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The Wolf Of All Streets
Crypto in FREEFALL! US Trade War Sparks Panic | Crypto Town Hall
01:04:37
Crypto in FREEFALL! US Trade War Sparks Panic | Crypto Town Hall
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- [00:01]
Scott
Good morning everybody. Welcome to Crypto Town Hall. 10:15am Eastern Standard Time every single weekday here on X. And wow, what a day, what a weekend. Before we get everybody up on stage, I know people are still filing into the room, but some pretty astounding numbers when you take a look at what happened this weekend. And very interesting to see how disproportionately the altcoin market suffered versus Bitcoin itself over the weekend. Actually some pretty historic numbers being reported by coin glass was $2.2 billion in liquidations in 24 hours. Which would be more than after the FTX collapse across the board. More than the COVID collapse across the board of course is notional. These are like not percentage based versus market cap, but still 2.2 billion being the largest ever. And Ben Zao from Bybit, the CEO tweeted if you guys missed this, I'm afraid that today real total liquidation is a lot more than 2 billion. By my estimation it should be at least around 8 to 10 billion. This is the CEO of Bybit. FYI, Bybit 24 hour liquidation alone was 2.1 billion. As you can see in below screenshot, Bybit 24 hour liquidations recorded on coin glass was around 333 million. However, this is not all for liquidations. We have API limitation on how much feeds are pushed out per second. From my observation, other exchanges also practice the same to limit liquidation data moving forward, Bybit will start to push all liquidation data. We believe in transparency. So looking at across exchanges, obviously Binance doing more volume than Bybit. Yes, 8 to 10 billion dollars in liquidations in 24 hours. What was interesting this time obviously was how disproportionately heavy that was in the altcoin market versus Bitcoin. There's a lot of reasons this happened. Nobody could panic sell their stocks when tariffs were announced this weekend as we often see when bad, quote unquote bad depending on how you view it. News for markets happens on a weekend people sell their crypto because they can and they have no other option often. But this amount of liquidations in 24 hours and it being disproportionately altcoins. Absolutely astounding to watch. Alex, I mean what'd you make of what was happening this weekend? Obviously I should say things are bouncing nicely right now. I think that's because people realize that tariffs are probably a negotiating tactic. Cratering, cratering yields. 10 year yields started the day at 4.56, they're now at 4.46. I mean astounding Move down and bitcoin almost back at 98,000. But Alex, unpack this a bit.
- [02:47]
Alex
Yeah, I mean, I think to the point of view, time out all the liquidations that hit. I think, you know, crypto is obviously an extremely leveraged and levered industry and trading market. And so I think especially on the weekends and you know, this all really hit what, late in the afternoon Eastern. So you have a bunch of people in Europe and Asia who are already asleep. So I think the market very much tends to oversell in part due to the liquidations that hit. And then you wake up the next morning, people have kind of restrategized, pulled more, deployed some more capital in to buy the dip on things. And so this just feels like a very, very familiar pattern to me in terms of what happens with the selling. And then, yeah, like look, there's still obviously, especially on the alts in, in terms of alts versus bitcoin, like they're always, you know, I think the most interesting thing is, you know, the bitcoin dominance chart went through the absolute one.
- [03:42]
Scott
That was the largest move I personally, I think two or three day period have ever seen on bitcoin dominance. And that's even. Everyone looks at bit dominance with stable coins. If you take out stable coins, which you should, it's even larger. But I mean it started, just started interrupt. But just to give people some data, Saturday, Bitcoin dominance was 58.59% today at the peak, which is, you know, today in 24 hour terms it was 64.34. So a move in Bitcoin dominance for basically 58 and a half to 64 and a half now back to 61.
- [04:12]
Alex
I mean I've never, I've never seen a move like that. I mean 6, 7 percentage points in an hour or two is absolutely crazy on it. So flight to quality. Flight to quality, as we always like to say. But I think the, yeah, like it's just, look, the markets do not like uncertainty and instability. And if you go over and you look at, you know, public markets right now, I think Dow's off a percent S&P is off a percent and a half and the Nasdaq's off 2%. So I think just until people know how much of this is a negotiating versus a leverage tactic and how it's all going to play out and you know, we're just going to kind of be hovering around and I think seeing a lot of this same fun up and down action.
- [05:01]
Scott
By the way, the bitcoin candle right now is Currently green on the day, bottomed at 91,190. Currently trading at 98,000. Yet another massive, massive wick down on news for bitcoin before heading back up. I don't know how the day will close, but that is astounding.
- [05:20]
Alex
Yeah, I will say one other big surprise to me. Even Trump Coin wasn't immune to the drops. Who would have thought that Trump Coin wouldn't be the most resilient crypto out there? God, surprises every day.
- [05:33]
Scott
That's crazy. I haven't checked Fart Coin, but you gotta imagine that was a good store of value. This is sarcasm, people. Sorry, I forget that it doesn't always translate. Cena, go ahead.
- [05:43]
Cena
Hey guys, good to be back after a while. Yeah, definitely Interesting weekend, interesting day, very fun to see. You know, the, the tokens that, you know, people aped into for massive gains actually did not, did not perform well and they. This is one of the worst days I think collectively for the, for the liquidations. Now, I mean, I've been saying this for a while, that this is exactly what we expect from the tariffs because essentially to quickly explain the mechanics, when you put on tariffs, if they are sustained and if they're not, an economic, just a negotiation tactic, what you expect is the imports to be hampered and export of the dollars to be hampered. Right. So hampering the imports causes the, the price of production input to go up. So that's inflationary, less dollars exported. That also means shortage, global shortage of dollars for the world, which causes the asset borrowers, dollar borrowers around the world to have to sell financial assets to raise dollars to pay back the debt. Both of these actually cause crash internally and externally, globally in financial markets. So this is exactly what's expected and to the point that was raised earlier because tariffs actually are destructive for both sides, but definitely a lot more for the other side that's more dependent. Pretty much every other country is heavily dependent on the US economy. Mexico, Canada, they just can't resist these. Right. So the hope is that with a little bit of hurt to our economy and a lot of hurt to their economy, this will be short lived and be as an effective negotiation tactic, which seems to be the most likely path if that's the case, we're going to see a significant rebound. So it all depends. Yeah, it all depends on how the politics go. But if you just look at the economics, these actually should cause a significant weakness across the world.
