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- [00:00]
A
What qualities do the people at Goldman look for when they anoint the next class of Illuminati?
- [00:07]
B
Yeah, it's a very specific set of things. So.
- [00:32]
A
What a sexy new intro, Jonah. What a great. What a great intro.
- [00:36]
B
That was the next media bringing the heat here, Avi.
- [00:38]
A
I love it. Yeah, that was. The next media is only up. I mean, you guys, people are joining now. It's going to be good. But what you guys got to know is that we're, we're upgrading this a lot in the next. By the end of the summer, you're going to see a totally new thousand X media. It's going to be great. You're already seeing a little bit with the Jordy Pod. If you haven't already watched the Jordy podcast, go to our YouTube. Click on it. It is one of the highest alpha, highest density interviews that we've done. It's 30 minutes. Just watch it. You'll get something out of it.
- [01:09]
B
And can you, I have a question, Avi. Can you just. You know, I missed it. I saw you in France, but then I ducked out before Jordy showed up. Can you just quickly tease, like, who, like, how did he start Cellini? It's very difficult to start a trading powerhouse in five years or less. Like, who is that guy? What happened? How did that even occur? That conference was elite, by the way. It was super well done.
- [01:32]
A
No, that conference was actually incredible. For those of you that don't know that Cellini Capital is a market making firm, investment firm in crypto, they don't sponsor the pod. This is not a sponsorship. I just love Jordy. And basically what he, what he started off as is he started off as a poker player, got into trading crypto as just a normal, average market participant, and slowly, I think, learned the ropes and basically from first principles figured out how to build a market making firm, which at the time I think was a little bit easy. Right? It was kind of easier to build a market.
- [02:09]
B
No, it wasn't, dude. I ran a market making business in crypto at that time and it's hard. Like there were already deep incumbents like Cumberland Wintermen.
- [02:19]
A
I meant, I meant starting a market making firm in crypto is easier than starting a market making firm in Tradfi. In that.
- [02:27]
B
Oh, hell yeah.
- [02:28]
A
In that you don't. You kind of just need to be intelligent and scrappy and smart and just better than other people because there actually isn't a ton of institutional blockage in the traditional world. There is an infinite amount of institutional fireblocks or firewalls roadblocks that you actually, if you wanted to go start a market making firm today, it would maybe be impossible to do that because you need to be co located, you need to have the infrastructure to do it. And in crypto kind of you need
- [03:01]
B
like $100 million in the best COO in the world if you want to have a shot.
- [03:06]
A
And, and I think in crypto the beauty of it is that it's the barriers to entry are just so much lower, which is why people like me got into crypto straight out of college. The entire reason that I joined crypto in 2017 instead of taking a job full time in finance is because it was easier one, to make money and two, to actually build a career. Because in the traditional world you have to slog, you have to start as an analyst, then get you an associate, then get to whatever the next step is VP'd and then get to MD. And it actually kind of doesn't matter how good you are unless you're genuinely an exceptional once in a generation talent. Where you hear these Goldman guys that make MD at 30, there's like one every few years in crypto you kind of just needed to be good enough and you could do really well because the level of talent was quite low. And I'm saying this about myself, not, you know, this is not a, this is not a, a dig at anybody. This is the entire reason that I got in is because table selection is probably the most important thing that you can do. Picking the right table to play at, picking the right game. You want to play an easy game, you don't want to play a hard game. That's my take. And so, and so the background, we got a little sidetracked here, but the background is that Jordyn starts this market making firm, starts this investment firm, Cellini. It grows. He has managed to weather a ton of different drawdowns. FTX Luna collapsing October 10th. The the entire bear market stuck around. And I've always found him to be an extremely thoughtful and intelligent guy. Not just about markets, but about life as well. And some of that comes through on the pod. And so I'm basically saying that you guys gotta, you guys right now gotta listen to the podcast. I mean just like go listen to the podcast. It's really important.
- [05:11]
B
I mean it's funny, like a lot of people went from poker to crypto, but most of those people didn't build successful companies and just seeking to Jordy's accomplishment, like having run what I would consider to be a topic crypto market making firm in that era where he was building Cellini, you know, obviously it wasn't as hard as starting like a Jane Street, a jump a Citadel Securities, I'll give you that. But man, it was. They're already deep incumbents then. Like we almost forget how important Alameda research was. Jane and Citadel were heavily involved in those days already before the regulatory crackdown. Like it's pretty tough to build something successful against that backdrop. And I know a lot of people have tried and failed. Like for example, the, the H Bar guys are trying to build a market making firm. There are all these people trying to build market making firms. But it's just too little too late. And I would say when Jordy started in 20, 21 and 22, it was already almost too late. He kind of, he was fighting some real headwinds in TER in terms of just incumbents like Wintermute being absolutely super dominant. Amber, there are these incredible firms at that time and I think you'd have. Basically what he had to do was thread the needle of starting in a peak bull market and then not immolating on ftx, which was very difficult. And so he was like, props to him for having navigated it. A lot of poker players that I know got in very early. They got into not going to name names, they got into defi, they got in, they were early to cryptopunks, early to bored apes, they ran it up art, but they didn't build institutions. And they've also written it down quite a lot. So very rare to see like the individual producer mentality sort of cross that membrane into the entrepreneur mentality to build something that lasts. It's actually something that I've noticed in my career as well. And then we're going to get on table selection because you mentioned it. Abhi, it's very difficult to go from individual producer, retail trader, line trader at a bank to somebody that builds something that sustainably generates cash. It's super rare. Which is one reason why I'm excited to see what you build at one KX Media. You are going from individual producer to business builder. It's not a normal transition. So I respect people that just.
- [07:43]
A
It is quite fun, I have to say.
