← The Wolf Of All Streets
The Wolf Of All Streets
GDP Falls, Inflation Rises, Stocks Fall, What Will Crypto Do? | Crypto Town Hall
00:56:44
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- [00:00]
Dave
Well, good morning everyone. Welcome to crypto town hall. It's Wednesday, April 30, 1017. So we're getting quicker and there's a lot to talk about today. You know, markets are interesting with GDP contraction in the US at the same time as they're the Fed's favored inflation gauge up. So that kind of doesn't look good for, you know, towards slagflation. We're seeing very sluggish results or price action from Ethereum and higher bitcoin dominance. So there's lots of stuff to talk about in the macro, lots of stuff to talk about inside of crypto so we can get started here. I mean, personally I don't, I think Arthur Hayes is probably right. For those who haven't seen it, Arthur effectively said, listen, liquidity is coming. Bitcoin's going to start rocking and you give a very upbeat crypto speech at Token, which obviously I'm in Miami so I haven't had a chance to see it. But I do follow him and do read his stuff. I'm curious, anybody else think that, that Arthur's onto something? Because, you know, bitcoin right now as we speak is trading 93,000 and change below the, you know, that still in the range that we've been talking about since March. Stock markets are doing a little bit worse, but at the same time yield, the 10 year yield is hanging in there, meaning, you know, the stock markets are down and NASDAQ's down 2%. But last I checked the 10 year it was still slightly lower than it was, you know, below 420, you know, 4.17 or 4.18 or something like that. So lots to talk about. Dan, why don't you give it a first go? Yeah.
- [01:49]
Dan
Morning everybody. Just come back to Arthur. So he lives in Singapore. I see him quite often actually around a few friends in common. I always like reading spob posts and when I read them I'm like, this might be the smartest guy in the world because I read them and you know, I'm not a dum dum. I in Mensa, I speak four languages. I read his blog posts and I'm like, I have no idea what the hell that was. I was like, I feel like the dumbest man in the world when I read this blog post. Sometimes I have to go back and reread it and sometimes it still don't make sense to me. So what he says in his blog posts are typically amazing. I wonder if, though sometimes they're just like hype because he's very good at talking stuff up. But he does do blog posts that say things are going to go down. I think the point I was going to is he writes really good blog posts. They always sound very convincing whichever direction he thinks the market's going to go in. But he has been fairly badly wrong quite a few times. So as much as I love him and love his posts, I've learned to put a little bit less credence in his predictions.
- [02:56]
Dave
Sure, sure. I mean, look, I actually disagreed with him in March, know, or I think it was in March when he thought that bitcoin would bottom down into the 60s before rallying. I think that he. I thought and I saw it that institutional demand was there and would cushion the fall, which is exactly what happened. But the flip side of that, that liquidity is coming back into the global markets and almost has to. Although I think that if we get some, you know, if we have a macro discussion about things, I think people will talk about words like pushing on a string, meaning that every dollar of new debt is less and less impactful to the real economy. I mean that's a real question. In fact, let me just say yes to David, who I'm sure will want to talk about that topic. But the point being that is bitcoin getting closer to that critical mass, meaning that, that the technical side of the trading will become less relevant and the demand simply won't. There won't be enough supply. That's really a question and that's, I think a lot, a lot of the reason why bitcoin dominance has been surging. You know, I'm gonna guess that that's, that's a fairly common opinion here. Nobody is saying that markets are rosy, although I do think that this is particularly good. You know, this is, this is the ideal scenario for bitcoin, which is that fee fiat currencies and the central banks are trapped. But we'll see how that goes. In any case, the other topic that's worth talking about. Well, actually, let's not leave that topic. David, I see you just joined. What are your thoughts on the macro and what's driving these markets right now?
- [04:50]
William
I think tariff and tariff related news is really driving the markets. I think that, you know, I don't think I'll say anything shocking to anybody, but I think as time goes on and there's less action in terms of tariff deals or you know, clarity on imposition of costs, the market will get increasingly impatient and we'll start to read, you know, any, the data that does come out the limited data that does come out as negatively as possible. You know, evidencing the fact that the Trump administration either A, doesn't really have a plan or B, isn't making progress on whatever plan it has. And I think that we can definitely retest the lows with respect to stocks if we don't get either some major deals. And when I say major, I mean major in terms of country size and in terms of details and substance, not just we have a deal. All minutiae to be ironed out later. Tom, you know, either that or if the Fed doesn't start to vocally say that it's going to get involved in the near term. And even with the Fed, I'm starting to discount whatever power the Fed may have Simply because the 10 year is trending lower anyway will be below, I believe, 4% soon. So I think even if the Fed is going to get active, frankly the 10 years going that way anyway. So, you know, how much additional firepower will the Fed have or how much effect it will have, I think will become a diminishing, you know, argument or proposition. And so, you know, overall, I mean, I'm, I'm negative on markets.
- [07:06]
Dave
I do.
- [07:07]
William
And you have to have a viewpoint, I think in terms of having a view on markets, you have to have a viewpoint on this administration. I think there's no two ways about it. I've thought, thought really long and hard about it because people on the finance show in the morning, you know, have commented recently about the fact that it sounds like a very partisan show. It's partisan only because we're left guessing with respect to what is the strategy of the administration and you know, how likely is it to get to, you know, some resolution or some progress soon. And so I, I think, I think the market's going to be left guessing, that's all.
