I don't think so either. I mean, obviously there's the, the bearish argument, the economically bearish argument that stock market gurus are talking about right now is the fact that there's just been this, you know, centibillion-dollar gold rush spend on AI buildout, AI infrastructure, like you alluded to. And maybe that's going to stop, maybe, or slow down. And yeah, that's short-term bearish NVIDIA because if Deepseek is real, which I doubt it is, by the way, um, side note.

What do you mean you doubt it is? People are using it.

The CEO of Scale AI came out and said that it was trained using, you know, a cluster of NVIDIA H100s that they didn't report, right? So it may be a little bit lighter than— or maybe it may be a little bit heavier than they're purporting, uh, it is. But my point, my main point is that let's assume that Deepsea—

I'm sorry, let me just get this straight. Are you saying that a Chinese-based company might have lied?

Yes. I mean, I'm, I'm not saying it, I'm just quoting like a major player in the AI space. Scale AI is like a Data—

there's never— I don't think there have ever been any instances of fraud in the Chinese market, or, or in markets of any kind.

Um, market— markets are fraud-free. Yeah, I agree. So it— I— it's like, let's just assume that they're telling the truth, which is already a stretch. Um, maybe, maybe it means a little bit less data center spend in the near term, which is bad for Nvidia and anybody— any other provider of data centers. Maybe like some private equity, uh, group within Blackstone is like, oh dang, we're gonna have less demand for data centers. Um, but to me it's bullish for everything else in the S&P 500. Like, if you can just create O3-level AI at the edge with like a couple of Mac Studios stacked on top of one another, um, that opens up a whole bunch of new applications. If AI becomes cheaper for for the masses. There's going to be more demand. Like you said, prices come down but volume goes up. Um, ultimately, like, this should be massively bullish equities. And as far as crypto is concerned, Bitcoin is just correlated with the NASDAQ at the moment, and it's kind of outperforming the NASDAQ right now. It's only down, uh, 1%, whereas the NASDAQ is down 3%, like you said. So, you know, Bitcoin is showing relative strength. Uh, which tells you something. And furthermore, you know, as far as like AI coins and some of the altcoin— altcoins that tanked on this news, I think that cheaper AI is good for crypto. What's, what's bad for— what's bad for AI coins right now is that there's just too many coins, including too many AI coins. So there's a lot of dilution out there, and investors don't know which one to— which token to buy because there are too many choices. But what's good for AI coins is the fact that the argument against, you know, the intersection of AI and crypto and its future is that crypto isn't a fast enough platform to have access to this like world-beating AI, uh, that, that's done inside of these centralized companies. And if Deepseek is real, then anyone can spin up a super powerful decentralized, uh, artificially intelligent application slap a token on it, give it some utility, and then before long, um, you know, off to the races with what could potentially be a really useful product.

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I was thinking this earlier. The market has so clearly become more efficient and smarter than it was even 2 years ago. I mean, even last year. For the longest time, if you ever had an announcement about a specific sector in the traditional world, then the crypto coins would kind of run for no reason. So like, I remember when OpenAI, like 2 years ago, when OpenAI would launch a new model, or a year ago, when OpenAI would launch a new model, all the AI coins would rally off this, right? Like Render, or or Nvidia would announce earnings. I think that worked even 6 months ago, and AI coins would rally. And then you get this like insane— in theory, insane development and breakthrough in AI, and nothing happens. Um, that's like— that's— the market has gotten smarter because the reality is that there was no reason for these things to rally. Uh, now there is one standout here, which is that something called Alchemy Pay went up like 90% because it's a quote-unquote Chinese coin. And this thing called Conflux also went up 10%, outperforming the market. But I mean, there was no broad-based reaction from AI coins, which I think, you know, it brings me to my next point here, which is that the market is really genuinely rewarding research. And it's— there's a tremendous amount of dispersion. One of the biggest discussions on CT over the last month, 2 months, has been alt season. It's like, when does alt season happen? And first, let's define alt season. Alt season is when alts across the board, doesn't matter what they are or what they do, they go up because people are trying to get more risk on. And that happened for like a week this year, but it didn't really happen in the way that people expected it to, right? Like, we're kind of designed over the last few cycles to expect alt season to be this period of a month where— 3 weeks where everything 5x's. Alt season this time was more like things go up and outperform by 15 to 30%, right? Like Litecoin going from $82 to $120, I mean, 50%, right? But there was no— it didn't go from $80 to $400 like it has in previous alt cycles. And so that, you know, it brings me to a question posed here, saying, do you think that that will happen again, or do you think that people just have to start actually buying buying the good stuff?