- [07:45]
B
Oh. I mean that's why once people go into startups, they don't go back. Like it's way more fun than being at probably Golden Tree, I bet. But just one quick note on table selection. I want to get your take on this. You said it pays to select the right table. I actually think that's the most Important thing because there are exciting trades in different markets. You know, the sector that's hot is always going to rotate, but you can't just follow that around. You have to be at a, like you have to pick a table and sort of stick with it for a while. You can't just jump from asset class to asset class. And some asset classes have tables that are full of sharps and you can't really compete. So I noticed this when I went From Goldman to VTOL. At Goldman you mentioned the 30 year old MD. I knew a lot of those guys who are like, at Goldman you can kind of see who the Illuminati are. They sort of anoint them in their mid-20s and then they just sort of ride waves. Usually they have what's known internally as like a rabbi. They'll have like somebody above them who's just shepherding their career upwards because there's some degree of mutual benefit. I was not one of those people. Yeah, it's called a rabbi. Like on Wall Street. Not just at Goldman, but I think Goldman.
- [09:04]
A
I'm kind of curious is maybe going to turn into me interviewing you about this. But what qualities do the rabbis look for? Let me reframe that so that we can clip it.
- [09:17]
B
Yeah.
- [09:18]
A
What qualities do the people at Goldman look for when they anoint the next class of Illuminati?
- [09:25]
B
Yeah, it's a very specific set of things. So the. You find that the Illuminati who the Goldman partners anoint to become the young MDs, the future partners, the people who will make the, you know, the mega millions inside of that firm. The first thing that I noticed about them is they're all exceptionally well spoken. Like verbal articulation is counterintuitively something that I noticed to be the one unifying trait across all of them. These people were basically like Barack Obama level orators and able to articulate ideas in a way that was just so smooth and cool. Which I think Goldman wants for its external facing image as well as its extremely ruthless internal politics. So the next thing is these guys are all incredible. They're usually guys, but sometimes women. Incredible politicians for like, think of Goldman as being a brand like Chanel. Don't think of it as being an upstart market making firm that's going to win by being scrappy and having great tech. Like people shop at Goldman because they like to tell their stakeholders that they trade with Goldman or they bank with Goldman. It's like a really elite brand. Much like, you know, people shop at Chanel because not because the Quality of the material is the best, but because they like that logo so realistically inside of a great brand, it's less about producing new streams of revenue and more about shepherding existing ones and growing them. And some of that is wishy washy. Some of it's like gaining attribution for something that was created by somebody who's retired. Right? So internal politics is very important. And these, these smooth talkers tend to be great politicians as well. And then the final factor is they have to be, they have to be like hyper commercial. And what that comes down to, you know, you look across a variety of different asset classes and things. At Goldman I was in securities trading. I was in fic, which is includes securities trading. I traded commodities though, not securities. In order to be a top flight trader at Goldman, you have to be on the right book during a time when it's absolutely killing it and you have to be demonstrably adding value somehow. And you have to massage the value that you add to make it look like it was mostly you, even though a lot of it was just the brand. So you have to, it's like a combination of commercial savvy, verbal articulation politics and misrepresentation of brand representation as like personal trading acumen or personal investment or banking acumen that gets you there. And I know that's a bit of a tough answer to digest, but like, and a lot of times it feels unfair to the people who don't get anointed, such as myself. I came pretty close and then kind of failed because I think I'm pretty bad at politics.
- [12:22]
A
What do you think led you there to like why I was on the
- [12:26]
B
right book at the right time. So oil was, I was like there in commodities, which is the beating heart of the trading side of the firm, right. Like Lloyd Harvey, all the main guys who are leading the firm, David Vineyard, they all came from J. Aaron, which got acquired by Goldman and became Goldman Commodities Trading. I was in the right place. Oil was the sexiest book in the entire business. I was like the up and coming, like Star, 25 year old on that book. I was there during some huge years, personally did the things that you need to do to gain attribution for it. Where I sort of screwed up. Well, first of it was, first thing was not my fault. Drw, Infinium, Optiver, Jane Jump, Citadel, they started automating options trading. So instead of me like seeing in my, you know, in my model that I built that an option was worth 2 cents, I would make it one bit at 25 because I knew the guy was a buyer. Who would ever sell a 2 cent option and get lifted. It went from being like one bit at three on screen in infinite size because of these quant firms. So our P and L shrank from like 650 million a year to like 40. Right. So that crash negatively impacted my career. That was just bad luck. But I could have withstood that and still grown. I sort of made two critical errors. The first was not like not acquiescing to the company's asks that I move to London and start trading more different types of options. Like I really. I wanted to stay in my lane. I was very comfortable and frugal oil and sort of drunk from a couple years of success on just oil. I was like afraid of expanding into unknown territories that had been historically unprofitable. When I was asked to do so and asked to move to another country I like kind of dragged my feet. So that hurt me. And then the other big one was I played the politics wrong. Like politics inside of Goldman involves a lot of backstabbing.
- [14:32]
A
What does politics mean here? Just taking, taking down your ops or. Yeah, getting cozy with the right people. Taking them out to dinner.
- [14:42]
B
That's right. So getting cozy with people you don't like is something I struggled with. Getting cozy with partners who I found personally distasteful. You have to do it. I just didn't play the game. And then more importantly, a lot of backstabbing is involved when you. Because you have to step on people in order to ascend within a century plus old institution like Goldman. It's not just a pure meritocracy. You have to step on people as well as capture opportunities. And on the stepping on people side, you know, sadly, I'll admit it, I was, you know, very actively backstabbing which is what you have to do. So that's. But that's only half the battle.
- [15:19]
A
How do you back. I mean what are you like talking shit about people behind their back?
- [15:23]
B
Yeah, talking shit about people doing analysis.
- [15:27]
A
It has to be in a. Yeah.