- [07:45]
Dave
Yeah, I think that's true. I mean, look, I want a pin in that and refocus back to crypto for a heartbeat. But the one note I will make is everybody here there was and he does a lot, you know, Mike, Ben Cyber, who is a. Is interesting. He effectively found the smoking gun yesterday. You know, I saw it yesterday. I don't know when he actually produced it. But there's a smoking gun now that we now know that there's an organization of 400 NGOs which had been federally funded and using their lobbying power specifically, it was designed to focus externally, specifically to resist this administration. And so there's a lot of that confusion and a lot of that Stoppage. All the court cases that you're seeing, it's a coordinated effort and this is going to bring things to a head. You know, the tariff stuff is self inflicted. I mean, I've been outspoken on that one. And you know, I think that it was insane to, you know, to have that Rose Garden ceremony. There's no question in my mind that it was dumb. I think Peter Navarro should not be in the administration. I think that he doesn't have a clue. But I do think that what they're trying to achieve makes sense. It's just there are better ways to do it. But before we go down that rabbit.
- [09:00]
William
Hole, can I say one more thing, Dave?
- [09:02]
Dave
Yeah.
- [09:03]
William
And it is relevant though to markets. I think the only thing keeping markets up at this point is retail. I think institutions, I think hedge funds are largely on the sidelines. We've seen reports out of various funds about what their temperament is. I mean, unless they're saying one thing and their book looks radically different. Yeah, I don't think the institutional risk on environment is there.
- [09:28]
Dave
Let's be specific. Where are you talking about? Because certainly in crypto and bitcoin, I'm talking about us.
- [09:34]
William
I'm talking about US equity markets.
- [09:36]
Dave
Oh, okay, fine. Well, I don't know. I haven't seen the latest data on, on cash and money market funds in the US So I don't know. But you might be right. But there's a lot of other cross currents there. But certainly in bitcoin it's exactly the opposite. I mean, retail is just nowhere to be found anywhere in the crypto markets. William?
- [09:56]
Henry
Yeah. Hi everybody. I think there's another factor that's been creeping up in the background which is a result of all this talk about tariffs, which is it's the strength of the US dollar. So if you look at the US dollar versus any of the top western currencies and you take just, let's say the last month, only the US dollar is down at least 5 to 10% on average. A little more perhaps against some currencies in the past month. So if you're somebody who's noticed that crypto has become that true hedge against the dollar being much weaker. If you had taken that dollar and put it into Ethereum or Bitcoin, you'd be up 22%. So not only would you have erased the 10% loss in the value of the US dollar, but you would have appreciated another 10%. So I don't know to what extent all the volumes that are coming because of that particular reasoning it is one factor.
- [11:07]
Mateo
Carlo, good morning. Actually, for me, good evening. Coming to you from Dubai, sleep deprived, but at the epicenter of crypto euphoria at token 2049. I do want to share an observation. I had an opportunity today to see CZ from Binance speak publicly at the event. And he doesn't speak very often, especially since being released from prison publicly. And it was incredible. Not only was it standing room only, basically people were sitting all down the aisles waiting for this thing, was able to get a very close up front seat. Raoul Powell interviewed him and had a delightful conversation with him. But the most incredible takeaway I got from it was the incredible contrast of the way he was treated. He was talking about the fact that he has established citizenship here in Dubai and how he has signed with the government a letter of intent to work with the government to help shape an MoU, to help shape their crypto policies going forward and their regulatory framework for digital assets, and how bullish he is on the climate here for crypto and innovation. And as he was saying all of that, I couldn't help but contrast it with how the United States, United States treated CZ by, you know, essentially aggressively regulating the platform. We can all have our judgment calls on whether that was justified or not, but he paid a massive fine and went to prison and essentially has no working relationship with the United States when it comes to this incredibly innovative technology. And I just could not help but observe that incredible, stunning contradiction and where perhaps we might have been if we had an administration that was more interested back then in a dialogue and regulatory clarity as opposed to aggressive prosecution, enforcement actions against cz. So my observations from the ground, and I did not get to see Arthur Hayes speak, but you couldn't have a more bullish sentiment on this side of the world.
- [13:24]
William
Barlow, did anyone ask CZ about his involvement with the Trump family?
- [13:29]
Mateo
You know, it did not come up. There was no Q and A. Raoul kind of ran the conversation. He did talk about the fact that he still believes that we are incredibly early on the adoption curve, that crypto is essentially still just a trading application, and we haven't even touched upon the social network use cases. And also Raoul brought up a very interesting question with respect to how he was seeing innovation around the world. The United States did come up in the sense that we do have a pro crypto administration. So Trump was mentioned, but Rao then asked, well, what about Europe, cz, What are you seeing happening in Europe? And CZ was pretty blunt and said, well, nothing. And it was kind of consensus that Europe seems to be stifling innovation and going in the opposite direction of the rest of the world, which I also found to be a fascinating contrast. All in all, it was an amazing talk. I was very, very glad to have made it in there for it.
- [14:26]
Dave
Matthew, is it just me or can anybody hear Matthew speaking? I don't.
- [14:32]
Mateo
Can't hear him.
