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The Wolf Of All Streets
Insane BTC Volatility. What Happened Yesterday? | Crypto Town Hall
00:58:45
Insane BTC Volatility. What Happened Yesterday? | Crypto Town Hall
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- [00:01]
Scott
Good morning everybody. Happy Friday. What an eventful day. Yesterday was bitcoin currently sitting at a price of $98,944, but depending on the exchange that you look at, was as low as almost $90,000 yesterday, as high as roughly $104,000. Anywhere from a $12,000 to $14,000 single day candle spread. Absolute insanity. What volatility can do at $100,000. Bitcoin, I believe there was a five minute candle that went roughly from 98,000 to $92,000. Absolutely insane volatility for any who thought that volatility would be dampened with higher prices, that whales couldn't move this market around. But here we are right back at 99,000. I don't have the final numbers on liquidations yesterday, but I saw numbers as high as 2 and 2.5 billion in liquidations. Be careful with leverage out there, kids. Dave, I'm very glad that you are here because you kind of unpacked this in a thread you and I have discussed. I can't even count how many times what happens in these leverage and liquidation cascades. Probably worth explaining here again how the spot market and per market sort of interact and why this can happen and why this isn't some huge fundamental selling event.
- [01:28]
Dave
Yeah, I mean, it's actually a huge fundamental buying event, but that's a different story. We'll get to why in a second. I just want to make it clear that if you go back to the summer post when we were still bopping around below 30,000 and there was one of these that I wrote up about and did a video on, from a little over 29,000 down to 26, but it hit as low as 24 in percentage terms. This was actually smaller, but the prices tripled. So obviously the numbers are bigger. It was a very typical liquidation cascade. So effectively what we're talking about here is something that has happened in many financial markets over the years. The most big obvious one was Japan. When the futures markets in Japan were 4x, the liquidity of the spot markets and you saw what got commonly referred to as liquidity arbitrage. So here's the deal. You can slowly, over a long period of time, amass a position that is long spot short. Perpetual swaps, you can do so especially in periods of time when the market is moving higher and leverage and funding rates are going higher, do so profitably, that is be paid to put this position on, because what was happening by yesterday at one point instead of 0.01 ish funding rates, which more or less translates into, I mean it's more than the risk free rate because people have more reason to borrow crypto than not. But still relatively inexpensive. It was as high as 0.1, so it was 10x the normal funding rate. What that translates to is being paid significant interest rates in order to be on the short side of the position if you're on a swap. So now imagine that you accumulate a lot of long, you know, a lot of long bitcoin on spot market and a lot of short perpetual swap. And so it's a balanced position. As long as you know you're hedged, you don't make or lose money. Then you wait until a period of time when the market is less liquid. So let's say right after the US market closes, the futures have just, the CME futures have just stopped trading. Most of the US based traders are in the, you know, in the. Well, it would be in the bar. I always think like the UK and the pub and Asia has yet to wake up. So you pick that time of day and you say okay, look out below and you then turn around and dump your long spot position on exchanges where there just isn't enough buy interest and you start pushing the price down. Well, as soon as that happens, the liquidation engines on the swap markets kick in and all those, I don't want to say morons, but unfortunately I think that if you're trading bitcoin on more than 20 to 1 leverage, you probably are a moron. You certainly are not an investor or trader or speculator. You are literally looking for lottery tickets. But there are people who do that. What happens is the liquidation says, oh wait a minute, this position is about to go underwater, I have to sell. And when it sells, it sells price insensitive, that is, it literally just dumps. And so the deal is you sell. And let's say it was, it was at 102 when this started and it ends at 92. Your average price for selling that is probably somewhere around 97, 98,000. But you then have the ability to potentially buy back all of your or your swap short at 92, 93, 94. So you lock in a pretty substantial profit if in fact you can pull this off. Now, you know, forget the morality of it, forget whether it should be legal or not. That mechanic has worked multiple times. And so if you've heard me multiple times, I always look at the funding rates when I see them get substantially high for a period of time, you know, that people could put on the potential to do this. Trade profitably. Whether they actually pull the trigger on it is a different story. Now it's worth noting that if somebody like Saylor or any of these other sovereigns or any of the other, any other large buyer had major spot bids in the market and they tried to do this, the people who tried to do this would get their heads handed to them and they would get killed. So it's not a risk free trade by any stretch of the imagination. Of course, generally that's not the way it happens. Very few people leave resting bids out on the market and it takes time to react. And in fact, most of the algorithms that are used by these accumulators would float with the market and look to pick it up much, much cheaper. So that's the situation and that is almost certainly what happened. It's just this. Whether or not we ever find out who or where, you know, who are the major players, that's a different story. We always talk about it. So anyway, I'll end there. There's probably questions around that.