- [15:28]
B
Do an analysis on where people had fallen down and making the case that you can step in and make more money out of that particular line of revenue for the company is a big part of playing internal politics At Goldman I played the game there. I was certainly a backstabber, which I regret. However, I was a sloppy, inexperienced backstabber. I got caught out a couple of times and didn't place. Tried to backstab. If you take a shot at the king, you better not miss, right? And I took some shots and missed. So basically like that didn't. I didn't get fired, but, you know, I certainly wasn't. I went from being like on the Illuminati track, like a young balding Jewish guy at a company run by bald Jews with all the right rabbis in
- [16:17]
A
place to hey, you still got your hair.
- [16:20]
B
That's, that's because I got some replanted. But basically, you know, I think just to wrap this up, if you're. None of this is fun, right? Like, none of this is how you want to build a career. But it becomes like a drug, it becomes addictive when you're inside of a place like Goldman because of the allure of that title, that Goldman MD or Goldman partner. So I played the game. I played it kind of badly. And once I realized I was on the wrong track, I picked a different table to play poker at, which at the time was vtol. I picked the right table. It wasn't clear that was going to be the table, but I was swimming upstream of those tech slash trading Cellini like firms of their time. The drw, Infinium, Optiver, Citadel, Jump J and kind of mafia that eight options. I was like, options are just too competitive. Now I'm going to go to physical optionality inside of vtol, which at the time was a good decision. So when, basically when you, when you start losing at a table consistently, you have to pick a new table. And that's what I did.
- [17:21]
A
I think that makes a ton of sense. I mean, that's kind of interesting to get the insight there into how it all works. It reminds me a little bit of my time not as much at Golden Tree, because there's a lot, I think just at a hedge fund there's a lot less in terms of politics because you're not really fighting for deals in the same way. You're kind of just trying to make money. But I think once you get. Once a firm gets big enough, the problem is that there is a ton of excess profit to go around. And that actually means that if you embed yourself in the system, you actually don't necessarily need to be as competent as you would at a small firm. You can kind of just ride on your relationships and the fact that people like you and the fact that you bring something else to the table other than, you know, your per. Your pure profit taking. And that's just a natural. That's just a natural progression of. I think that's just a natural progression of a company growing. Let's Put it like that. The bigger the company gets, the easier it is to coast, which is not. That's not a profound statement. I think everybody knows that. But it is something that I personally hated, which is why basically my entire career I've tried to work within small groups at firms, even if I'm at a larger firm, try to get into the smallest group possible that has the most autonomy possible. And that sometimes is dangerous. I mean, when I was at Golden Tree, I can't wait to tell this story. I'm going to have to have a few years pass before I really get into it. But we were obviously running the alternative assets crypto division under the Golden Tree arm and it just wasn't important enough to keep around. Once kind of hit the fan with ftx and so even though we had done extremely well, it sort of died for political reasons. It died because, you know, because of a tennis match in many ways, actually.
- [19:13]
B
But what does that mean? Sorry.
- [19:15]
A
It died because of a tennis match in many ways. There was a. There was a personal issue that happened during a partner off site. It's a long story that I probably shouldn't get.
- [19:25]
B
Oh, so it wasn't an actual game of tennis where they were like. I'll wager your.
- [19:30]
A
It was. It was downstream of a dispute in a tennis match. Is the reason that the crypto division at Golden Tree got axed.
- [19:39]
B
Oh my God.
- [19:40]
A
Yeah, I want to hear that story. Because we were up by the end of 2023. We were up 172% that year and we were crushing. Like we were doing really well. We were the best performing fund in crypto because. And we were also running more than like we, you know, turned 100 million into 200 million more. And we kind of got ax just for political reasons. And then I ended up going and managing money for Mike Novogratz for about a year before I stepped away to just manage my own capital because thank God I have the ability to do that now because of what I've done in my career and enjoyed now podcasting and live streaming to you guys. But yeah, it was kind of crazy, actually. It was sort of a nuts experience to go through that. And it made me realize just how important one your reputation is. It's very important to have a reputation that is good and a reputation as reliable and trust, mainly trustworthy, I think is important. And it's one of these things that, you know, you don't really need to have as an individual trader. Which is why I sort of stepped away because it kind of Actually doesn't matter how trustworthy you are or the way that you act almost doesn't matter. In many ways. It's, can you manage other people and what they're going to say about like, you know, if you have somebody under you that is gunning, that is gunning for your position, they have every incentive to undermine you. And so can you build a relationship with that person where your personal relationship outweighs the incentive to stab you in the back? And that's something that I'm not the best at because I'm a little bit too autistic to, to, to do, to do that, to be honest.
- [21:29]
B
Internal politics are tough. I mean, luckily the problem is like, if you want to succeed inside of a large firm, which is frankly most people's path to achieving financial independence, right? Like all this retail trading that we talk about, it's very rare that somebody's gonna like, listen to the Thousand X podcast, like drop out of high school and just turn like a couple thousand dollars into ten million dollars. Usually you gotta have big income coming in from your, your day job in order to manage that. It's very rare that you're like a poker pro like Jordy, who then turns it into a fricking market making firm and then runs it up with institutional capital. Like it's usually you gotta be in one of these systems to earn the money to deploy into markets in a way where you're not like worried about putting food on the table, you know. So I guess it is relevant that at some point in the hundred episodes we've done, we've talk about what it takes to survive and thrive inside of a big company. Maybe we should do like a segment on that at some point.