- [14:34]
Dave
Matthew, if you're trying to speak, why don't you drop and request it back in? Unless you have a microphone problem. Okay, well, yeah, I think nobody can hear him. So, yeah, the other interesting thing about Europe is now, you know, effectively joining Europe soon, coming to a country near, you know, coming to a place near you is our northern neighbor. Because anyone who thinks that the former, that Carney is going to take Canada in a pro innovation direction is delusional. I mean, everyone talks about 4D chess versus stupidity, and I don't know which is which. But Trump effectively handing the election to someone who's going to strangle Canadian innovation in favor of his cronies in the banking system. One wonders if that's just how ridiculous that is. And I can't come to grips with it. I mean, I think there are a couple Canadians up here, but that's obviously a big story because once upon a time, Canada's regulatory framework for crypto was better than the United States, and it seems like it's going the opposite direction. Anybody care to comment on that before we go back?
- [15:50]
Henry
Well, I mean, I'm in Toronto, obviously, William, Here it's been neutral, I would say, in the last two, three years. It hasn't been doing any harm to it to most people. Obviously Binance and a couple of other exchanges had to leave because the government was requiring some title reporting requirements, which is okay, I think. And then they banned usdt. It's banned in the US by some exchanges as well. But anyways, I think it's a wait and see right now. I hope they don't do anything adversely kind of against crypto. I don't think he's going to be foolish enough to do that. He's already rolled back the capital gain tax increases that Trudeau was going to put in place last year. He rolled back the carbon tax. So he's a little bit more pro business, and I mean a lot more pro business than Trudeau. He understands business. But I think the jury is still out as to whether they'll do anything kind of significant or not. Obviously, I'm staying close to the situation and I'm going to get involved to make sure that they don't do anything adversely, kind of against crypto.
- [17:16]
Dave
Amateo. And then. Zach.
- [17:19]
Zach
Morning, Dave. What an interesting day. I think one of the big stories that we have in reference to Bitcoin is just going back to that conversation is just, it's low volatility. I think everyone, even on the spaces was coming on and anticipating much lower lows in the market downtrend with the tariff pressure and recession risks. And look at where we are. I mean, it just bounced in such an impressive fashion. Bitcoin dominance is ripping. And BlackRock had nearly 1 billion in inflows just a few days ago, which was its largest since launching. And now we're already bouncing. I mean, this is pretty incredible. I think this really suggests its maturity as an asset class. I think that the deviation continues in an uncorrelated fashion. I think it just looks like bitcoin's giving a big fat middle finger to everything else and saying, hey, if you're looking for an opportunity, this is where it's at and ignore everything else that's going on. So, I mean, I've, I think many of us have gotten in some negative situations listening to Arthur Hayes advice in the past, but I, I just, you know, I really don't know what the Fed's going to do here. It just feels like it's being pulled in two very different directions with a lot of tension and it's going to be curious to see. But dare I say, does bitcoin actually care about that anymore? I mean, it doesn't look like it.
- [18:58]
Dave
Yeah. I mean, I don't like to anthropomorphize any asset as middle fingers or otherwise. But if today's action, as we've seen in the last hour, is any clue, NASDAQ has been, you know, it's not, it's not been trading with NASDAQ today, let's just phrase it that way. You know, it bounce while NASDAQ really hasn't, you know, if it continues to, to stay delinked, the longer this happens. What I think that is not well understood by people and by our listeners is the longer Bitcoin's volatility stays low, the longer it trades independently from the stock markets, the more investors will start to lean on that effect and it creates a virtuous circle because you end up with a situation where portfolio construction, anyone who's ever done portfolio optimization understands this. There's a recency bias toward beta and a recency bias toward correlation. All this sounds very nerdy and it is because I'M a nerd. But what it will cause is more investors to allocate larger amounts because they're already buying the story. So it's really important to watch this. It is still very nascent. But if we look back over the next two months and it stays like this, not only is the lower volatility at this level coiling a spring for what price discovery will be later, but it also will increase the asset allocations. Not sure who was first between. I think it was Matthew, then David, then Henry.
- [20:37]
Joe
Let's just see. Can you hear me this time?
- [20:39]
Dave
Yes, we can hear. Yes, we hear you.
- [20:41]
Joe
Fantastic. Yeah, thank you. Carlos, what you're saying about Dubai, I do think they're being so proactive and real contrast to much of the rest of the world. So no doubt more people will migrate towards Dubai for crypto. That's amazing. I hope America continues in the right direction because obviously we saw the crypto reserve and nothing much has come of that. But just looking at the markets at the moment, obviously bitcoin has shown great resilience. Just going back to what William was saying, he was talking about how everything was a great store of value against this dollar devaluation that we've had. And dollar started heading down from, well, from basically when Trump got in pretty well, certainly from the inauguration. And it's headed down. I looked at the charts just now when William was talking and bitcoin is actually virtually at the same level. So it's been really resilient in the face of all this dollar weakness. Maybe that's not such a good, you know, it's not such a good sign. But if you look at the others, Ethereum, for example, it's depreciated massively and actually so is almost all of crypto. So that just tells us about bitcoin dominance. And we've got bitcoin dominance because we're in a very challenging environment economically. And bitcoin is seen somewhat as a safe haven. It's still not there yet and it still will be captive to market movements, I think. So what we're seeing with this dollar index, we've seen it move down quite a bit and I do think there's probably a little bit further to go down with the dollar With US dollar, I think probably the most important one to look at is $yen and I still think that Dolly JPY probably has a little bit further down to go and that's probably negative risk assets, but that short term. So I think there's still some more potential downside. But I Do think there's a rally going to come. So I think the bitcoin dominance will be turned around. I really do believe we're going to see alt season at long, long last. So whether it's lower interest rates, because I think that Trump is going to pull back. We've already seen big signs of him pulling back. We know what he's like. He changes policy on a dime. So Trump is going to pull back when we start to see more negative signs. We've just seen some terrible signs today with GDP falling off a cliff, PCE picking up, signs of stagflation. And contrary to what somebody said, that does mean that we're probably going to see recession because if you're seeing stagflation, stagnant growth with inflation, so growth is going to continue to fall. At some point, Trump will be pressured into reversing his tariff policy. This will probably be seen as a good thing by the markets. We'll see a rebound in the dollar and actually we'll see this massive rebound and bitcoin will fall off its dominance. It'll still appreciate and we'll still see new all time high for bitcoin in the not too distant future after the current fall is finished. But the altcoins will really take center stage and we will see an alt season I believe, because they're going to go multi X compared to bitcoin. If it doubles, it'd be amazing. But I doubt it will do that much. But I think we'll see all time high anyway. So generally I'm optimistic longer term, but short term we've got some really challenging times and even bitcoin is still going to be captive to the market. So that's just a summary of where I'm at at the moment.