- [08:03]
Scott
Yeah, we can unpack the tariffs a bit more obviously, the COVID being fentanyl. I've been Engaged in a debate on YouTube this morning and on X with people. I posted the actual stats on fentanyl, which of course apparently makes me a drug dealer and that I want to kill all Americans or something because I minimized the amount of fentanyl that was coming into the United States. Comments on X are astounding. I can't believe that people function and get through their days that I interact with on this platform. But what I said here, just so you guys know, on, on the, the fentanyl obviously was the COVID for 25% tariffs on Canada and Mexico, but only 42 pounds of fentanyl came through the northern border last year. It's 0.0001% of the fentanyl that came into the country. Literally 42 total pounds of, I think 29,000 total pounds, 88% came through. The Southern people quickly pointed out that 42 pounds can kill 9.5 million people and that I'm a horrid person. I pointed out There are only 107,000 total, which is awful, by the way, drug deaths in the United States last year and the 29,000 would kill the population of the planet like 50 times over. So obviously the 42 pounds is not going to kill 9.5 million people. Point being, guys, I think Trump was using the tariffs as a strong arm tactic to show Canada and Mexico that he's serious and wants to be negotiating from a position of power. So I'm not saying it's good or bad, but the fentanyl thing, as far as Canada is largely an excuse. I'm assuming markets today maybe are bouncing because people realize that we'll probably see that backtracked or negotiated down today. I mean, what do you guys think, Bill? I mean, what do you think of the tariffs here? Hey, sorry, go ahead. Yep, no problem. I put you on the spot.
- [09:58]
Bill
Yeah. So look, my take is, is that we have an administration now that's basically conducting a war against stupidity. And so far they're winning. And you know, I think they're not going to get it 100% right. They're going to do some things that some of us wouldn't do. I, I, I'm sure most of us wouldn't unilaterally initiate tariffs against, you know, our allies. But I actually think that this is a win for the United States. I think it's going to result in fair trade long term. I also think the liquidity is coming either way. I don't think that tariffs are going to hurt or help necessarily on the liquidity. That's coming. I think, you know, 1.1 trillion in interest payments is already guaranteeing that that's coming. And so you know, as, as you and I well know that liquidity is generally a boon for risk on assets. There may be a rebalancing in terms of, you know, the AI play on the equity side. But regardless, I do think that liquidity is coming and I think, you know, come and I've been saying this for a few weeks. I think probably, you know, alt season is, is late. Q1 Although I didn't expect the overnight capitulation we had. So it is possible that alts dominance.
- [11:28]
Scott
Sorry, sorry, don't mean to interrupt. We do have breaking news. I'm going to let you continue. Mexico's president says tariffs are paused for a month from now. Mexican President agrees to deploy 10,000 National Guard to US border to combat drug trafficking. So there you go. If you're wondering what I was saying, if he was using as a strong arm tactic to get what he wants. By the way, great negotiating, but there you go.
- [11:50]
Bill
Yeah, totally. And it's, it's brilliant. You know, I mean there was never. He shoots way above the mark knowing that there's a negotiating tactic. And that's not how politicians think. And so, you know, they all get their, their panties in a bunch because they can't relate to the way the man thinks. And, and you may not like the way in which he messages things or, or that you may even like the man personally, but you can't argue with the fact that he's doing exactly what he said he's going to do. There's no ambiguity in what he said he was going to do. And he's surrounding himself with a much, much smarter, more capable group of people this time. And I can't help but think it's going to pay huge dividends for us down the road. But independent of that, you know, the most important thing as it relates to crypto is, is the liquidity is coming and it's, the liquidity clearly troughed in December. It's on the upswing again. I think the rebalancing is, is happening in AI and you know it's going to be game on for, for alts in, in like I said, it may have even troughed overnight which happened faster than I expected. But you know, it is possible we have another leg down. But I do think that bitcoin dominance has either peaked or is close to peaking. And you know, I think it peaked at 70% last, last cycle and I think it's it peaked at 65 overnight, which was a big, big move. But then it came back down very quickly, which is very interesting.
- [13:20]
Scott
Right.
- [13:21]
Bill
And, and so, you know, we'll see in the next couple of weeks if I'm, if I'm right. But, but I've made my bet. So there you go.
- [13:30]
Scott
Peter. Peter, if you can lift your mic, butcher your name, I apologize. Okay. Yes, there was no worries. Yeah, no nice to be up. Thanks for that. Trump is a man who lost over a billion dollars between 1985 and 1994. He is someone who's not exactly been the most effective businessman despite being born into huge amounts of wealth. So I wouldn't necessarily use him as the basis of the best business decisions. I'm not a, I'm not going to talk about crypto in such a specific level. Mine's more than macro. You need to look at history and what happened in the 1930s and what happened with the, the US economy after the. Well, just look up the Smoot Hawley Tariff act and then you might have an idea of the extent to which tariffs are an effective policy tool. Now can I appreciate that they have a role in encouraging domestic production and a return of sort of resurgence of say, manufacturing and other potential specific services? Sure, I can appreciate that. But that's a long restructural process, doesn't happen overnight and certainly not within a four year term of a US president. So. Yeah, go ahead. Sorry. No, that's one point. The other point is that this isn't just about economics. It's about what it does to the US's alliance network, what it does to the geopolitics. I'm not turning this into geopolitical space, don't worry. But that is a factor which affects things from traditional fiat to crypto. Right. It affects the way the different countries which have different relationships with one another and then how they engage and that does to the markets. So to sort of look at what's happening now, yes, his strong man tactic, his strong arming of the Mexican has worked, but it's not going to work with the Canadians. And the United States is going to have a tough time going up against the Canadians, the Europeans, the Chinese, the Russians as well as Canada in the long term, if Trump decides to follow through on tariffs, even more so I think you need to consider longer term than just right now. It's going to benefit us in the short term. Well, yeah, I mean also it's clear trust. Right. You said it should, that there's an argument and I think Times are different now that it helps, you know, domestic jobs and manufacturing, things like that. But we live in a much more global world and the materials for most of that domestic manufacturing come from outside the country. Right. So the tariffs in this case, and like I said, I think it's a strong arm tactic, but tariffs in this case are likely to actually increase the cost of creating goods in the United States and manufacturing here as well. Just how it is. Right. Anyone else, any specific thoughts here on the tariffs and market is bouncing very nicely right now, I think, on that Mexico news. Bill. Alex. Bill. Alex and Bill.