- [22:34]
A
But I think that's, that's something that you would be much better at than me just by virtue of your, your career. And mine's been a little bit more solo focused. But what's, what's, what's actually really important is to understand that this podcast is not just about the markets. It's about how do you position yourself to succeed in this new world, right? With all of these opportunities that are presented to you, how can you actually come out the other side living life like Jonah lives life with three quid. Three. Three kids, a beautiful life and a house and, you know, beautiful house in an area that I won't disclose. And so, you know, we've talked a lot about table selection and some of the, some of the tables that I see as very sort of quote unquote, easy to sit in today. You're kind of seeing it now, which is actually tough for people like us because we've been active traders for, for, for a long time. But Ken Griffin comes out and says, you know, we're, we're actually seeing that a ton of the alpha in short term trading has been juiced. A ton of the alpha in market making has been juiced. This is becoming almost commoditized in a way.
- [23:48]
B
Juiced, meaning squeezed, like.
- [23:51]
A
Yeah, squeezed, right. So a lot of that alpha has already been extracted and he's kind of looking for what's next, like where, where is the next piece of the market that you can go take and really, you know, get return from? And it's what we've been talking about on this pod for quite a long time. It's the megatrends. If you can prognosticate and think three to five years out in the future and then weather the volatility, stay in the assets, eat the drawdowns and just wait for your thesis to play out and obviously be right, you have to be right. That's actually a huge source of alpha. And this has historically been very hard for hedge funds because they have month to month marks. They have investors that will get mad at them if they're not making money year over year. If your bet is that in the next three years this asset class, like insert asset class grows, but you take a 25 drawdown in the meantime, you actually are facing an existential crisis. People could pull their capital. This is a common thing that happens in hedge funds where people tend to pull their capital at the worst possible moments. Because you're, while you might be an amazing investor, the people that are allocating to you operate a lot more on emotion. So if you're for example, investing in crypto, I mean the, the most amount of outflows that you see in crypto are at the bottom. Right. The bottom is, how do you define a bottom? The bottom is when there's nobody else left to sell. Basically, very rarely is a bottom when there's massive buying that outweighs the selling. The bottom happens when there's nobody left to sell. And so you tend to get a ton of people like bottoms are also marked by extremely high volume. People tend to panic and sell out. And then once everybody exits, then you can start to go up again. That's actually a little bit of what I think is happening in the crypto markets. And when I'm looking at, when I'm looking at the crypto market today, specifically Bitcoin and A lot of other assets. Now it's that the main thing that people were worried about for a very long time was Michael Sailor. People were worried that Michael Saylor was going to offload all of his bitcoin and that was going to cause a spiral. Well, he's sold. He seems to be in a much better position today. And what I'm seeing in the market is that basically everyone that was going to sell at these specific prices have likely already sold. They've either sold because of the headlines or they've sold because of price action, or they've sold for a variety of different reasons. And there's kind of nobody left to sell massively at these specific prices in my Michael Saylor. Other than Michael Saylor, but I said other than Michael Saylor. Yeah, but that, that, that's, that's the key here. And so then your one question is, who? Like, who, like what? Whenever you're trading, whenever you're investing, you have to think in terms of flows now because fundamentals mean nothing these days. Like, you know, flows are kind of everything. You look at memory stocks, intel at 140 was, quote, unquote cheap according to fundamentals. It still went down 40%. It's trading at 100 today. It's even cheaper today. I mean, who knows if people are going to step in and buy it. So it's really about flows and profit taking and where people will step in. And crypto as nonsense. XXX says crypto actually never had any fundamentals. Nonsense is in our chat. If you want hop in our chat and ask us questions, we'll, we'll respond to you. Now. Crypto never really had any real, real fundamentals. And so what that means is that it's always been based on flows. So what do you do, what do you do in, in an asset that is solely based on flows? You need to create a mental model for yourself of who are the set of buyers, who are the set of sellers and what are the criteria, criteria for them to buy and what are the criteria for them to sell. So when I think about the, the criteria of sellers, it's Michael Sailor and people that are willing to front run Michael Sailor because the average, I think the average cost of people's bitcoin, there are not a ton of people now that are cashing out of bitcoin to lock in profits. Bitcoin's off 50, 50 or, sorry, 50% from the highs. So there are not a lot of profit takers left in the market. So the only people that are sort of Left to sell are people that are short sellers or people that are betting that bitcoin's going to go down. And people that hold bitcoin long term that think that they can trade it. Right. So again, also kind of a short seller and Michael Sailor, and what I'm saying here is that Michael Sailor specifically seems to have short up his balance sheet right now and doesn't need to sell at these prices right here, right now. He doesn't need to. He sold his stock, he sold his bitcoin, he's built reserves. He probably will at some point in the future again. But right now there's not a ton of selling at this like 58 to 65 level. Now if we. So then your answer is. Or so then your question is, what changes? How do you assess moving forward who the sellers might be? Well, price is obviously a big one. If bitcoin goes up to 75, then you have a new set of people that are in profit. You have people that bought at 58 that might want to sell at 75 to take profit. And so you have to think, where is the buying going to come from? Where's the selling going to come from? Okay, so now, now let's talk about the buy. So who buys bitcoin? It's long term allocators that I think are probably topped out in many ways. I think kind of everyone that's a long term allocator to bitcoin that has a five to ten year time horizon. It's like we've saturated that market. That used to not be true three years ago. That wasn't true because that was pre Trump and people were still quote unquote scared of bitcoin, they were like, okay, well I don't want to touch it now. Basically everyone that has a, it's, it's a very small subset of people that are newly generating these five to ten year theses on bitcoin. So then who's left to buy? It's people that are trying to, you know, hedge against some like hedge a part of their portfolio against inflation or whatever have you. Whatever bitcoin's NAR narrative is at the moment. And it's traders and it's people that think that bitcoin can go