- [24:09]
Dave
Yeah.
- [24:10]
Henry
But sorry, I want to correct you on one point about Ethereum. The US dollar has started to go down more drastically about a month ago. And I took that as a reference, as a reference point a month ago, both Ethereum and Bitcoin have appreciated by about 20 to 22%. So it's not fair to say that Ethereum did not appreciate. Of course, if you go back to January and before. Yes, but the US dollar, I was just talking against the US Dollar. The US dollar has started to depreciate more drastically about a month ago.
- [24:44]
Dave
Okay. I think Henrik was next and then David and then Amateo and then Zach. But I could be wrong.
- [24:52]
H
Thanks. Thank you for having me on. So. So yeah, I'm absolutely also, you know, very, very bullish on Both bitcoin and also on all here. And I think you know it's absolutely right also being said about an all season coming and a strong one. I've also been an advocate of that for the, for the entire time even, even doing the, the very hard setbacks we have had. But, but I think we have to focus driver here and the driver is not that we have stagflation or that we have GDP negative or that BTC is seen as a safe haven. The driver is liquidity. And we see now liquidity is coming into the system. We also saw the Treasuries coming out today now starting to say that they're going to support as well. We've seen it coming up quite strongly even though there's been floating and wrong chart on in Twitter where India's contribution to M2 is just, you know, skyrocketing. It's actually not correct. But, but if you look at it you can see that liquidity is starting to come in and that is a normal thing you see into the end of a business cycle. So I am actually pro. I, I think we have a recession coming, but not now. It's not the recession now. The GDP numbers we saw today was very, very hotly, very you know, influenced by the fact that we had a very high level of net net export, sorry imports to the US and that means that I think it was 4.8% where normally it's around 2% for a Q1. That means that a lot of the GDP growth was actually shaved off by that. And if you also take the gold imports that we have had, you actually seen that this, this GDP number actually a good number. So I think we're starting to, we're going too far in the, in the interpretation of things that when we start to say that this is a bad thing with the GDP number that's why bitcoin is doing what it's doing. I think we're seeing that the economy is slowly rolling over and we see that in the, in terms of leading indicators. We see that in coincident indicators also ADP numbers today obviously also gave an indication of an economy that is not strong and that is the moment we always know that the Fed comes in. We know that is when the rest of the world starts to come in and they do that prior to the Fed because it's always the rest of, of the world that is, you know, the weaker, the weaker link. So I think it's a bit too far to say first of all, stagflation, I don't see any signs of stagflation at this point. I mean, you know, we are 2.2.8 on the CPI numbers. That is not stagflation. We see that the labor market is still strong. That's not stagflation. And the GDP negative is only influenced by the negative, sorry, the net, net effect from the net exports. So I think we're taking too far. And that is what is really we are seeing here is the liquidity coming in from the fact that the central banks now start to realize that the economies are rolling over slowly across the world, especially in China and elsewhere, and that liquidity then starts to circulate. And I also have to, you know, say that I don't think either, not even bitcoin is going to do well into a recession, which I think is going to set off later this year. But, but I don't think bitcoin is going to do well there. It will be a risk asset that's going to be sold off and it's going to be sold off really, really hot. But so having said that, I think we're going to go to 150,000 at least in bitcoin before we see that.
- [27:47]
Dave
Well, we'll see. I hate to predict what will happen then. I will say this, and I know that Joe wants to talk and I asked him yesterday, so I'm going to break order here for a second. Joe, you can go next. But the one thing I did notice this morning was truflation was not showing what we saw in the PCE deflator. And so I didn't really know what to make of it. Joe, I'm, I'm going to guess that you have a fair amount to say on this topic.
- [28:13]
I
Yeah, I actually think Heinrich did a really good job breaking down, I mean for whoever the gentleman was saying about gdp, I mean the GDP numbers, if you actually pull over up the hood, right, and you actually look underneath it, the headline numbers everybody's fixated on, but that's mostly a, it's mostly the import driven number. Right. If you look at core core GDP, which you can go pull that up 3%, I mean that's a robust number. And then if you actually look at, again, I know we're focused on US centric, but look at Europe, Europe printed 0.4% real. That's strong for Europe given the recent trends. So you got a US centric number that's driven by this tariff front running which has pulled down the average. And to me I think you're confusing that for being Real economic weakest. You can look at the wage growth data that was pretty positive because it's slowing wage growth, which is exactly what the Fed wants to see. The PCE number numbers were coming in line exactly with what the summary of economic projections had at the last fomc that they think PC is going to tick up, mostly due again to the tariff uncertainty and some of that data. So I think it's precisely in line with what we've been talking about, which is you're going to see slowing economic growth, which is, again with the forecast. You're going to see an uptick in inflation, but nothing's cratering, nothing's falling apart in terms of demand or the consumers. I mean, Visa just issued some guidance. I think the consumer is robust and strong. So you don't. I mean, they're, you know, they run, you know, trillions of payments. You're telling me that their data is just completely wrong. So I don't know who's. Who's thinking that we're in some dire situation. I think you're in precisely the situation that Hendrik was outlining, where you can finally see liquidity return to the marketplace from variety of different sources. And that's a place to be bullish risk assets, not bearish.