It's a great question. Um, so I'm gonna— I've been pounding the table pretty early, since pretty early, that there's going to be no alt season this time, that there, there will be sector-based seasons. You know, we did see a dino season, like XRP and HBAR and some of these random, like, 2017, 2013 coins went, went ballistic. Um, I, I do fully expect an AI altcoin season. I think that that mania will hit crypto later this year. I think the catalyst will be agents crossing the chasm into mainstream usage and token-related activities and games and gambling inside of these agents, or terminals related to these agents that you access with tokens. So I think that tokenomics can definitely, can definitely translate into an AI altcoin season. Um, but you know, I, I don't know if I get to take credit for this, but I, when I started posting about there not being an alt season this year, this time, this cycle, I think I was the only one. So you know, that seems to be consensus now, and I feel like I was early to that idea. Um, Why? There's just too many coins. There's too many coins. There are— like we mentioned it earlier on the podcast, it's, it's bewildering. How can everything go up when— I think Brian Armstrong tweeted that Coinbase's new whitelist policy for which tokens they put on their exchange is that it can't be a whitelist anymore because there are a million tokens a week getting created. So it's, it's going to switch from whitelist to blacklist, where they just like identify with AI things that violate their terms and terms of use, and they're just going to block those and let everything else through the floodgates. And so when, when you're in that world, there's just not enough capital for an alt season to happen. And we did kind of, to your point, have an alt season for a little bit, like right around the, you know, between the election outcome and, uh, the inauguration. But it wasn't, it wasn't an alt season in the sense that like altcoins outperformed Bitcoin. Like, yes, BTC-D went down, but like vast swathes of altcoins rallied, but they underperformed Bitcoin, which I wouldn't really call an alt season. I would just call them like—

I mean, there was, there was a period, December, you know, late November, December, where everything. There were a lot of rotations. So like Chainlink, for example, went from $14 to $28 and then went straight back down. Like Litecoin, Litecoin did that move. Um, Ripple was sort of a standout there. It's like kind of, kind of the only one. But again, that like, I wouldn't place that into an alt season bucket because I think Ripple was actually a quote-unquote good coin to buy. Like, they're, they're there was a period of time where those shitcoins did rally, but they're all back down like pretty quickly with Bitcoin at the highs. What that tells you is like the cycling of capital is pretty insane right now.

Yeah.

And it also tells you if you can tolerate the pain of being underwater on some positions, there are probably some very compelling, uh, trades out there. You know, yeah, you might not nail the exact top on something, but for example, I think a month ago when we talked about SUI, I said that you have to wait for it to break the 50-day moving average, get a bounce, and then short that. And that's what's happening right now. It did break that 50-day moving average, and so that's probably a good short. Like, if you, if you're not sure where the market's going to go, or you're just looking for an alpha trade, it's like, okay, well, let's look, let's look at some trades or some assets that I think will do well. Maybe you're looking for a catalyst like DTAU, you know, TAO's releasing, uh, TAO's releasing some stuff over the next few weeks, um, and that's underperformed for a while. Maybe that starts performing, and then maybe you want to hedge out some market risk, like, oh, you want to short some SUI against that because SUI looks particularly vulnerable. These types of trades present themselves. I mean, maybe you're down 10-15% on the SUI trade at some point, but probably works over a month, over, over 6 weeks. And so this is a lot of the type of trading that I'm looking at doing right now. I mean, you know, another example of this was getting, getting long XRP, short ETH. I think that was a good trade. I still think that's a good trade, actually, although I'm a little bit more nervous about being short ETH now, so I might have to move that over to something else. Um, just based on how poorly ETH has performed.

Thank you for talking me out of ETH last year, by the way. What a dud. Oh my God, it's still a dud. I would have thought by now it would be like— I thought the regulatory moat that ETH has built from just years of people caring about ETH more than any other smart contract platform would protect it and that it would sort of start to perform even if its tech is inferior. But like I think it's pretty clear that it's too awkward.