up. It's people that are trying to, people that are trying to get a profit on it. And this obviously actually increases with price as well. So this is an offsetting, this is an offsetting dynamic. What do I mean by offsetting dynamic? I mean that the sellers also increases, price goes up and the buyers also increases, price goes up in this, this particular dynamic. So your question is, where are the traders going to come from? Where the, where is the buy side going to come from? 2 places. One, when people view a very favorable risk reward setup, people will step in and buy bitcoin. Right now there is actually a reasonable risk reward setup where you can sort of buy Bitcoin here at 65, cut it below 60. If we get back down there and aim for 80, 82, like where we talked out last time, basically try to play a range that's kind of a trade that you can take or you can, or you can look at the market. Memory selling off a ton today. Maybe some of the people that are cashing out on memory will try to move over to bitcoin. That probably only happens with momentum. So now this comes to a fine. Like this comes to a head. How do you construct in your brain a model for how to buy bitcoin, how to buy crypto? If the entire market goes up, let's say that the, the NASDAQ starts going up and the memory stocks start going up and bitcoin starts going up. Well, you know that there is a certain set of sellers that will appear when bitcoin price goes up. And you know that there's a certain set of buyers that will appear. But those buyers, if the entire market is going up, are unlikely to allocate to bitcoin if the whole market's going up. I'm probably not super bullish on bitcoin, but if memory stocks are going down and bitcoin is going up, that's a new set of buyers that can come into the bitcoin market. It's the people that are cashing out of memory and the people that are looking for somewhere to place their capital and they might go to bitcoin. And so that's kind of what's happening right now. And this is a long winded way of giving you sort of, instead of telling you why, like telling you I'm bullish on bitcoin, I'm sort of explaining to you why my thought process has changed, why I was bearish before and why I'm less bearish now is because memory's coming in, nasdaq's coming in, bitcoin's holding steady. That brings new buyers, in my personal opinion, into the bitcoin and crypto market. Especially if it keeps going up and therefore I think maybe we can hit 75 to 80k. Are we going to go to all time highs? I have no idea. But this, this particular trade setup looks okay to me. Stop. Do I think that Bitcoin is the best expression for that trade? No, I think that hyperliquid is probably a better expression for the trade. I think that Robin Hood is probably better expression for the trade. I think that Ethereum is actually a great expression for the trade right now because of what's happening with Robin Hood chain and Arbitrum and all that. Using Ethereum security is the bottom line. And maybe lighter is a really good expression of the trade. It's like these sort of. Zcash especially is a phenomenal expression of the trade because it's, it's performing really well already. It's, it's doing well. And so it has that momentum factor to it where people, where people might come in. And you have to remember that these are traders. Right. What I'm talking about is the traders are coming in. So when I think about constructing a trade here, it's. I just, I bought those assets yesterday basically on, on the, on the memory sell off. When I realized that crypto wasn't going down, memory was coming off. And this entire framework, I think comes together for me now and I think that it's very likely that we get some sort of bounce in crypto. Does that make sense? I know I just went on like a super long tangent, but I think it's actually extremely important for the listeners to understand my framework as opposed to me just telling you, okay, I'm bullish on this, I'm bearish on this.
- [33:32]
B
Yeah, I mean, what I took away from what you just said. So I'd say 80 to 90% of it, I like picked up what you were putting down. There was a little bit that in there that confused me. But what I take away from what you just said is not that it's time to get bullish, which isn't what you were saying. I'm not accusing you of that. I just think you're painting a picture that's a very mixed bag. So I think crypto is going to remain meh for a while. I look at it slightly differently than you. I'll put my, put my thoughts out there and then we can debate them. Mine are probably a little more brief. Basically. I think they're. The bitcoin as a macro theme trade is sort of off the table right now, especially with rates potentially going up rather than down. I think bitcoin performs very badly in a rate hike cycle, which would make it a good trade from a short side. And it performs extremely well during a Debasement cycle like what we saw during COVID where Captain Joe Biden was just printing trillions of reckless abandon, as were his counterparts in Europe and Asia. We're sort of in between those two extremes. So bitcoin's like from a macro perspective met then from a flows perspective. I agree that the non sailors of the world, everybody who isn't Michael Saylor, have sort of run out of reasons to sell bitcoin. Mvrvz, the sort of my favorite metric of determining how in or out of the money the holders are is near all time lows. Basically selling's been exhausted with the exception of one big question mark, Michael Saylor. So you have a guy who could sell a lot more and an otherwise very bullish stock and flow picture that is also very mixed. Very meh. Then let's move on to just the broader retail interest in crypto. You mentioned HyperLiquid, you mentioned Zcash. I actually think the purest expression of froth or lack thereof in crypto right now is our buddy, ansom friend of the pod dollar sign Ansem, the Black Bull token. You look at that.
- [35:55]
A
I love anom and he's actually coming on the pod next week on Friday.
- [35:59]
B
Yeah,
- [36:01]
A
this is like I don't understand the meme token. I don't get it. And I'm kind of.
- [36:07]
B
Well, I mean look, I get it. We all get it. I'm not going to criticize or say anything about why one would launch a token like we did. It happens. There's a time in your life where you just want to launch a token and maybe this is his, but like abstracting away the rationale for doing it or what it means for crypto, let's just look at the price action. It is from a meme coin perspective the most exciting launch since Trump for sure. And it launched on July 1, 15 days ago it ripped up into the sort of mid nine figures market cap wise and now it is 60% off the highs literally a week later. So I look at these sorts of charts because you know, technical analysis works for meme coins with no fundamentals. You know, during the summer of 2024 when it was like meme coin summer, these arcs lasted a lot longer. Like the fart coin had a, you know, a multi month run, goat AI 16Z, all of this crap, it would, it would rally for months and then the grind lower was months. Now the tolerance is much lower for this stuff. Like I think, you know, it's, it's literally a couple weeks of up and down to me, that doesn't signal a lot of retail interest in hyper gambling, which you may or may not need for crypto to go up. So let's count out the hyper gambling.
- [37:32]
A
There is nobody left to hyper gamble in crypto. That's kind of the problem.