- [30:01]
Dave
Yep, I understand that point. You know. Yeah, we could. I. Rather than listening to me talk. Zach, you've had your hand up for a while, so why don't we go there?
- [30:13]
J
Yeah, I kind of want to speak, too. I was actually digging into some of the analytics on the side of, like, Google search Trend data and YouTube searches. To me, this is a good barometer of where retail's at with things. And so as I was kind of looking today, it's crazy how, I mean, low interest is in crypto from the retail side. I mean, it's like it mirrors bear markets. But what's crazy is there's. There's one outlier. Take it for what you will. So, like, on average, right now, you got unique searches coming in from YouTube at Bitcoin at like, 3.8 million. The only thing that's even remotely close IS XRP at 3.3 million. And so from a retail side, it's literally like, that's the only asset they care about. And it's been like this for about 5, 6 months. Take it for what you will. It's kind of interesting, I guess, turning it into, like, a question or comment, like, what needs to happen in order for retail to care. Because right now it's clear to me the reason why Bitcoin is so boring is it's being completely institutionalized. I mean it's just these ETFs have basically created a whole new environment. But from the retail side there's virtually no interest whatsoever. I don't know, I don't know if that opens up anything.
- [31:35]
Dave
One thing to keep in mind, the ETFs are a lot of ETF buying is retail, but it's retail in the professional sense. It's not individuals, it's RIAs and FAs and by the way, they're still not open. Matt Hogan actually gave a talk, I guess I saw it on Twitter. I don't know where it was, but he talked about how the big wirehouses will fully allow them. Right now there's still, you know, quite a bit of sand in the gears, you know, that's still coming. So there's still more to come with that. But I don't call it institutionalization. I call it, you know, real long term demand drivers and that the short term speculators. Scott Melker always has a something that I think is right. The best advertisement for Bitcoin. When the search engines go, it's not a lagging indicator, it's a coincident indicator. It's when number go up that happens and it propels number still farther. So it becomes that momentum chasing. There's no momentum in bitcoin right now anyway.
- [32:40]
J
One last comment on that, Dave. Just to throw this out there, the average search volume for ethereum is under 600,000, which is kind of crazy. So that means XRP is getting 5x the amount of searches than Ethereum, only about 67% away from overtaking Ethereum. Just something to think about.
- [33:01]
Dave
At the risk of provoking the hornet's nest, XRP has a much stronger marketing department. You know, they're, you know, they have a company who has many, many billions of dollars of reasons to promote marketing and xrp and there is nobody who Ethereum does not have that. You know, I'm, I am quite neutral on Ethereum as, as is well known. But you know, we could go down that rabbit hole too. But Mateo, you've been patient so you, you have the floor as always.
- [33:37]
Zach
Yeah, I mean I think with the XRP thing, it's also due to headlines. Right. So you see search trends and viewer trends spike in reference to headlines and there's been a lot of XRP headlines. But I just want to go back to something that's been communicated here and I think that altcoins in general tend to be kind of A one of the greatest litmus tests we have for risk on situations. And there's been so much talk in these spaces and that I see on X just about like alt season is never going to happen. There's, there's, it's not going to operate the way it did in the past. The cycle's broken. Bitcoin dominance is never coming down and I just don't believe that. I think what needs to happen is, yes, liquidity and I think all triggers are pointing to that at some point. You know, maybe not tomorrow, but in the nearer term. We're already seeing it globally. But what else needs to happen? The answer to that, as you know, I talk about a lot, Dave, is AI. And that is happening. And we're seeing big moves in the AI sector with the greatest rebounds off the lows in this recent time. We're also seeing bittensor start to carve its way as a, as a, as a more mature AI asset that's sort of separating from the pack, from L1s and L2s and how they're perceived. And I think that's going to continue. I think give us a couple years, we'll talk about bittensor dominance as much, you know, not to the same degree as bitcoin dominance, but it's going to carve out a certain place within the market that's going to actually be quite significant. So it's AI that needs to happen, Liquidity plus AI and you're going to have this retail interest that spikes. And the last thing I'll say to that is the retail onboarding process is just getting better and better and better. So when this changing of the guard starts to happen, I think we go full stupid. And I don't think people are prepared for how full stupid this can go. It doesn't mean that I hope that garbage doesn't pump. I hope that we have more of a utility based focus. But I think AI is going to lead the way and I think that that's already happening.
- [35:49]
Dave
I don't know. It's pretty hard for me not to think we're full stupid when Fart Coin continues to be to outperform. But that's just me.
- [35:56]
Zach
Hot air rises, Dave. Hot air rises.
- [36:00]
Dave
Yes, indeed. Joe, I think it's you and then Dan.