- [16:21]
Alex
Yeah. So this is what's so freaking weird about the mixing of the fentanyl issue and the tariff and manufacturing issue. And to be clear, it was done that because the tariffs that Trump's putting on Mexico and Canada are illegal. We have treaties with both of those countries. And so the only way that he can put them on is by drawing it to national security. So, like the entire fentanyl thing is kind of a red herring that's necessary for him to have just enough legal coverage to get it done. But at the end of the day, and I think this goes to what someone else is saying is Trump's a marketing guy. It's what he does. He's looking for headlines, political wins, and he'll, he'll probably get them because he's very good at it. But like the entire idea, this whole thing's kind of nonsensical, right? Is, and you see this in how a lot of people who are supporting him are talking about it, talking about how this is going to lead to the resurgence of American manufacturing. Except 24 hours after putting the tariffs on, he's now agreeing to pull them off because the Mexicans are sending 10,000 troops to the border, which may or may not, they may or may not actually do it. May or may not actually lead to anything. Again, Trump's not going to really care whether it does because it is going to get the headline of the Mexicans are the Mexican government's doing what he wants them to do and getting troops to the border, whether again, that actually happens or not. But how is that going to help American manufacturing? And again, you go back to what people were saying yesterday is it's going to lead to this resurgence. It's going to do that. So it's, at the end of the day, it's just about what looks good on a headline and makes the current admin look stronger, I think, more than anything else.
- [18:06]
Scott
Bill.
- [18:08]
Bill
Yeah, look, I believe that the numbers in history Just don't play out this, this inflation narrative. I think if you look and dig really deep into the numbers, we just don't have evidence that tariffs have really led to sustained inflation. If anything, it's, it's the opposite. So I think there's this thing over the history of tariffs and, and it's very easy to do, you know, what seems like on the surface, simple math, but people really aren't digging in to structurally how this works. I have a friend who works in an import business for low cost appliances and she walked me through the math and basically said, yeah, there's a lot of dumping going on that she has to compete with. And when we instantly instituted those tariffs versus China, it did not lead in her world to any significant price inflation. It just led to them stopping the dumping because it just wasn't cost effective even to dump anymore. So I don't know. I think that there's a misunderstanding. I get the argument about fentanyl, I get in the border and drugs and I just don't think it's as simple as that specific negotiating tactic. I mean, I think they're going to talk about it, they should, but I just don't agree with the inflation narrative. I'm confused. If they stop the dumping, which, which means that they were selling stuff below cost and now they're selling stuff at a higher cost, how does that not lead to inflation? Because, and consumers were not benefiting from the dumping is what she was telling me. And so all you're basically doing, I thought by definition dumping means you're selling at low prices and you're telling me consumers, consumers historically were not benefit. So in other words, what I'm trying to say is, and maybe I didn't say it as cleanly as I should have, if you look at the prices consumers are paying for the products that were being dumped, there significant increase at all in those products once the tariffs came, came to, came to pass. And then you have to ask yourself why is that, how is that possible? Well, it seems to be possible because the wholesalers were keeping the delta on. In other words, they were marketing things up as if they were not being dumped. And they were keeping the difference in many instances because you know, they could. Right. And because the US Products were being fairly priced. But the bottom line is, is if you go look at the inflation numbers from Trump's first term in China, they did not lead to significant price inflation. The only price inflation during Trump's first term came when we had supply chain disruptions during COVID and That makes sense. Right, but, but I have no evidence in my long lifetime that tariffs have led to significant price inflation.
- [21:15]
Alex
We're also talking about an unprecedented level of tariffs here. Like, even during Trump's first term, they were much more specific, targeted tariffs on one country.
- [21:25]
Bill
That's very fair. But regardless, I agree with that point, but we've never seen even broad tariffs lead to price inflation. We may not have in our lifetime as much history, but you got to remember, the United States built on a tariff. We're not built on an income tax model. And we survived just fine. You know, and, and there was a price to do business with, with the United States. And, you know, if. My guess is, is if it causes an absolute disaster from an economic perspective, they'll reverse course, but I'm willing to bet that that's not going to happen.
- [22:05]
Alex
Yeah, but if it causes an issue, it's not like this is an immediate feedback thing. It would take. It takes time for that to resonate in, just like we saw with the supply chain disruption in Covid. And I think that's the danger to it. True.
- [22:20]
Bill
But real price inflation is coming because of the liquidity that we're going to be pumping into the system. So people may misallocate that inflation to these tariffs, but that's not really what's going to be happening.
- [22:30]
Irritated
Right.
- [22:31]
Bill
Remember, we're still basically paying 1.1 trillion in interest payments, and we have to print that money. That's the problem.
- [22:39]
Scott
Right.
- [22:39]
Bill
And so if we don't get that under control, it doesn't.
- [22:42]
Alex
Tariffs are irrelevant, but they're not irrelevant if they make it harder to get that under control. Right. And this is where things are very, very much dynamically interconnected with each other in, again, similar ways that we saw with the COVID supply chain disruptions. If we start marking up all of the costs of goods, and especially of, you know, the predicate goods that make up the feedstocks, that make up the things that do get built here, it will drive up our costs overall. It makes it harder to do business, it drives some manufacturers out of business, which reduces competition, all of which continues to gradually over time. You know, I'm not worried about the price of all goods jumping 30% tomorrow, but where the prices of things are in a year or two, how many manufacturers are able to stay competitive on it? Like, this is just, I think, a fact of where the world economy is and where the US economy is now versus 100 or 150 years ago. We could go back to building more things here, but it's going to be an exceptionally. If someone really wants to do that, and especially you're trying to do it this way, it's going to be a really painful tenor 20 gear transition. You can't just snap your fingers and make it. And I think in a lot of ways this actually looks to me like, if you want to look at it, the other side is a lot of the criminal justice reform movement coming from the left. I think they're actually potentially correct about what a better criminal justice system could look like in the long run. Problem is there was no way for them to get there without like 10 or 20 years of really up a bunch of cities by pulling back off of a lot of enforcement. And we've seen how that all ended there and it was kind of.