- [37:37]
B
Yeah, look, I'm not debating that. I'm just saying, like.
- [37:40]
A
No, I'm going through each. Somebody said that we're boring, so I need to like, we need to spice.
- [37:44]
B
No, no, no, you avi. No, we're just going through the layers. Macro is. Fuck you, Jonah, you avi. Macro is meh. Micro is meh. The hyper gambling, there's not a lot of appetite for it. Stock and flow is meh. So I think basically what you're in Bitcoin for, I think if you accumulate slowly here, it's probably a good idea maybe I should get off this call and go and rebuy some of the crypto I sold at higher levels. Crypto being bitcoin still in the hyper liquid. Got to figure out what to do with that. I think ultimately there's a mega trend over the long run of currency debasement. The political situation is not looking any, any, any less grave from the hyper debasement thesis. Right. So you're going to want to own Bitcoin over, over the long, long run. The question is, where do you enter? What's your entry point? Do you try to buy here or do you try to buy it down 50% from here? It all comes down to Saylor. Basically my read is nothing's going to move until Saylor's done or you get a rate cut cycle or you get hyper gambling coming back, probably won't have a rate cut cycle. Anson tells you everything you need to know about the lack of froth. And it'll probably be that way for years. It's really just like what's. Is Saylor going to puke more or not? I'd say let's call it a coin flip. Probably means you want to like dribble, buy a little bit here, like dollar cost average, nothing aggressive, just. It's just not a good trade right now. It's a good long term accumulation point. I don't know. What do you think?
- [39:21]
A
I don't know. I mean you, you heard me. I think it's a phenomenal trade. I think that you should be buying Bitcoin here as like a short term kind of bounce. Although the only thing that I'm a little nervous about is that kind of want to buy memory too, like as A bounce. But I think that, I think that we might be able to have a little bit more of an unwind for memory we could have. I mean, DRAM's down 7% today. Intel's down 5% today. NASDAQ's only down tracking DRAM.
- [39:50]
B
What's your index for DRAM?
- [39:51]
A
No, no, the, the ETF. The round ETF. The round hill.
- [39:55]
B
I was going to say right now is a good time to buy hardware that you can resell on ebay. Right?
- [40:01]
A
Like where the am I going to put hardware, Jenna? Your.
- [40:07]
B
I don't know, your garage at your estate in Long island or wherever you, wherever you are.
- [40:11]
A
I don't know, I'm, I'm quite literally in my 900 square foot new York apartment.
- [40:16]
B
Where's my beautiful thing about physical hardware? Unlike crude oil, where you need an Empire State Building sized tanker to put millions of dollars of oil, I bet that room behind you could fit 50 million bucks worth of MacBook Airs. Maybe you should start flipping shit on ebay, Avi. Don't buy the physical chips. Nobody will buy chips from you unless you're certified. But hardware, especially if you're buying refurbished hardware, you can flip that shit, actually. I know, it's funny. Quick shout out to Josh Moorer, one of the early employees at Uber and my classmate at Columbia. He got. Because he, he was the first GM of Uber New York, obviously very successful guy. Now he's doing his own AI startup. He got to start flipping jeans, like blue jeans on ebay and other forms of clothing. I know a lot of like crazy physical trader entrepreneur guys. You want to talk about a easy poker table with, with no sharps at it? That's, that's where it's at right there.
- [41:17]
A
How do we, how do we find them? How do we play poker against them?
- [41:22]
B
Start an ebay store. I'm not even kidding. Like you literally, if you believe that, if you believe that the price of DRAM is going to go up, go and stash refurbished hardware somewhere and resell it on ebay.
- [41:37]
A
Not even, I'm still, you know, I actually still think that collectibles. Like, I can't wait to interview AJ Scaramucci about this. He's raising for something called Treasure Trove where he's buying these collectibles. It's like every time I talk to somebody, I get a new take on why there's like far too much money in the top half of the K and it's all being funneled into random that people like instead of actually being funneled into Anything into anything useful. It's okay. I'll give you an example. My girlfriend just bought. Sorry, let me restart. My girlfriend bought a draw like a dresser a few years ago for $600. It's an old like 60s design, space age type green dresser. It now sells for $6,000. Because it's a designer that is kind of well known and you're kind of seeing this literally everywhere. Scarce items are. Yeah, dresser, yeah, a dresser. Jonah, like an ant, like not an antique. It's like I guess like a couple decades, like actually crazy. Like that is an insane statement that this thing 10x over the last few years and that's just going to keep happening. So it's, it's stuff like that that makes me nervous about crypto because if people are able to gamble on like physical items and furniture and people are able to gamble on, it's like the long term, the actual like long term nature of crypto is in danger because it is gambling at the end of the day and that's what makes it valuable. Basically everything outside, everything that doesn't make money.
- [43:15]
B
Now that's an AI trade by the way. Can I just interject real quick?
- [43:18]
A
Yeah, for sure.
- [43:20]
B
Thrive Capital. Josh Pushner just bought a sports team. Vinod Khosla just bought the Seattle Seahawks. These guys, all these big tech guys are basically taking bets that anything human, that AI can't displace, anything nostalgia or sort of like cultural zeitgeist related will rip. In the age of AI where knowledge and basically software becomes commoditized, you want to own the assets that can't be commoditized by that, like sports teams or collectibles. To your point, actually I would love to. Here's a shameless plug. One of my buddies knows the number one trader of magic, the gathering cards in the world. He's got his warehouse somewhere in I think it's Georgia. Anyway, I would love for you to interview him at some point if you're willing to. Needless to say, I agree with you. Just, just another quick thing we, we promised our listeners in the Thousand X Nitro Delta Avengers telegram room, which you should all join.
- [44:16]
A
Yes.
- [44:16]
B
If you haven't talk about the.