We're, we're very close to just being completely over for this asset. Yeah, like, you know, I hate to, I hate to say it, I, I really do hate to say it, but I mean, they're fucked, man, and they're fucked for so many reasons. It's not just the technical, it's They have no real leadership. The Ethereum Foundation's a joke. Vitalik is checked out, um, as much as he claims he's not. And the main thing that they had that I kept saying that they were going to be able to take advantage of was the ETF, and they're going to lose that advantage in the next 6 to 8 months. I think that's very clear. There's going to be an XRP ETF, there's going to be a SOL ETF, there might even be a Litecoin ETF. And like, who buys ETH in this scenario? That's why, like, you know, I think a great— I mean, I don't, I don't love shorting ETH on days like today when ETH BTC is down 1%, 2%, but basically every, every 10 days for the last 6 months, ETH has gone up 3% against Bitcoin in a day. Because of short covering. And that's just been like the trade. You just short it like every time it's up.

Sell every pop.

Yeah, like sell every pop, right? I mean, you don't want to be one of those guys that shorts on a down day and then gets squeezed into the up day. You want to be one of those guys that shorts the— shorts the up day. And I mean, even if ETH ends up comple— like, if every single short on ETH covers, it probably goes to 0.45. You know, that's a big move. That's 50% move. That would be the greatest short of a lifetime. Yeah. Um, because I, I think, I think the trend, the trend is down. And, you know, it's, it's funny, crypto is such an interesting asset class because consistently you have people trying to find the contrarian take And the contrarian take for the last 6 months has been ETH is going to outperform. And I've said this myself, and I've been wrong before. Um, I— and every time I'm like, okay, maybe it's time for ETHBTC to do well, it does well, that's like 10%, 15% move, and then it just immediately goes straight back down. And I'm like, okay, fuck, maybe not. Um, yeah, like sometimes, you know, just a lesson to investors and traders out there sometimes there's a reason that people are bearish. Like, sometimes it's just like the collective has realized that this thing is fucked, and just because everyone realizes it doesn't mean that it can't go down more.

I mean, yeah, it's— you bring up a good point. Like, the contrarian take has been wrong for so long in this one that it's hard to get behind it. It kind of reminds me of how I felt about Solana in like just post-FTX. Solana was like breaking left and right. I forget what the name of that app was that like where you would, it was like a walking app where you had, you know, Solana sneakers and the thing would like give you tokens for the amount of distance that you, you walked with them. Um, but like just that walking app, like a few people using it, like pulled over the network. And I was basically like, okay, the monolithic L1 doesn't work. Solana's not charging enough. It's too centralized. It's basically like not fulfilling its promise. And the core team, Anatoly and co., shipped and fixed and did what they had to do. They got past FTX, and then it was like, you know, went from $8 to, you know, $280 in a straight line. One of the best trades in the history of crypto for a mature token. Um, I'm wondering to myself out loud if we could see one of those moves in ETH, and I think what it would have to take in order for that to happen is Base would have to become ETH. Like, they basically— the core team, Vitalik, they would have to just like ride off into the sunset and just hand over stewardship of the asset and the ecosystem to whoever's building Base. Because Base is great, there's stuff going on on Base, but like, it's just kind of a buzzkill that you have to bridge assets from the mainnet to Base either through Coinbase or through like these, you know, random protocols that are kind of sketchy looking, you know, like why can't you just have Base be a monolithic L1 with an ETH token and just move on from this? I, you know, technically I'm sure that's difficult or impossible, or somebody who's really in the weeds could probably tell me why, why it's not a, not an option, but like, man, the ETH mainnet is just outdated. It's like using, uh, like, like one of those telephones where you have to like swivel your finger around a circular—

no, right, you mean a rotary phone?

Yeah, exactly. So have you tried trading on ETH recently or doing anything? It's just like—

no, yeah, I mean, no in the sense that not trading on ETH. Yes in the sense that took me like 10 minutes to move all my money off of ETH. Yeah, it was big. I was getting it, getting it over to Base. Um, you know, it's, it's, it's sad. ETH was something that got me very excited about crypto, but, you know, I also feel like we flogged this horse, the poor, the poor ETH horse, a lot.

It could come back though.

Like, are you combing your hair right now?

Yeah, yeah, I got a comb on my desk and I'm just styling, you know.

Why? You're, you're also combing the side of your hair. It's not, it's not even, you're not even like poofing it.

No, I'm not poofing it. I got headphones on. Just decide is the side is what's risk, you know, low risk, high reward.

Yeah, you know, I wish, I wish I had hair.