- [36:03]
I
Yeah, no, I mean you bring up a great point about like far coin, right? Like why, why is there a massive bull hunt in Farco? Why it's one of the best performing assets. And I think there's two primary reasons. Reasons, number one, right, retail understands I think from the perspective of just meme coins, like, exactly what it is, it's nothing. And, and the problem for the greater altcoin complex, and I, and I say this as someone who's generally pretty skeptical about a lot of the alts other than bitcoin, is that they don't have a real key narrative that retail can glam onto. Okay. Forget liquidity conditions, all these things. There's so many different assets. And if you're a retail participant and you're coming to the marketplace and you know, ZK snarks. Do you understand this? Is it very easy for people to digest or is it, oh, there's meme coin, fart coin. We can easily get grok that. That's pretty simple. It's pretty funny, people. I mean, I was talking with somebody at Christmas time about it and they were all laughing. Oh, how could there be a coin named fartcoin? Right. And the same thing with the Trump coins. Pretty easy. Donald Trump meme coin. Like, who doesn't understand what they're buying when they're buying, that they're buying into the idea of Donald Trump. Right. So the meme coins are attracted to people. And if you look at some of the best performing assets in the greater crypto complex outside of bitcoin, they've generally been very easy to gronk meme coins that people just look to, they understand what they're buying, they're buying air, but they're buying it for number go up and that's it. And just one larger point about, you know, I think it was Zach was asking, like, what does it take to get retail back here? You need some of these altcoins to go on. Absolute tears. I mean, it's a, it's sort of a self. It's a positive reflexivity. Right. If the altcoins start moving very quickly, that attracts eyeballs, that attracts Google searches, that attracts more people piling in. And we've seen this in many prior cycles. We've seen that once the assets start moving, more people pile in and it gets attractive. So that's the mindset of crowds. So it's kind of like, what does it take to get moving, get it moving? You need a catalyst. You need some sort of narrative to get retail interested in everything outside of bitcoin.
- [38:00]
Dave
Yeah, I think there's a lot of truth there. Trying to see who was the. I saw. I think it was Dan. You had your hand up next.
- [38:09]
Dan
Yeah. Want to swim against the tide a little bit and might cost me some followers, but I Don't think there's going to be an out season. I don't think there will be an alt season. I don't think there's any preordained reason why there must be an alt season. I think it's a hangover from previous cycles. I think the number of new coin issuance now is far higher. The barrier to issue coins is far lower. When we had the income, well, the, the incoming president print his own token and sent it to about 50 billion in a day. And that wasn't outgoing season. I just, I, I don't see there being an altcoin season. I really don't. I think it's people married to their bags that hope there will be an out season. But I see no fundamental reason why there's going to be one.
- [38:56]
Dave
Well, I'll tell you what my, my view is, my view has been, has all, has been consistently and we'll continue to say it, and I know Carlo is going to agree and probably give 100% in a second, is that the building that is in, in process of starting will have a new, there will be a new version of altcoin season from newer, better distributed apps across a variety of verticals. But it's going to take time. It's not the kind of thing that, you know, this whole notion in my mind of a four year cycle is kaput, but it's kaput for math reasons. I mean it's not because there aren't cycles. I mean hell, the presidential cycle is four years. The leadership cycles in other countries are four or five years. There's always cycles. Right. But the simple fact is that there's much less Bitcoin being, you know, the difference in the halvings are no longer as relevant as other factors in the supply demand equation. So that to drive a four year cycle is nuts. And this idea of defi summer or this, that all you're basically saying there is will animal spirits rise again in the world of crypto? And if you're saying no, then you don't understand human nature. It may not be imminent, but people love to gamble and people want to put money in and they always, if not buy the top, they certainly buy it when it's already demonstrating signs of momentum. Matthew, then Henrik, then Zach.
- [40:24]
Joe
Yeah, I agree with you. I agree with you that these, this alt season isn't necessarily a cyclical thing. And it doesn't mean just because there's a cycle there that we need to have an alt season. I'm not saying it for that reason at all and actually we don't even know why these alt seasons have happened in the past. They actually come at the most unexpected times. Same with bitcoin. When we saw it down at 15,500 at the FTX low, there was no particular reason why it would start to rally to new all time highs particularly. But it happened and I think the same will happen. And as was just said, it's all about greed. And when opportunity begins to arise and we start to see sentiment improving, then people are going to pile in and we will see sentiment improve. We are seeing the economy slowing down. And crypto is related to the amount of money that people have in their pockets, particularly the altcoins which is retail driven. And if they do start to ease monetary policy to try to boost the economy, then I don't doubt that that easier money will flow into risk assets like crypto, but especially altcoins. And that's why we're going to see altcoins pump even more than bitcoin. But bitcoin is a different asset. Now I don't think that we can put it in the same bag as the rest of crypto but that's why, as I say, in this challenging environment, why we're seeing bitcoin holding strong and bitcoin dominance and why you will see an alt season when everything starts to look good. So yes, bitcoin is going to pump to maybe what the previous speaker said, 150k or somewhere around there. But if you see that on bitcoin you can be sure altcoins, that's 50% or 50 odd percent for Bitcoin you're probably going to see forex on some altcoins and maybe some of the crazy ones like fart coin even more. I really believe we're going to see an alt season but who knows what the reason is. We don't know the reason yet, but there will be a reason.
- [42:23]
Dave
Yep, always interesting. Zach?