- [44:18]
A
If you haven't joined the Telegram chat, go to our YouTube link, click it, look in the description, join the YouTube chat, subscribe to the channel, remember to like. That's going to really help us out.
- [44:31]
B
Yes. And also use our terminal, but quickly. We promised our chat room that we would talk about the Clarity Act. Should we do that at some point before we forget.
- [44:42]
A
Yeah, we should do that now. So what is happening with the Clarity act is that it's being held up by ethics issues. Elizabeth Warren, our favorite Indian, is trying to kill the Clarity act and she's injecting all these ridiculous, ridiculous asks. And Trump right now is planning to meet with the Senate to get this thing overboard. I think the deadline is August 7th. I need to double check on that. It's sometime in August. And what I think is going to happen here is it's, it's very, it is unlikely that it passes, but that doesn't necessarily mean it's bad for the markets. And that's because the markets are already pricing it. I think at 11 in 4, there's a 1 in 4 chance that clarity is going to pass. Now circle is kind of priced as if circle is off a lot already. I think if clarity doesn't get past, it probably goes down less than if clarity is past goes up. Right. And so I think I, I, I, I basically think that it's, it's actually like pretty unlikely that clarity gets passed, but it could set up for a good trade on circle. If you feel like you can get like what I would do to generate, to quote unquote, generate edge. I haven't done this, but maybe somebody in listeners will, will do it like go through every senator and try to get like your probability of whether they're going to vote yes or no on the Clarity Act. I mean, this is, this is how edge is generated. Sometimes you guys ask us, you know, where, how do you generate edge in the markets? This is spend four hours like going through each senator and assigning them a probability that it passes and see if you can come up with a different, like a vastly different result than, than the market is pricing right now. Now, if the Clarity act passes, that's obviously going to be very, very, very bullish for stable coins specifically, and it's going to be bullish for defi now if it doesn't. I also think that that's not necessarily the, the worst thing in the world because kind of this token, this tokenization stuff is moving forward sort of no matter what. The big institutions will find a way to issue stablecoins. They're going to find a way to issue products with or without clarity. They're waiting on whether clarity passes or not to figure out how to structure it because it's kind of a waste of time to structure and push out a product if, you know they're sort of two design choices. One is if clarity passes, one is if Clarity doesn't. And they're waiting for Clarity to be over, to pick which direction to go into. So I actually think that kind of, no matter what, post Clarity pass or not pass, we're going to see an explosion in tokenization. We're going to see growth in stablecoins, we're going to see new products coming out. The real question is just like, is it going to be good for crypto or not? Like the crypto assets specifically, is it going to be good for Defi specifically? And the answer is, the answer is obviously like, yes, if, if, if it passes, it's, it's going to be very good for the things that aren't tied directly to your Robin Hoods of the world, that aren't tied directly to your institutions of the world. But like, for example, Robin Hood's going to move forward with some of this stuff regardless of Clarity or not. And Unis Swap is integrated with Robin Hood. So post Clarity, actually maybe Uniswap's supposed to go up because they're going to move forward on their plans anyway. That, that's, that's my take on clarity.
- [48:20]
B
I would, I think that's really smart. The last thing that you said there about we just need to get past it rather than it like the outcome actually mattering. Here's, here's what I think though.
- [48:30]
A
I think that was the rest of the stuff.
- [48:33]
B
No, it was all. No, I like it. Basically, here's my take and it's sort of like similar to yours. I think that if Clarity passes, it's very bullish for your coins and your hoods of the world. And it's also bullish for a lot of companies like JP Morgan. You know, it's bullish their bottom line as they can build RWA tokenization channels, but basically like, there aren't many ways for the retail user to profit from that other than just like owning the highest upside kind of crypto native tickers, galaxy hood, whatever. Like people who will be, you know, most levered to the construction of pipelines between things that, you know, economic activity on chain and economic activity off chain, off chain. If Clarity doesn't pass, I think what we should expect is a period of limbo similar to what we saw before Donald Trump got elected. And I think that that will just create general malaise in the, in the sector, similar to how it was during the final two years of the Biden administration when Elizabeth Warren was running rampant against crypto companies. So let's say that Robin Hood pushes boldly ahead after Clarity gets rejected. Let's assume Clarity gets not passed and Robinhood sort of forges ahead with some efforts. That's okay, but it's probably like, I don't think you expect Robinhood stock to pop much against the backdrop of, like, regulatory opacity and limbo. I think you. I think basically, like, if Clarity doesn't pass there, there's not much to do, which I have a slightly more pessimistic take, basically. Like, I wouldn't expect Uniswap to RIP once Clarity gets voted down. I do think you'll get some rallies in both crypto assets, a few select altcoins as well as the big sort of, let's call them crypto harnesses like Hood and Coin are sort of like harnesses for lots of different economic activity going on under the hood. Like, no pun intended, including stablecoins, rwa, tokenization, whatever. And, you know, let's say that tokenization becomes a thing and like Fidelity and Schwab and JP Morgan are all doing it, you can't really benefit as a retail investor. And there are only a few harnesses that allow you to participate. And sadly, without Clarity, I don't think we're going to get those rallies. I think you need, like a Cambrian explosion of opportunities to connect what's on chain and what's off chain in order for there to be an investment thesis. And those opportunities have to be crystal clear. So I have a. I agree with you on the bullishness. If it gets passed, I, you know, humbly would push back on there being anything to do if it doesn't. And I think that kicks us through to the end of the Trump administration. There's going to be even more uncertainty in the future. I'm just. I'm a little sad about how the Trump administration has handled crypto in general. There's so much opportunity to do it right.
- [51:48]
A
It's become toxic. Right. For him.