It also feels good just to run a comb through your hair. It's like a, like a little head—

it's like a little head— exactly. Have you ever used one of those things?

Oh yeah, those, those things are great. It's always better if somebody else uses one on you rather than—

oh yeah, it's amazing how that works. But what, you know, here, a trick, you can just sit on your hand until it doesn't feel like just give yourself a head massage.

Heard of that one.

Yeah, but it's a, it's a temporary fix, like everything ETH does to try to improve itself. Temporary fix. You know, I, I think there's always a lot of inertia to this stuff. It's never a fast death, it's a slow death. I mean, in the grand, in the grand scheme of things, right, I think the death will be fast. Uh, like if you compare it to the death of BlackBerry or the death of Cisco, I guess, but, uh, sorry, Sears.

Um, at least ETH is valued like— what's, what's the fully diluted— what's the FTV of ETH right now? Let me look this up. It is $380 billion. So even if it dies slowly, you have a nice high sharp trade for a while, just while it slowly, smoothly trickles lower.

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I want to talk about this, uh, Bitcoin SBR for a second. Yeah, because I came across something today that was actually really interesting that I haven't seen, like, not many people have talked about this, and we, we certainly haven't. Um, I, I subscribe to this research service called 13D. I really like them, they're really good. This is not an ad, I pay them, they don't pay me. I wish they paid me, I pay them a lot of freaking money. But they're really good, and I want to read you something from their most recent report where they talked about the SBR. And these are tradfi guys, but they really like BTC. It says the mere discussion of an SBR in the US, the mere fact that Trump has said that the US will not sell its current Bitcoin holdings, not to mention the broader favorable pivot towards Bitcoin, are sufficient to confirm some early adopter countries to front run the competition and to pursue their own version of an SBR regardless of what the US ultimately decides to do. Now, I think that's 100% correct, but I hadn't seen anything happen on this. Apparently, on December 9th, a deputy from the Russian Duma submitted a proposal to the Russian finance minister to create a strategic Bitcoin reserve. It's quoted by Russian media, widely reported in Russia. I ask you to consider creating a Bitcoin reserve in Russia. Additionally, Pierre Poitras, this Canadian guy, I don't know how to pronounce his last name. It sounds very French to me.

He's—

he loves Bitcoin. And so we could see a pretty drastic reversal in Bitcoin policy from Canada. And we already see Canada being pushed around by the US a bit right now. They might want to front run us. A Brazilian congressman also submitted a bill to create a strategic reserve of Bitcoin for the federal government. Unlikely that that happens, but it's possible. And earlier this week, apparently a group of Chilean deputies are considering submitting to Congress a proposal for an SBR. There's a, there's a lot happening.

Yeah, it's not just nations like Texas, Pennsylvania, Ohio, like Florida, Oklahoma, New Hampshire, North Dakota. You know, these, these states are considering strategic Bitcoin reserves. They're, they're at various phases. Right now.

That's, that's actually also something I hadn't, uh, paid attention to. It's very possible that U.S. states lead the way.

And if U.S. states lead the way, like, let's say that, that Texas creates a strategic Bitcoin reserve, you can be damn sure that the Texas teachers retirement system, which is like one of the largest passive investment vehicles—

they already invest in crypto, by the way.

Yeah, but like, you can be sure they're going to be upping their their ante a little bit, you know.

Oh, 100%.

And, you know, I don't know about the Florida Teachers Retirement Association if they have any Bitcoin, but if Florida has an SBR, maybe they'll dabble, right? It's, it's kind of like Bitcoin is becoming regionally popular and accepted, uh, in a way that it hasn't been before. It feels like a really recent shift. So to me, it's like if you're allocating your own portfolio If you're not mostly like, in terms of what your core long crypto portfolio looks like, your core longs, if you're not mostly in Bitcoin, you'd better be really convicted, uh, in whatever alts you've chosen because your alts are getting diluted just every single day.

I mean, the only reason to not— and this is candidly almost always been true, uh, the only reason to own alts is if you have a smaller portfolio and you're really just gunning for the moon.

Yeah.

Otherwise it just doesn't really make a ton of sense. There hasn't been a single altcoin in the history of altcoins that has consistently outperformed Bitcoin.

Solana, I mean, maybe one or two. The point— your point stands.

I kind of— right, you know, obviously you can make a ton of money from trade— from trading alts. But Solana is below its 2021 highs.

Yeah, fair enough.