- [42:26]
J
Yeah, I think my take to Dan's point, I think there will be an altcoin season. I just think it's going to be different. I feel like back last cycle you could literally blindfold yourself, throw a dart at the dartboard and hit bullseye. I don't think we're there again. I think it's going to be select segments of the market that move. I forget who made the point earlier. AI, I think that's a narrative that's huge. Bittensor is the clear leader there. It's proof of work too, I think. Rwa, I think anything ISO compliant, if you Go back to last year. We had that little pop in altcoins what led the way. It was xrp, xlm, algorand, all of that stuff that fits that banking narrative. Whether that happens or not. People are speculating on that. Right then we've also seen the SWE ecosystem move. Why? It's the new shiny object. Very similar thing happened in 2021. New shiny objects were Solana and Avalanche. They led the way. So I think you're going to see the new shiny objects have their have their time. I think you're going to see meme coins have their time. And I think you're going to see the things that institutions could actually put money in, like AI, like rwa, like ISO, banking, whatever, those sort of things will have their runs. But if you're an old archaic, you know, thing that's been around just hanging on, I don't think those things are going to move. I mean we'll see.
- [43:46]
Dave
But Henrik.
- [43:50]
H
Well, I think, you know, we'll set that. There's no reason for a. No fundamental reason for a. The all season and of course there's no fundamental reason. I mean, I think, you know, if you look at fart coin, dogecoin, pongy with et cetera, all these meme coins, there are no fundamental reasons behind those. And this is also what I have when it comes to the whole crypto world is that there are amongst the ones that we have out there, of course there are some fantastic business ideas, but there are not tens of thousands of these. So what drives the crypto market right now is animal spirit. It's not there right now as rating as we have seen it. But we still have to consider if we look at the altcoins index, how high it is. Actually I think we were 70% above the lows we had in August of 24 when we had the panic. There we are some 180% above where we were in early 2023. So of course there is already people buying into the altcoins but it's not the speculative mania that we see right now. And that is normally what follows when liquidity stocks starts to flow in. So when we have seen bitcoin taking off and you know, people are then like, like what? Normal. It's normal, you know, behavior. We see that people start to dip their toes into bitcoin and you know, we just could talk about and how it was in October before we saw the rally there in November. People really, ah, bitcoin. This time we will not see any highs. They are coming well then it actually did make a new high. We came into the 100,000 and then we saw the pullback and we people are then again now a little, you know, fragile in terms of their trust in it. But the thing is, this is normal human spirit. This is normal human psychology. They will start to dip in some people then make money and then people say, oh, this is about bitcoin. Then some people start to move into Ethereum to Solana and the likes. And we are already seeing that technically we are seeing major, major bottoms in some of the altcoins. And that will, as I see it, spill over into the, into the meme coins again because that is the normal part of the human psychology. If you don't see you can get any more, more returns from being in Bitcoin and Solana and the likes, then you move into the next asset. That's just normal and that is, and that's crowd dynamics. So by the end of the day we cannot, you know, put it into the, the minds of one person who will kind of rationalize things. It's a, it's the crowd dynamics which is so difficult to, to, yeah, to perceive maybe for a lot of people. So, so I think you're going to see that we are, we're going to have a fantastic old school season and it'll be human spirit and it'll be absolutely devastating for those who gets into at the very top of it. And if you look right now, the bitcoin dominance has been rising. Yes, but it's actually, if you look at it technically, you can actually see that the momentum in the rise is deteriorating and that is normally what you see into a major top. So if you have bitcoin and I just have to also, you know, just align myself with the previous speaker, they're saying that if you get 250,000, you're going to see a fantastic, you know, moves in some of the altcoins three to four times. I think you can see way, way more, more than this. And I think this will actually be the, the biggest one we have seen. I mean my projections on what the altcoins market can go to in this crazy. And I want to say that in this crazy mania that we see, because this is about, this is, this is a bubble. I mean this is a bubble and it's the very definition of a bubble. When people start to sit and think that we have 10,000 different small coins, that all will make sense to the market. When we really see the, the, the, the, the, the, the shakeout of this at some point. So I think we are, we, we, we, we're seeing that again into the to business cycle where liquidity comes in, everybody jumps into bitcoin. First people make money, then it has a pullback, people jump in again. And now we see the bottoming phases of some of the large ones. We see the takeoff and then we see the mania coming into the final phase of it. And yeah, and I hope to get out, you know in the, in due time because I think it's going to be devastating when we get to the end of it.
- [47:28]
Dave
Well, I mean it's an interesting theory. I mean it certainly could happen that way. I think that bitcoin is separate. I think that's probably the easiest thing. I mean I always laugh at people who say oh bitcoin is boring. You can only 10x. I want something that can 100x or a thousandx. And it's like when I hear words like that, it makes my head hurt. I'm not gonna lie. It's just one of, it's just one of those things. But you know there's, there's one other driver here that I think is important. You know, in terms of, of the kinds of things that will happen in all coin people toss up. The words are for real world assets. I mean the first one that the first domino to fall, there's actually was a story from BlackRock about them tokenizing their money market fund. But just understand what will happen when we have stablecoins as part of the plumbing in the US and world banking system. It makes those assets so easy and will increase the velocity of money. So the notion of stablecoins bores a lot of people in the crypto verse because like oh well, who really cares. The truth is is it increases velocity of money and the ability to move money into investments that are the hot investments and also to the yield bearing investments. And so it will be a big deal. And that is going to happen much sooner than people think. I mean I think most people are expecting the fall. I think by from what Perry Ann was saying yesterday, I think early summer is to get something onto the president's desk. Seems likely. And that is not a, that's not a trivial deal either if you're talking about cycles. Anyway, I'm.