- [24:40]
Bill
I think the war on, the war on libtar driven cities is coming in my opinion, but that's a completely different topic. I still take the other side of this inflation bet. I mean if I look at the speed at which Japanese companies and German companies set up shop in the US when, when BMW started manufacturing in the Carolinas and, and Toyota started manufacturing partially in the US it was incredible the speed at which they did that knowing that if they didn't they were going to lose significant market share. I think you're going to see a huge number of Canadian companies setting up shop in the US And I don't know how Mexico is going to deal with this, but certainly from Canadian perspective and they certainly have more to lose than we do. So I'm willing to take.
- [25:24]
Alex
I will say Canada has way more to lose in this war than we do. If you just look at percentage of GDP that comes from exports to the other country, there are.
- [25:33]
Bill
Yep, totally agree.
- [25:35]
Alex
But that also means it's a lot more existential for them and they might be willing to fight harder on it.
- [25:39]
Alon
So, so, so talking about speed. Hey guys. Is a lawn. I'm just jumping in. Great to see you, Bill. I was. My app is actually screwed up and it still shows you as a listener. And I was going to chime in and say Bill's in here, he's got to talk about this.
- [25:53]
Scott
Yeah, you're, you're, you're who I follow for this. So it's the same permanently.
- [25:58]
Bill
Space is just don't worry about it.
- [26:02]
Alon
Well, if you have no opinion, we're all fucked. But where I was going to go to talking about speed, setting up speed of manufacturing and all that is, is you guys are having a killer debate about the long term effects of this stuff. But we just saw over the weekend what 24 hours can, can, can do thanks to the crypto market. Right. The traditional world closed off. So everybody is, is waiting for Monday morning essentially, and we're just rocking and rolling here. And it's less today than we used to talk about. But you guys remember a few years ago at our conferences, people would be talking about how there's no liquidity in our space. It's all magical Internet money. It's all bullshit. And what we're showing and proving every time something like this happens is how actually mature our space is. Even if you look at the alts and, and how hard they dumped and everything else and how liquid our is. And that was for many years the biggest, you know, sort of criticism of our space is like, this isn't real. It's not actually liquid. But when people are scared, they sell their most liquid assets.
- [27:13]
Simon
Right?
- [27:13]
Scott
And guess weekend you can only sell your liquid.
- [27:16]
Alon
Exactly. And, and, and so to me, as a, as the one or Lou also, but as, as a person who primarily on this panel focuses on investing and equity investing in our industry from that standpoint, I'm stoked. It really sucks for, for a moment, but like the, the Mexico announcement just happened. Give it a few minutes, we're going to be pumping again. And I'm, we're, I think we're all a little bit callous to, to the space doing what it does. It's just doing what it does. And you know, this kind of swing is, is less and less. You know, it hurts less every time.
- [27:53]
Scott
And I'm, I'm holding anyway back at 99. Bitcoin's back at 99, by the way, which is, you know, pretty crazy judging by where we were this morning. I will say though, alon, this was disproportionately when we see those liquidations and all of that liquidity, this was the most disproportionate it was to Ethereum and Altcoins that we've ever seen. It could actually that market is now very liquid.
- [28:15]
Bill
But is that really true?
- [28:17]
Scott
Yes, from what I saw. I mean you can only look at Coinblat, Coin Glass, which obviously, like as Ben from Bybit said, with the liquidation data is a bit lagging. But according. Yes, I mean it was like, it was like less than 30% bitcoin on the liquidations in total.
- [28:35]
Alon
I spent a little time over the weekend.
- [28:38]
Bill
March. That day in March, that. Sorry, that day in March during COVID when we, when we had that kind of trough on, on so Like I.
- [28:46]
Scott
Said, I don't know. I haven't looked at percentage of market cap. I'm not sure in total, like amount of liquidations. By far the most, more than ftx, more than Covid, but obviously the market's much larger. Market higher.
- [29:00]
Bill
Yeah, right.
- [29:01]
Alon
I was in touch with one of.
- [29:03]
Bill
Our percentages and I would, I would bet. Sorry, Ellen. I was just saying I would bet that March of, Of what was that? 21 was 2020.
- [29:10]
Scott
Whatever. Yeah, 2020.
- [29:11]
Bill
It was.
- [29:12]
Alon
It definitely had to be worse. Yeah, it definitely had to be worse percentage wise of market cap.
- [29:17]
Scott
I think Bitcoin went 6,000 to 3,000, back to 6,000 in 12 hours. Right. So a 50, that was literally. I mean, it was like a 48% cut in Bitcoin market cap, but market cap at 6,000.
- [29:31]
Alon
Yeah, we didn't think so at the time, though. Isn't that great? I. I hope that we look back on today and go, you know, 100, 100K Bitcoin, that was nothing, man. I can't believe we were so worried. But I was in touch with one of our portfolio companies, Dolomite. They have a dex. They had a bunch of liquidations and it, you know, I was more weird from the technical standpoint. All went smoothly, did exactly what it's supposed to do. Right. And that's what's exciting about our market. It's like literally, you know, an announcement can happen. Bitcoin can start moving up all the, all the pools can start growing and everything will. Will happen. You know what will happen? I'll get pitched about 20 companies this week about how to create some kind of on chain insurance against liquidation. So that'll be fun.
- [30:19]
Scott
Nobody should ever get liquidated, by the way. It's just astounding that people don't use stop losses. Liquidation is not a stop loss. You lose more money, especially because of the way that the insurance. I mean, it's just don't get liquidated. Use a stop loss. Even if you just put it a few bucks above the liquidation point, it will actually save you money and you'll lose less money on the liquidation. People are so dumb and bad at this.
- [30:42]
Alon
Well, yeah, it turns out people aren't so sophisticated, and it turns out most people are very greedy.
- [30:51]
Scott
Yeah, absolutely. So we have a few people on stage that haven't really had a chance to throw in their thoughts. Irritated, Gordon, Irritated. Go ahead, jump in. Take it however you want it.
- [31:02]
Irritated
Hey, guys, good morning. Really good conversations happening on the stage. I'd say, like, we see a lot of People on the feed right now that are getting upset, you know, comparing this current crash, quote unquote, to what happened in Covid. But I say it's the same thing with tariffs. Like, it's really hard to say what's happening now with Trump's new ones because the entire financial landscape has changed. Like back in the day, we saw tariffs mostly impact physical goods and raw materials. Now, global supply chains are all interconnected and a tariff on one country's export can disrupt, like the whole production across multiple industries. And then also now, why I think it looks different is because we have Bitcoin, stablecoins and, you know, other cryptos and things like that didn't exist in previous trade wars. So if tariffs do in fact weaken the dollar, we, you know, people can pivot into more speculative assets like crypto as a hedge. I don't know. And then I'm also thinking about how central banks operate. Governments have way more aggressive monetary policies and printing money. So I wish the market would react less to this type of news. I don't know. I just ponder about that a lot, is like, how are we less reactive? Because I felt like that dump was so unnecessary because the dollar hasn't been strengthened yet. Yeah, we saw the DXY go up, but we don't know what that. Long term. Sorry.