Right. I mean, the, the, the alts tend to have this chart. They go up really fucking hard against Bitcoin and really fast, and then they bleed. And the bleed doesn't mean that there aren't periods of time where Solana goes up 3x while Bitcoin is flat. But what it means is that if you're holding this thing for 5 years, you end up not making as much money if you just help, you know, you could just hold Bitcoin.

Kind of goes back to your point about, um, what VCs do in crypto. Their edge is being early, not being particularly visionary, like just, just getting in on good deals at that sort of like pre-IPO priced. And that's kind of what you have to do with alts, right? Like, okay, fine, maybe you can't get in on certain deals, but like if you subscribe to interesting services like our friends over at Blockworks Research or any number of other, uh, crypto-savvy kind of publications. Maybe you can catch one of these alt moves in its early phases. Uh, meme coins take that to the extreme, obviously, but maybe you can catch one of these altcoin projects in their, in their early phases right before they moon against Bitcoin. And then you have to be diligent about getting out quickly and not just like sitting on your bags for 5 years, uh, and underperforming Bitcoin.

100%, which is why, you know, right now Like that, that's the bet. The best trade I see is just buying Bitcoin on liquidation runs and trying to, trying to trade that. I mean, right now Bitcoin's in a bit of a precarious spot short term. You know, we could easily trade back down to the bottom of the range at $90, uh, which at which point I think it's, it's a buy again. Um, but yeah, I mean in that scenario, altcoins just get absolutely obliterated. Great time to buy sort of the leaders in AI, uh, but right now I'm sort of holding tight. And the reason I'm holding tight is because while I am unambiguously bullish over the next 2 months, we hit a lull and we have FOMC, and it's very unlikely that news about the SPR is going to come out in the next 1 to 2 weeks, which allows selling to take place. So I think the way that I'd phrase it is that cash is very valuable right now because there's high uncertainty over the next 2 weeks, and it would be great to be able to buy Bitcoin 10% lower, uh, you know. And if news, if news does come out, okay, get back in. But at least for right now, I think Bitcoin is, is ranging like like you said, and it will eventually resolve this range much higher.

I think, uh, yeah, I mean, I think what sends it back up is sovereign and government buying, you know, like nations and states. That flow is coming. It seems like it's not very far out. So, you know, definitely wouldn't be shorting Bitcoin if it heads back to the high end of the range. And I think that higher Bitcoin will bleed money into certain sectors, certain, certain leaders of certain sectors, like you said. Like, I, I like the leaders in the AI space. I think, uh, I think certain agents will perform. This is probably— it's a scary time to buy that stuff. Oh, if only. Um, maybe AI XBT, who knows? Uh, I think there's a lot of innovation going on that people are sleeping on. In that, in that sector. I just, you know, it's a bit scary to buy right now. I, I'm, I'm pretty much maxed out on AI. I got in, you know, decent levels on average below here, but not nothing like amazing. Um, I wonder if there are any other sectors, Avi, that are just gonna explode, uh, when we get, you know, hopefully a broader crypto market rally later this year. People are talking about DeFi again. Um, I don't— I think meme coins are toast, like old-school meme coins. Like, I— maybe, maybe you have Doge and Trump performing, but like, I think WIF is going to zero. PopCat, Meechi, all this random crap that people got excited about for 10 minutes, uh, last summer when there was nothing else to do. Um, but what other sectors? Is there anything else we should be looking at?

It's a good question, and I haven't run this exercise yet. But I should. There will be meme coins that do well, and it depends on— I mean, it depends on their community. Like, how involved and outrageous is a community still? There have to be, there have to be some. Like, the WIF community is pretty depressed, and I don't think there's anyone that actually— like, the WIF memes are not hitting anymore. They're not, they're not, they're not doing it.

Doesn't have staying power.

Yeah, like, not like that. That doesn't have staying power. But there, there's probably a meme out there somewhere that does. And it's my job to go find it. If any of you listening to this have any ideas or are part of any meme communities that are still having a great time despite the depression in meme coins, let me know. I probably am going to allocate to you. But like, the way— yeah, though, I mean, the way that you got to think about this is go in the Discord. Are there good vibes? Like, what meme coins still have good vibes?

You know, Trump, maybe.