- [49:03]
Zach
Yeah, Dave, I love that argument. You know, I think Sailor opened up my eyes a lot when it came to the velocity of value when it comes to bitcoin. And just taking that from a pure physics perspective, I think you can easily apply that to stable coins. And when you have even just, I mean, if you think about the clearing time of dollars in the current Fed Rails versus Stablecoins, you're looking at such a magnitude of improvement on the velocity. Then you have real world assets which actually opens up instant liquidity to anything that, that is going to be tokenized. And then all of a sudden you actually have. I mean, Peter Thiel talks a lot about how from a physics perspective, like humanity isn't moving faster. Like our cars don't go faster, our airplanes don't go faster. When you actually look at that, you actually see stagnation in kind of the novelty engine of human innovation. But when I think you actually look at this liquidity value layer coming in with an actual increase in pure velocity of value turning into bits, transferring and settling instantly, you've got this massive, huge upgrade for humanity and how value is actually transferred. And I think bitcoin's strength is leading the way of this indicator. And I think that's, that's enough to, to show the signs of where this is going on on some version of the timescale. And there's going to be a lot of projects who are implementing this and building it faster than ever because of the tools that are available to us today. The Rails are coming, man, and it's going to be fast.
- [50:45]
Dave
Yeah, I don't think people understand just how shitty the infrastructure that our global financial system is built upon. And I say that with, because people don't, don't get it. You know, when you do an ach, you know, you, whether it's Zelle or you use, you know, Zelle or Venmo or whatever under the covers, it takes three plus days for that money to actually move. Days. Right. You know, so people talk about Bitcoin slow because it could take what, 30, 40 minutes. And you know, obviously on lightning and other things, it's instantaneous. Stablecoins move instantaneously. So we are talking about three orders of magnitude increase in speed of the ability. And by the way, with speed comes certainty and lower risk in terms of movement. And that is a very, very big deal. The same thing when people talk about RWAs and I always laugh, it's like, because they don't really personalize it, most people don't realize that the stock market in the states, which is 50% is still based on paper tickets in a vault under 55 Water Street. It's not like Euroclear or Sedal in Europe are all that much better. And there is a reason that tokenization is a big deal. Is it Drives efficiency and efficiency will drive velocity and velocity means money can move quicker than ever before. And that's not a small deal, right? That's really the only point that I would make on that. But I kind of wanted to also get back since we have both William and Carlo here. A lot of people have been talking about Ethereum weakness and what's going on. I mean, William, you've obviously been a champion for Ethereum ecosystem and you know, there was talk yesterday of, you know, after Petra is done, that the next upgrade, after the next hard fork will be a rather big one. And the question is, is, are people losing the Ethereum, you know, community seems still pretty strong, but outside the community it seems like people are losing, losing faith. I mean, you know, what's your thought process there? Is this, as Scott Melker would say, a buying opportunity because people are being lulled to sleep, or is there really something bad going on?
- [53:00]
Henry
No, I mean currently Ethereum is vastly undervalued. The reason being it has been a leader in the market. When you are a leader, you are going to get attacked. That is par for the course that comes with the territory. And the more that Ethereum's dominance has become apparent. When you look at the statistics in terms of the market share in real time, real world assets, defi dominance, even NFTs and so on and so forth, the numbers speak for themselves, especially stablecoin dominance. Ethereum has the largest market share, so it is going to get attacked. That is par for the course. Now of course there's been a bit of imbalance between the L1 and the L2. I don't want to go through that rabbit hole. A lot of activity has shifted to the L2s and less has come into the L1. If you think about it, L1, Ethereum sacrificed itself temporarily to allow for scalability to happen laterally. So they did what was good for the ecosystem as a whole. It hurt L1, but I think it's a temporary thing. It's going to be rectified over the next two upgrades. Now the last thing I'm going to say about this is when you look, everybody's been talking about Bitcoin as being this unique asset. And I agree Bitcoin has very fundamental properties. But if you look at those properties, Ethereum is very close, if not equal to Bitcoin in the properties of decentralization, security, real neutrality. No other chain can measure against Bitcoin aside from Ethereum. So Ethereum is closer, much closer to Bitcoin than it is to any other 5 to 10Next alt chains that people talk about. And that's really, I think where it's going. It is closer to, much closer to Bitcoin and it shouldn't be compared to the next five or ten chains by market cap, but rather compare it to Bitcoin on those fundamental properties.
- [55:25]
Dave
Well, I mean I know I don't agree but I don't want to start go down that rabbit hole since it's, it's getting time to wrap up here. But I do think it is, it's, it's worth exploring at some point. So you know, maybe, maybe the two of us can do have a conversation on this topic and get some other people. I know the XRP people would say that it's flipping ether and to be, to be honest, I don't know what to make of that, you know, considering how non decentralized XRP is. But that's a totally different story. Anybody else have any, any final things to talk about about? Because we are running up against time. Okay, so in that case we're going to wrap it here. Once again, everybody who's listening should be following all the speakers who give of their time. This is always the kind of thing that people don't understand the time commitment to have these conversations because the idea is to, for everyone to understand what to be researching, what to be looking at. Not to take anything we're saying as investment advice but to take it as a framework to be able to look at these markets and this kind. This show will be back again tomorrow morning at 10:15. So that's it for now. Take care and stay safe.