- [51:50]
B
Yeah. Which is sad because he just mean coin. Yeah. Like what? What was he thinking? Like, just. Just do it the right way. Besant had a good plan anyway, Whatever, right. It actually.
- [52:06]
A
Trump launching his meme Coin is one of the reasons that I started to get out of crypto Smart. Once I saw that the President of the United States was able to effectively use crypto as a tool for enrichment for himself, I realized that there are a lot of bad downstream effects of this industry and that you need to be honest with yourself about it. And it. It really soured me a lot because it felt like the final twist of a knife into an industry that I once loved. And don't get me wrong, there's still a lot here that I'm obsessed with and that I think is going to change the world. But man, was that tough to see. I guess we can, we can probably wrap there, but what.
- [52:50]
B
Hold on, let's wrap on one more thing. What do you want to see, like out of crypto? I have my ideas, but what's your. Like what, what did you want and what do you.
- [53:03]
A
I want to see permissionless, non sovereign digital currency take over the world and become part of everyone's everyday life. And bitcoin is no longer that. It's an investable asset, which is great. It's good, that's a good thing. But we sort of forgot that actually in the beginning a lot of it was like, let's create this cipher punk currency. And that's kind of why I love zcash so much, because I think zcash could be that. The only issue is that we got to drain the shielded pool to make sure that there's not an infinite amount of supply in there because of the bug. But once we do that, I think Zcash could easily hit four figures. I think we could see $5,000 ecash in the next 10 years. I want to see. I want to see crypto rails be instituted everywhere. I want to be able to hold everything in a wallet. I want to actually own the assets, not in a brokerage account, but in a wallet that I can go take with me if I need to flee to Thailand or Cambodia.
- [54:01]
B
I think bitcoin does that for you. You don't need bitcoin, Bitcoin does.
- [54:05]
A
Bitcoin does that. But Z Z Cash I think is probably a better expression of the privacy aspect of it, obviously, because prior to bitcoin got de anonymized a long time ago. And well, a big part of what bitcoin used to be is not only portability, but it was a Swiss bank account in your pocket. And zcash is the only thing that fills that now. Zcash is the Swiss bank account in your pocket. And there's actually kind of huge implications there. And I want to see, like, I just want to see the world of finance. I want to see the walls break down. I think one of the beauties of crypto is because of the way that it's built, anybody can, if anybody can plug in and access underlying liquidity on a chain or on an app, then that means that there's going to be tremendous amount of competition. And that means Our financial products are just going to get better and better and better way faster, right? If anybody can spin up a front end for trading and use an underlying liquidity pool, that means the front ends are just going to keep getting better and better and better and they can be tailored to your specific use. I think that that's the beauty of crypto is it was a massive free market where innovation would, where innovation would occur. And I feel like that is not the ethos right now. Like, I love the defi. I love the feeling of defi somewhere where everyone's trying experiments. Now a lot of those experiments are grips, but some of those are real. People seem to be experimenting less these days, which is ironic, Jonah, because it's actually easier than ever from a regulatory perspective to experiment. I mean, if you were building financial products in 2021, you're actually putting yourself at risk. Now you're not. Come on, where are inventors? Where are experimenters? Get after it. Do something.
- [55:57]
B
Yeah, get after it. I mean, honestly, like it's also not just a regulatory perspective the best time to build. From a technology perspective, it's the best time to build. Like back in 2021 if you wanted to do anything, you needed to hire a team of solidity devs. Now it's like you and Claude Code can build something really valuable and everybody right when it's the best time to build is when everybody's freaking capitulating. Here's why, here's what I envision for crypto. I think with a little bit more clarity, pun intended. This time with a little bit more regulatory clarity, you unlock what I think is crypto's greatest value at which is crypto can move val move non pegged and pegged, but mostly non pegged value, which is where the world has a big problem today. Non pegged value around faster and more seamlessly and more efficiently than anything else. So I ate gatekeepers. I hate the fact that middlemen control so much of the world's access to capital, liquidity, hedging and markets based opportunity. You know, to borrow my old Bob Don Wilson's truism, markets solve problems. But people extracting rent from those problems in markets like the cme, ice, nymex, creating all these barriers to entry, all these informational and financial and qualificational barriers to entry, they make things worse for everybody. So I think that the beauty of an aerodrome, a uniswap, whatever name your amm, a hyper liquid. They basically open the floodgates to new markets being created, new commodities markets. I want to See tokenization of commodities. I'm a commodities trader. I want there to be a market for rice where the Bolivian rice farmers trade with the Indonesian rice farmers. And you know, like I want, if you want to, if you run a small business and you're, you're dependent on local weather, you run a local ice cream shop. You know, the old climate Corp. Thesis. Like I want to see people hedging their weather derivatives on, on chain because it's, it's not a big enough market for, you know, a CME or an ICE to list it. And there's, even if they did, the barriers to entry for the local, you know, insurers or restauranteurs to, to have access to it. But like crypto can solve all of these problems. The, the issue is just, it's a matter of regulatory clarity and capital access and products to be built along these, you know, brand new rails. And we're just, I don't know, it feels like we've been tantalizingly closed for five years. I don't want to throw in the towel or give up or be pessimistic, but it's just hard when the very same rails that allow these economic unlocks are also really good rails for facilitating grift and crime and extraction and dollar sign trump. So hopefully people don't abandon the asset class altogether because of the negative outcomes that we've seen in recent years.
- [58:57]
A
I think that's a beautiful place to end it. Jonah, as always, this is a ton of fun. Love you.
- [59:03]
B
Love you, brother. Talk again soon.
- [59:06]
A
We'll catch up soon. Adios.
- [59:24]
B
Nothing said on the Thousand X podcast is a recommendation to buy or sell any any investments or products. This podcast is for informational purposes only and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of one KX Media. Our hosts, guests and the One KX team may hold positions in the company's funds or projects discussed.