Yeah, um, one other big thing that is coming up is that, um, Barachain is going live soon. The rumors are that could be a liquidity suck, uh, and would also make the SUI short really good because SUI is kind of the only new sexy L1 that exists. All the other new sexy— oh, I mean, I guess you can say hype, but that's not It's not ready yet. I think HyperEVM is coming in Q1, so we have 2 months, you know, because whenever a crypto project says Q1, what they really mean is the first week of Q2. Yeah, that's what I've learned.

Or if it's ETH and they say Q1, it means Q1 4 years later.

Yeah, so I, I do think that like, uh, you know, the, the the short L1 trade, you know, if you want to like sell anything that isn't Solana because Solana has some potential ETF tailwinds, BearChain could at least for a few days probably suck the wind out of the room for these guys. I would assume that TVL goes over there because people, people are really excited about BearChain. I mean, including myself, uh, they, they've managed to garner a substantial amount of TVL pretty quickly. And the one thing through my discussions with the Verigene team that I've always appreciated is that they were so focused on usable applications. Like they just refused to launch anything before they knew they could go live with actual applications that people would enjoy using. And so I think we're going to see that. And if in the, if, if on the first day we don't, you know, then I'm just wrong about the thesis.

What is the— like, what is the— what is the thesis for BaraChain? I know they have a couple of different tokens. They have like their liquidity token, they have their main token, and they have some random thing that's hard to access. But like, I haven't done too much research on the BaraChain ecosystem. It's not— it's not an interesting trade to me because I— the world just doesn't need another L1, in my opinion. I think we're good with what we've got for now.

Yeah, look, I'm not saying that you buy Beara Chain and ride it 10x. I'm saying that if they launch with usable applications on day one, which is their intent, then all the other L1s probably suffer a lot.

Yeah, I agree. I guess where should— what valuation are they talking about in terms of FDV?

No idea.

I mean, yeah, it depends on it.

It's like if they come out of 1 billion to 5 billion to 10 billion to 20 billion. I mean, who literally, who knows?

If it comes out below 3, I'll probably buy it on a, on a yo. Um, above that, not touching it with a 10-foot pole.

I think that's reasonable.

Yeah.

Um, what other things are happening? Uh, yeah, we talked about the HyperEVM, we talked about BearChain. Uh, one thing that was kind of interesting is my— one of my analysts brought up the— in 3 days, the Jito Tip Router goes live, which is apparently going to route an additional $40 to $80 million to the Jito DAO treasury annually. And, you know, Jupiter's done well recently with their, with their announcements. There's currently no buyback or yield distribution of Jito DAO, but what's kind of interesting is that number, $40 to $80 million. I actually didn't realize like how much money these things are generating in this new regulatory environment. The things that actually generate real money, they're going to figure out a way in the next 4 years to pass that back to users. Yeah, to pay some sort of dividend. And I'm actually pretty bullish on that idea that, you know, things, things like Aave, things like Uniswap, things that, you know, maybe even Maker that generate reasonable fees are going to figure out how to use those fees properly because they're not going to be scared of the SEC coming and shutting them down for being a security. So that could be the next, you know, accumulate some things that are generating real revenue, could be the next trade.

Yeah, I think it will be. Um, it's, it's a sleeper because people aren't really talking about it. We've talked about it on the podcast for over a year now. Like, that's going to be crypto's moment, uh, when you can just tokenize your project and pass through any gains to, you know, to users. That's when crypto effectively disrupts traditional equity. And trad equity is inefficient because it's, you know, heavily regulated, difficult to access for a lot of people around the world, and involves a lot of paperwork. And in some cases, you have to prove that you're an accredited investor. Just all sorts of things that make make investing in equity difficult are completely frictionless in crypto. Like, for example, our 1000x project, um, our 1000x agent. You know, if we want to get like people to help us with something, we can distribute tokens pretty quickly. Uh, you know, if we want more people to buy tokens, which, you know, we haven't really like gone for as a message yet, uh, we might though. Is you just give the token some utility. And if you say, hey, this is a— this, this token is the equity for a business, and if you hold tokens, you get paid, like, that's the ultimate reason to go and buy a token. But even without that utility, like, attracting a software developer and some branding people and, you know, just general help where we needed it was super easy. Way easier than, like, going and trying to create an LLC and, like, distributing shares in the LLC. That would have taken, like, thousands or tens of thousands of dollars in legal fees. And, you know, people in multiple random jurisdictions around the world probably couldn't have accessed it very easily. So I don't know, like, token— tokens are just so much easier to work with than what's out there for aligning incentives in these projects. And that's one of the reasons why I got into crypto. It's just that seems so obvious to me. I mean, maybe I was a little bit early to that trend, but I think it's going to be kind of one of those like, uh, slowly then all at once type moves where we wake up, maybe it's 6 months from now, maybe it's a year from now, and some bill gets passed. Then there's that like kind of crickets moment. And then everybody realizes like, oh shit, this means that, you know, millions of people are going to flock to buy these tokens, uh, because they generate yield. Like really real dollarized yield and not just like random crypto degens, like people at hedge funds, people with any sort of financial savvy and access to, you know, funds will go and buy stuff that offers a good, you know, legal investment return.