- [32:19]
Scott
Yeah, it's, it's basically, I'm just going to say DXY went from. It was this morning, 1085, it went all the way up to 1099. It's all right back to 1087. So like you said, I mean, it's just a very temporary thing. I think it's really just a story of too much leverage in crypto. As usual, it's the weekend and so people can only deal with their crypto portfolio and not their core portfolio. And I mean, we were another one of these points where we had a very clear amount of froth. Like when we're talking about Trump coin and fart coin more than we're talking about Bitcoin, it's usually a signal that there's going to be some sort of, some sort of wipeout. Ak, go ahead.
- [33:00]
Irritated
Yeah, thanks for having me, guys. I mean, I think that you're right in terms of the world being over leveraged in crypto. I think that's been the case for the last month or so, or maybe, maybe even from Christmas, you know, early December, coming into the new year. A lot of, a lot of the, a lot of the participants were obviously very, very bullish on Trump's new administration. His policy and obviously, you know, the ability to push the legitimacy and the ability to hold crypto. What a lot of people may be mis calculated was him dropping a, a meme coin that sucked liquidity out of the market that was already over leveraged to some degree. Then furthermore, you know, that, you know, just to add a cherry on top, the guy drops another, you know, why his wife's token, which essentially, you know, it just, it smelt so stinky that, you know, people were either, you're either exiting your others to try to ride up this momentum or wave or try to protect some of the, the, the, you know, the downside on your other memes or on your other, you know, garbage coins. But unfortunately the whole, the whole melting pot cracked everything. So his coin didn't outperform any other meme coins also had a major liquidity leak or I said, I would say outflows. So it's almost like a double whammy in the market. I was actually on the night of the, the Trump token dropping, I was on the Mario show and I, I said, guys, this is probably it just stable up or go into bitcoin. Things are going to get really, really bad. And yeah, a week and a half later now we are in pretty bad shape compared to then. I'll tell you one thing though. I am very bullish. I think that these liquidations need to happen. I mean the monthly charts are awesome. I'm a technical analyst, so I just, I look at the charts more than anything. The monthly chart on bitcoin is great. The candle looks fantastic on the weeklies for a lot of these altcoins, to be honest with you, they're at a very, very much of an inflection point right now, in my opinion. I wouldn't buy so soon. I know that everybody here is really bullish in this Mexico news. I haven't just, I haven't fully grasped, but this wick on the weekly wick I just mentioned it earlier, is, is, is filled all the way to the bottom. And we're going to see how far up it can retrace. Now if it retraces above where the drop of the early start of the week has been. You know, Scott, I know you're a technical analyst and there are a lot of people here are that probably would look very bullish because it would reverse the whole move down and essentially start putting a leg up. But I don't think that's going to happen. Market structure right now is probably just filling up to the top for the digestion of the news. And then we're going to go back down to somewhere near where these wicks kind of, you know, stopped at the bottom there, maybe, maybe to the midpoint. So I wouldn't be so eager to buy personally, but I am very bullish. And if there's one thing that I know now is that that little move down that I think they wanted to wick down bitcoin to fix the. The weekly chart. I think it happened now. I think that we didn't. We don't need to go to 80k anymore. It might just fly to 140. So I am bullish. I think bitcoin is the best asset to hold by far. By far. And there's obviously a lot, a lot of opportunity when blood is in, is in the streets.
- [36:31]
Scott
But I was a buyer. Like, I bought, I tweeted it. Maybe it wasn't the most eloquent tweet. I think I said right at the bottom, I just bought bitcoin and eth because this shit or something.
- [36:40]
Irritated
I see that eloquent, is that?
- [36:42]
Scott
But yeah, I mean, sometimes was just so irrational. You have to buy something. Right. So I bought eth at 2150 and, you know Bitcoin, like 92 or something. 50. Yeah, for now. Yeah. Legend. Call me next week. Right. Who knows if we're sitting at 75 as Arthur Hayes predicts, it won't be. But there's just days where it's like, it's so stupid that if you're hitting the sell button, you've never been here before. Right. Go ahead, Simon.
- [37:09]
Simon
Yeah, I just wanted to say, look, if you're playing these swings with a small percentage of your bitcoin and you've got a whole stack of bitcoin that you don't mess around with in cold storage, then fine, no problem. But if you are seeing bitcoin as a mechanism for making more dollars and you just got liquidated out of a highly leveraged position because you decided to put your bitcoin and swap it for an IOU note with an exchange and then lever it up to the point where you could lose all of your bitcoin, then you are still a dollar thinker. You haven't got bitcoin yet. And so all of those liquidations, hopefully it was a lesson for some, or it was just a small percentage of people's bitcoin in which they want to trade and mess around with, then fine. But it. But to me, what we are witnessing right now is peak, peak, peak, peak centralization. That is what we Are. That is what this volatility is. America has hit a point where they're saying, we don't really care about congressional process. We need the emperor to save us and do whatever you want to do. We trust in your process and hopefully it's going to work out. And you had a plan. We voted for that plan. We want to be, you know, we want to move to isolation and America first. Okay, cool. He's executing that plan and, you know, then he's about to go after Europe. And Europe is meant to be a bunch of sovereign countries that will have their own fiscal policies. But the reality is everyone's going to look to the ECB and Christina Lagarde and that's going to be the most important decision. Then Trump's going to say, I want to get the price of oil down. I need to go speak to MBS in Saudi Arabia. And we're about to make all of our oil companies bankrupt in America by putting the price of boil down to $40Mbs. Will you go with that? And MBS will say, well, last time I worked with Putin and last time we worked with Xi Jinping. And China is going to say, yeah, put the price down. I don't mind if we get all of that cheap oil, it might mess up the Russian economy and it might not mess up the Iranian economy, but you go do what you're doing, the reality is China's going to sit there saying we can produce goods significantly cheaper. We obviously want economies to buy it. But if America, if Canada, you know, if Canada and Europe are no longer being treated well by their America first policy, you know, America won from the Ukrainian law and, you know, from the Ukrainian war, sorry, and Europe lost. Now Europe's going to be saying, you also want to say that in our most recessionary environment, where our economies have been destroyed, we've cut off all of our nuclear power, we no longer have essentially any type of manufacturing base. You want us, in our brokest moment, in our most indebted moment, to buy a lot more from America when those goods and those prices are going up, I'm sorry, the money doesn't exist. It's just not there. Unless the ECB is going to print it. Unless. MBS plays so look, here's the reality of the world. We have hit today. We have hit peak centralization, where the acts of a few people are going to determine liquidations and the movements of the market. There is no free market. The world is not a free market anymore. And bitcoin is a play of decentralization and there's less decentralization in all of the derivatives that sit around it in the crypto market. But bitcoin is the decentralized play that allows you to accumulate into these crazy decisions that our world leaders are making, and in the end is the only apolitical asset class that can actually give a lifeboat to all of these people. So if America doesn't want to, America's going to play bitcoin, but all of the different players are going to be playing bitcoin right now. And so it is the solution. And if you're disrespecting bitcoin to the point where you're exchanging it for an IOU and getting liquidated, where you have no Bitcoin, you deserve all the dollars, the euros and the yen you end up with and the debt that that takes you through. And that's what everybody needs to understand. There's so much leverage in this.