You know what? I think I'm going to start making that bet, Jonah.

I'm going to—

after this podcast, what I'm going to do is I'm going to go to Token Terminal. I'm going to look for the highest revenue generating projects. I'm going to make a basket of them and then I'm just going to accumulate them and short L1s against them. Like, these, these L1s are fucked.

There are a lot of fucked up—

who the fuck is buying Optimism or Arbitrum right now?

Well, technically those are—

who the hell is buying Avalanche right now?

Who the hell is buying Polkadot?

Who's buying Aptos? Who's buying Polkadot?

Who's buying this shit? Who's buying Sei? I, I— there's so many of these things. I mean, nobody needs them.

We need BearChain. We need Solana.

You, you need BearChain. Yeah, exactly.

I need, I need bear. I mean, you want to eat— I'd like BearChain. Yeah. Um, you know, I like Smokey. He's a funny guy.

He's really articulate.

He is, he is articulate. I, I do, I do like how they managed to get all these. The thing that I love about them is that it's the party chain. Fucking dude, their mascot's a bear smoking a bong, and they somehow managed to get all these institutional allocators in. Like, can you imagine sitting in front of— I think they, they get Susquehanna in. They got— I mean, I know they got Brevin Howard in. Imagine sitting in front of those guys and being, you know, just saying, hey, listen, so we're called Bearachain. Uh, we started because we launched a bunch of NFTs of bears smoking a bong, and take us seriously. And then they did and got like hundreds of millions of dollars of investment. I mean, that's got to say something about their marketing ability.

They are excellent at marketing, which is maybe all it takes, uh, to launch a successful chain. Because as we've realized, it's not, it's not just the tech that matters. No, community.

It's definitely, definitely not just the tech.

Supposedly they threw the best party at Token2049 in Singapore. It was just a big Bearachain rave. The idea of a token being launched on like an entire ecosystem with a token being launched on like vibes, humor, and a dude in a bear suit wearing a Hawaiian shirt on top of it. It's one of those things that makes me like love crypto, but also be kind of ashamed to be associated with it. You know, like I don't—

Don't be ashamed. Be, you know, be happy.

Trump, Trump, Trump made me get to be part of an industry.

Trump definitely made me— Trump made me ashamed.

Yeah, the crypto— crypto is about being ashamed occasionally. Like, even we're all blessed that we're in a bull market. If that's why you have to be so careful when, when you enter a proper bear market in crypto. Like, once prices start trending down, you take two steps back and look at some, some of this shit, or most of this shit, and you're just like there is no value. This is worth zero, right? You have— and, and zero is where it can go from hundreds of billions, which is why you need to be so careful around ETH and be so attentive to the music and ensuring that it's still playing while you have money in this stuff. Bitcoin, the music's going to keep playing for a long time. Some of these other projects though, like, I think you were the one who brought this up, Avi, like, the rotations are just— you need to do it so much faster than you would have even 2, 3 years ago.

I mean, I think it's inevitable that Trump— that Trump goes to zero. Yeah, like, I might tweet that just to see what the reaction is.

When I tweeted WIF is going to zero, people are just like, yeah, fuck you, man, but yeah. Like, the community is just tired. It's always— bear posting is always a great way to suss out how, uh, how engaged the community is. And with WIF, it's what's Yeah, let's see how angry people get. Did you just tweet it just now?

Yeah, I just tweeted it right now.

Cool.

It's, it's literally inevitable. Like, like, it's, it's gonna happen. I mean, you know, with, you know, with, with was really sad because so many people coalesced around it. And like genuinely believed in this thing. And at the end of the day, it's a dog with a hat, and people bet their like life on this thing. Like, I know two people off the top of my head, like, at least half their net worth in this thing. And we somehow like collectively deluded ourselves. Well, I didn't delude myself. You didn't delude yourself, but people were deluded into thinking that meme coins were going to take over the world, that like they were going to become the casinos of the new world. But they're just a game that comes in and out of fashion.

I mean, yeah, maybe meme coins won't go anywhere, but yeah, I mean, I think people were right that, that meme coins are the— because, you know, the, the new games that are going to take over the world. I think what they misunderstood is that one given meme coin is not the casino that generates the revenue. The casino is called Solana, and the, the meme coin du jour is just a game within the casino, right? So don't buy the game, buy the casino.

It's a weird, weird world we live in that we have to think about this kind of stuff. That, you know, that means that Trump coin is gonna be a phenomenal short in like 3 years.

Yeah, if it's— if it has an audience.

Unless, unless Trump becomes God Emperor of the United States. Which I— the probability I put at 18%. It's not zero.

Definitely not zero. You saw he was like talking about a third or a fourth term. I know he's just trying to trigger people, but it's—

is he? I mean, I thought that he was trying to trigger people by buying New Zealand— or sorry, uh, Greenland.

Greenland. Greenland. Yeah, I thought so too, but he seems pretty serious.

He's like— he like actually took it seriously. I mean It's one of those things where Trump will just say something, see the reaction, and, and if he has like enough core support, he'll just go for it.

You know, that's actually not a bad strategy. Um, I honestly, I kind of respect it. I think that there's this great saying in, you know, I think it's Jeff Bezos that came up with this great framework for decision-making in business, and I guess it works for politics too. He's like, you kind of have to assess when you walk through a door whether you can walk back through the door and reverse your course or not. And he's like, if, if you can, if you can exit doors that you enter, then you should just enter those doors and see what's behind them. You know, it's like you have to be very careful when you make basically a committal decision where you can't— where you have to go through the door and you can never come back. And I see a lot of, you know, that approach in Donald Trump. He's definitely opening a lot of doors and trying a lot of random things.

And, you know, maybe the thing with Trump is that he has a very unique ability to go through a door that you think he can't come back through and then just, he just walks right back.

Yeah.

Like people just, they, there's like, there's so much mental gymnastics involved with supporting Trump. Yeah, that you just automatically assume that if he, if he said something and then did it and then walked it back, it was actually 8D chess play. He was playing, he was playing, he always meant to walk it back. He only did that, you know, he got this out of it, you know. It's like, it's, it's crazy. Yeah, he, he knew that somebody that's like pretty right-wing and reasonably conservative I still find him just like, just not my cup of tea. Yeah, obviously, you know, as a president, voted for him and whatnot.

Yeah, but just wonder if he, uh, yeah, it's like, I wonder if he knew in that trailer before the Access Hollywood, uh, appearance talking to Billy Bush about all sorts of disgusting, uh, vulgar stuff, um, I wonder if he knew that was going to go viral and that was like an 8D chess move. He's the master of memes. We all need to be a little bit more like him in terms of just being completely Teflon. I let stuff get to me sometimes, but I think in crypto we have to just, gotta be a little bit more like Teflon Don.

You, honestly, the best way to make sure that stuff doesn't get to you is just to deny it. Just like that, that's what he does. You ever do anything wrong? Deny.

Tonight till you die. Nope, wasn't there, didn't see that.

Wasn't me. No, it wasn't me.

Yeah, it wasn't me.

Anyway, oh, John, it's a pleasure as always.

Yep, pleasure talking to you, Avi. Nothing we say is financial advice, it's just shooting the breeze.

Never is, never will be.

Um, yeah, let's keep, uh, grinding on this 1000x agent, and I'll see you next week.

Oh wait, before we go— yeah, I showed you this before. Hold on. So for those of you that— for those of you that don't know, um, I went to WashU in St. Louis, and I was actually there when the 2016 presidential debate was happening, and I volunteered for the Donald J. Trump for president campaign.

Wow, you're early, aren't you?

I was an early adopter. I should have gotten an airdrop for this thing.

You look— you haven't changed at all, by the way. You look identical.

Do I?

Yeah. Same haircut. Same haircut. Same general look.

I don't know. I got a few more wrinkles.

Yeah, that's true. Crypto's put a few years on you.

Maybe I should take a picture of this and say I should have gotten an airdrop for this. Anyway.

Yeah.

Until next week.

Till next week. This was great, Jonah. Thank you.

Likewise. See you soon.