- [42:23]
Scott
If you didn't understand what Simon was saying, that was a very eloquent and long winded way of saying buy bitcoin. Right?
- [42:30]
Simon
You got it. You did it better. Scott.
- [42:33]
Scott
I nailed it. I nailed it. But he's correct. And I think that I also we just as a. That's breaking news. But I know that Trump now is going to be speaking with Trudeau at 3pm today. I saw. So we'll see if he also bends the knee. Other news. I find this very interesting. I pinned it above MicroStrategy ends 12 week Bitcoin buying streak. So they did not buy this week for the first time in basically three months. We usually get those announcements from Saylor on Monday and also Trump and. Or it might just be David Sachs. It was announced as Trump and David Sachs, but I think that might be David Sachs speaking tomorrow afternoon on how to make the United States the world leader in digital assets. So kind of a lot going on. Irritated. Go ahead.
- [43:20]
Irritated
So I'm curious if you guys have any concerns about how attractive crypto might be to like, the bigger investors? Because let's say the tariffs do in fact reduce the trade deficit, increase domestic production and like foreign investment in US Assets. Crypto becomes less attractive as the dollar strengthens. So let's say his plan does go through and we have an amazing economy. The dollar gets stronger. Do you guys foresee crypto being that attractive to these large institutions or less attractive because of the strength in the US Dollar?
- [43:52]
Simon
Why does the strengthening US Dollar make bitcoin less attractive? Bitcoin will still beat the shit out of the dollar because the dollar is not going to be inflation. You're still going to have to lend it to the US Government.
- [44:04]
Alon
I also think just as an I think Lou raises hand, he's probably going to be smarter than me. But I was just going to say this example today, I hope shows the institutions that the altcoin game and that whole thing is, is, is a fun and exciting and insane market, but just shows them the strength of bitcoin. Because bitcoin falling, what it did was not really. It was significant as a show, but it's not, not. It's just showing its strength today is in my opinion sooner.
- [44:40]
Scott
Yeah, yeah, go ahead. Soon. And then Lou.
- [44:43]
Simon
Yeah.
- [44:43]
Cena
So basically the. On the question of attractiveness, I think, well, given all the discussions we had earlier, if tariffs actually were sustained and was not just a negotiation tactic, if or if the negotiation gets delayed, you definitely expect weakness. More weakness, more sell off everywhere across the world. Right. So that will also crash bitcoin first because it's the most liquid money and that's exactly what it should do.
- [45:16]
Bill
Right.
- [45:17]
Cena
And however, right after that, as soon as the world economy shows weakness, the only solution that's left for policymakers is to print and that will give the Fed more cover to go back to further rate cuts and unleash qe. And at the end of that game, bitcoin will come out the winner and rise like a phoenix. So at the end of that game, bitcoin is the winner. And if we don't and if tariffs are actually not a nothing burger and end up go away with some positive deals, Bitcoin will go back to the high risk, the risk on mode and it will still keep killing every other asset. So both ends of this game benefit bitcoin.
- [46:03]
Scott
Yeah, I think it's because. Yeah. And I think this weekend showed even though bitcoin obviously was trading like a risk on asset on the tariff news, it's all coins that are now disproportionately take the brunt of that on these moves that bitcoin has actually been bought up incredibly strong on every one of these fundamental news events. You see these long wicks down and then prices closing back where they started. Go ahead, Luke.
- [46:24]
Bill
Yeah, well, I'm going to go back. I agree with what Simon said earlier. The world is not a free market and you know, I'm a broken record long term. This is great for bitcoin. It's great for decentralization. You know, bitcoin was created because the government is not our friend and that's what I see here. Tariffs are not good for the economy, full stop. I mean, it's not complicated. Adam Smith wrote the definitive book on tariffs called the wealth of nations in 1776. And if you don't understand if if cares are good or bad, read wealth of Nations. It's, it's actually, you know, still incredibly timely. And the last thing, you know, I'll, I'll note is that, you know, somebody earlier mentioned that, you know, Trump is doing the same thing as a strong man that he did as a real estate developer. And I agree that's what's going on. But let's be clear about what he did as a real estate developer. He made deals with people and then he reneged on them and he didn't pay them. And what that resulted in is lots of people going bankrupt. You can call that strong arming and, you know, but credible people. I worked at Goldman Sachs in the 90s, and we would not do business with Trump because we knew that his word was shit. And now Canada knows that and Mexico knows that. And so if you're them, right, you know that whatever Trump says, you cannot trust. He's the one who made this deal. Now he's going back on it. I think Net net. It's good to have allies. Lots of people are happy, America first. And we don't need any allies. I don't think that's right. But all of this, the bottom line is great for bitcoin.
- [48:00]
Scott
Told the story here years ago before Lou, but the Trump Organization, I'm not going to say Donald Trump himself, but they owe me like 3,000 bucks from a DJ gig that I did at one of the Trump golf courses for an event in New York like 10, 15 years ago. They definitely do not pay their bills. I can speak. In fact, we need, we need a.
- [48:19]
Alon
Bit to trend justice for Scott.
- [48:25]
Scott
Bitcoin with it adjusted, inflation adjusted, it's a lot of money now, you know, But I don't hold it against him personally. I also went to school.
- [48:33]
Bill
How was the party? How was, how was the event?
- [48:38]
Scott
Terrible. It's terrible.
- [48:39]
Irritated
That's. Hey, that $3,000 is almost like 10,000 Canadian now.
- [48:44]
Scott
That's what I'm saying, man. If I had bought bitcoin with that in like 2013 or 14, I wouldn't have. By the way, I was also offered to be paid $5,000 in Bitcoin for a gig in like 2011.
- [48:55]
Irritated
He said, no, that's like the Grant Cardone.
- [48:59]
Scott
Yeah, I'm an idiot. Go ahead, Simon.
- [49:02]
Simon
I was just going to say, as well, on the wealth of nations, everyone should absolutely. If they haven't read the wealth of nations, you know, that's the cornerstone. And it was published in 1776. Anyone remember what happened then? And there was a certain document that was created using the wealth of nations in 1786, and it's called the U.S. constitution. So the U.S. constitution was made on the back of the. The wealth of Nations. And Adam Smith, his face was actually on bank of England notes. And so, you know, everyone should really go back to that. And this is a. This is one of those. This is one of those moments where America's, you know, looking to get either back to the Constitution or this is just some kind of posturing.
- [49:57]
Irritated
One of the greatest books I've ever read in my life was actually the Creature from Jekyll Island. If anybody is interested in, you know, creation of money, central banking, you know, how the, how the. How the US really just moves in terms of its industrial military complex and world domination, you should read the Creature from Jekyll Highland.
- [50:21]
Bill
That.
- [50:22]
Irritated
That's one of the greatest, in my opinion, books.
- [50:24]
Scott
Yeah. It'll teach you that the Federal Reserve is neither federal or reserve.
- [50:29]
Simon
It will also teach you that it was a creation of European banking and a banking cartel that after its third attempt of trying to take over the dollar, actually took over the dollar. And since then, America, the government, because the Federal Reserve was a creation in order to fund wars and bankrupt governments, which is what the bank of England did to England. And ever since then, you've gone from 250 million debt to $36 billion of debt. And I can tell you the same people that created.
- [51:05]
Scott
Trillion. Trillion.
- [51:06]
Simon
I can tell you. Trillion. Sorry, Trillion. Trillion. I can tell you the same people that run the Federal Reserve, their shareholders are the international banks that are not America first. And they will use the dollar for as long as the dollar is useful. And they're also constructing their hedge as a globalist institution that does not have an America first agenda. And as soon as the dollar is no longer useful, it will set up the next setup, which is why they're hedging into all of these different bricks, corridors and everything. You just got to look at the banks behind it is not America First. And that's why it's important. That is to question the federal part of that.
- [51:51]
Scott
Yeah, absolutely. Guys, incredible conversation. We're going to do that conversation deeper on another day when we have a boring news cycle. But I have Alireza up here today. And listen, we've talked so much about tariffs and what's happening. I think it's important that we refocus on why we're all here in the first place. And I want to give you a chance to talk about Natix, maybe give us a breakdown of what it is. But obviously Deepin is one of the decentralized physical infrastructures, one of the biggest narratives in crypto right now, and when prices go down, people forget what's actually being built.
- [52:26]
Simon
Right.
- [52:27]
Scott
Maybe you can give us the TLDR on what you guys are building and why it's so important.
- [52:32]
Alireza
Definitely. Thanks, Scott, by the way, for having me. Yeah, as you mentioned, we are a Deepen project. Essentially, we're building the largest camera infrastructure in the world without owning a single camera, the same way that Uber is building the largest taxi network in the world without owning a single taxi. Why camera? Because it provides one of the richest source of data, or it is one of the richest source of data. It provides a lot of context about our real world. We use actually the data from this camera for various different applications. One of them is to make maps, so similar to Google Street View, if people are familiar. The second use case is we use the video data, essentially, for example, from teslas. We're collecting 360 video data to train autonomous driving AI essentially, as well as testing and validation. And then a recent kind of direction that we went to with this Internet of camera is spatial computing. And essentially to enable robots and autonomous cars to kind of interact with the world and know where they are in the in the world and interact with it and navigate through it. So, yeah, we're building the largest camera infrastructure in the world because camera is the king of sensors, pretty much, you know, you need it for anything you have to do, especially in terms of autonomous cars and robots.
- [54:04]
Scott
So this will effectively be used to help make sure that autonomous cars and robots are safer, more accurate, among other things. Right?
- [54:13]
Alireza
Correct, Correct, correct. The first product that we built was, you know, a smartphone application. So we use a smartphone cameras for drivers mainly. You put it on the dashboard of your car, you collect data from the roads. And the second product that we have created is a little box for Teslas. So you just plug it into the glove box of your Tesla. We record 360 video data from the Tesla from the four cameras of the Tesla, one front, two sides and one rear camera. And for example, we use this data from the Tesla in order to both train autonomous driving stacks, as well as using it for testing and validation. So when you already have a new trained model, let's say you also want to test it and validate it via real world data, via real world footages, what we call, we're looking for something called edge cases. So for example, if there's an animal on the curbside of the road and then suddenly steps in while you're driving, how would your new AI system adapt to this? Would it navigate or not? And this is kind of the testing and validation part that, you know, autonomous cars really actually have, you know, fundamental issues with catering this real world data for testing and validation.
- [55:27]
Scott
I see you have 223,649 registered drivers. That seems like a huge number.
- [55:33]
Alireza
Correct, correct. In slightly over a year. And yeah, we have mapped over 100 million kilometers of, of road. Which, you know, for a lot of Web2 players, when we are actually talking to them, these numbers are quite insane. They have never seen anything like it. And of course these numbers, maybe in the world of deepen, whoever is working on the topic is quite, you know, is quite, let's say doable. But yeah, in the world of web2 a lot of heads are turning because, you know, this token incentivized physical infrastructure is really something that a lot of people cannot comprehend. How you can kind of, you know, bootstrap your network so efficiently and so quickly.
- [56:21]
Scott
I mean, I'm looking at your coverage map too on the side on the site, which is@coverage.natix.network. but it looks like, I mean, almost the entire United States is covered. Basically all of Western Europe. Right. I mean, huge swaths of the populated areas of other countries and continents. Tons of users in India. I mean, how are people finding out about this and how are they getting involved and starting to actually use it? I mean, these numbers are just crazy when you look at this, how many people are actually using it?
- [56:48]
Alireza
Yeah, and let me also give you some, some crazier stats. We have these like focus, let's say regions and cities. For example, London, New York. If you actually go to the focus areas, I think on the top of the a dashboard, you can kind of select these places. We map the entire city in around seven to 10 days. So, you know, these are quite crazy numbers. So we map one more time the entire London in around 10 days essentially. And then if you have blind spots, this is another beauty of crypto, incentivize, you know, physical infrastructure. That's why I'm very bullish on it. It's not just to build the network, but it's also to coordinate the network. So when we have a blind spot, spot in the map, let's Say a certain block of New York is not covered in that seven, 10 days and a customer is interested, we put a bounty on that block. We have these area based missions which we basically put a bounty on a certain block and users will map it in less than 48 hours. So this is the power of, you know. Yeah, crypto incentivized physical infrastructure. We can coordinate our network more efficiently than anybody else out there.
- [57:58]
Scott
Incredibly cool. So like how, how does somebody actually sign up to participate in this? Right. Sort of a chicken and egg thing. Right. There's obviously incentives to do it. You want people to sign up, but they have to know about it to do that first. Right. So like how does the average person say I want to make money for, you know, driving around utilizing my cameras mapping?
- [58:17]
Alireza
You mean how they find about us or how they can actually start joining us?
- [58:20]
Scott
Yeah. How do they find out about you? And then what are the actual steps to start participating?
- [58:25]
Alireza
Yeah, so we have like three different approaches for user acquisition. Let's say on the supply side of the story. One of them is organic, one of them is paid within paid. Of course we both work with, you know, influencers, not crypto influencers, but let's say car influencers because a lot of our users are drivers as well as digital ads. So we use both of those approaches. And on the organic side we have a referral program. So when you refer someone, you essentially get a bonus whenever they also earn something within the network. So these are kind of the ways that people find about us and yeah, once they find about us, I mean right now you have two ways of joining the network. If you do have a Tesla, you can just pre order the device. It's going to start shipping around April this year. And if you don't have a Tesla, you can just use your smartphone. So you can just download our app, register in the app and you know, whenever you're driving you can just put the phone up on the dashboard of your car, you drive around. Basically the smartphone will map the world, collect data together with our AI and you earn reward. And you can also have, you know, other kinds of driver assistant functionalities in the app, like navigation, dash cam functionality. So, so these are kind of added bonuses you're going to get from the smartphone app.
- [59:46]
Scott
And what are generally the economics for somebody who signs up? Like what's the incentive? Obviously there's a token associated Natix. How does that all work?
- [59:55]
Alireza
Yeah, so we have a kind of a interesting model. When it comes to reward, there is no straight answer because the reward is different in different parts of the world. So we have divided the world into areas, countries, let's say, and each country, you know, competes in a, in the form of a leaderboard every month for a reward bucket that gets distributed at the end of the month. So you compete in the leaderboard at the end of the month, according to your leaderboard ranking, you get a certain amount of Natix rewarded to you and you need to be the top certain percentage. I think it's top 60% of the leaderboard if you want to get Natix reward. If you're the down 40 of the leaderboard board, which means you, you're not driving that much, essentially you will get another currency which is only, which only has purchasing power within the app, essentially, because we have like a marketplace, I don't know if you're familiar with sweatcoin, but we also have a marketplace where you can access a lot of other products other than crypto as well. It's for a lot of, let's say Web2 users as well, to have something, not just, not just the crypto reward.
- [61:06]
Scott
So as this builds out, you know, obviously you'll cover the entire planet, it'll be utilized for that. But what are the kind of pie in the sky five years down the road, 10 years down the road, sort of visions for how this can be used.
- [61:19]
Alireza
Yeah, I think what we are building is one of the fundamental layers to enable physical AI, which means autonomous cars and robots. So one of the things that we're basically bridging the gap is providing real world data for training these AI models and testing and validation side of it. The other one, which is quite interesting, we just released an announcement, we're working with another project. They have a very unique, let's say, AI capability is these images. Let's say that we're correcting 360 images that we're collecting from the Teslas. We're doing a 3D reconstruction of the world. And this would be more or less how robots can see the world and navigate inside of it very, very accurately. So once we have one time a 3D map of the world, next time a robot or a car equipped with a simple camera, they will look like a human being basically, but just looking around, they will know exactly where they are and how they can interact with the space and navigate through the space. So very precise, let's say location engine for cars and for robots, up to centimeter accuracy, which is enabled by our data. So the way that I see this is that in five years we're going to first of all have the largest camera infrastructure in the world, which is not just smartphones and Tesla cars. We're going to expand into more types of cars as well as drones and other types of cameras as well. But also on the other side, I think we're going to see a lot of these fundamental, let's say, use cases being built on top of the data that our network supplies, which enables the robots and autonomous cars to essentially perform on a daily basis.
- [63:10]
Simon
Awesome.
- [63:11]
Scott
Anything I might have missed before I let you go? We don't have actually the native account on stage, but people should follow that it's at. I'll look it up. But just give us final thoughts here at Natix Network. N A T I X N E T W O R K But any final thoughts? Anything I might have missed?
- [63:29]
Alireza
No, I think, you know, if, if you are a driver and if you have a Tesla, I would just invite you to visit our website. As you said, natix.net fork and, and you know, start joining essentially and participating.
- [63:44]
Scott
Awesome, man. Thank you so much for sharing. I think it's just incredibly cool and important to remember that people are building real things and we' not just about, you know, meme coins in the crypto space and not just about price action and how it dumps when there's tariffs announced. Everybody give Alireza a follow. Obviously, Natick's network as well, and all of our amazing guests earlier was a great conversation. It's going to be really interesting to see how this week shakes out, see what the meetings with Trudeau amount to this afternoon. Market's still bouncing pretty hard. Bitcoin almost at $99,000. So let's see some follow through hopefully. And maybe we'll forget about this weekend, which was one of the worst we've actually ever had as far as specifically altcoin price action liquidations. You guys will be back tomorrow, 10:15aM Eastern standard Time. Thank you for listening. Thank you for joining Crypto Town hall as always. See you tomorrow. Bye.