- [06:24]
Scott
Yeah. And I guess to be clear, is that what you view is totally what happened yesterday.
- [06:32]
Dave
Look, it's almost certainly what happened yesterday. I mean, come on, there's.
- [06:35]
Scott
Did you have those total numbers where they, I had seen quoted like 2 billion, 2.5 billion. I mean, those are multiples of previous events.
- [06:43]
Dave
I look at Coinglass and Coinglass doesn't have it at that high. I mean, yes, it was the biggest single long liquidation number since June. And the fact that we, which you know, in and of itself, the fact that we've had over the last two weeks more longs liquidated than shorts by a substantial, substantial amount as we're sitting here at 99,000 is rather funny to me. I actually posted that this morning. It tells you how the underlying demand, how if you want to understand in a picture that Bitcoin is being driven by investors and that speculators have been on the wrong side of the trade in moss, that's the easiest way to understand it. I mean, yes, it was the largest liquidation in a while and yet it hasn't impacted the price very much. And so that's the way that's what you should do. That's what people should take away from this.
- [07:35]
Scott
That makes perfect sense. Joe, obviously you're looking deeply into a lot of this data. How are you viewing the price action of yesterday? And generally, I guess, this climb and sustained price action right around 100,000.
- [07:48]
Joe
Yeah, I think the key is the sustained price action around 100,000. I mean, if you haven't looked in the last 40 seconds. ETH has crossed 4K, right?
- [07:57]
Panos
Yeah.
- [07:57]
Scott
And it's also over 0.04. Clearly that means on the ETH, Bitcoin ratio, it's been a while.
- [08:02]
Joe
Yes. And so I think what we're kind of seeing here, I mean, we've seen some really interesting coins move, right? Like the other day we saw like verge move up 150% and, like, haven't heard of Verge. Like, Verge's big move was when they went to ERC20, they went to Theorem back in 2018. That's like the last big thing they did. It's like, why is that coin moving? And I think we're seeing a little bit of a pause here, you know, around Bitcoin, around 100K. With Bitcoin, obviously, we moved up past 100K. Exciting moment for everyone for that, you know, 18 hours or whatever it may be. It's a psychological number and I think we underestimate how much psychological numbers actually do impact the market. You know, people still think they can't get any bitcoin because it's too expensive. And so, you know, I think it's a simple number for people to kind of grasp onto. But we are seeing, you know, what we all kind of called, which is Bitcoin. Bitcoin makes a move up and once it pauses for a couple weeks or a month, we see a rotation into everything else. Right. And it doesn't take a lot. Now, that bitcoin, you know, is almost multiple trillions in market cap to move smaller coins that are out there that haven't moved in a while. And as far as Ethereum goes, it's a staple. I mean, tether printed, you know, another, you know, billion dollars. And a lot of that flows through Ethereum. It is used. Everyone kind of settles back to ETH at some point. You know, whether you go to Base or Avalanche or Arbitrum, you know, you're. At some point you might be moving back into Ethereum or, you know, you send some of those coins off to an exchange, they're going to settle them back to Ethereum. And so it's just going to continue to move up. Obviously, you know, we've got ETFs, it's cemented in the space, and so, you know, the take is it was just a matter of time.
- [09:48]
Scott
Anyone else specific feelings on what's going on with the market? Andre, what do you think? Obviously, you're looking at this from more of a institutional perspective. We've seen to Joe's point Obviously eth here at $4,000. But we've also seen a bit of increased interest, more than a bit in the ETH spot ETFs. They've had net inflows, they've had days where there's been larger inflows on eth spot ETFs than Bitcoin.
- [10:13]
Andre
Yes, that's true. I think yesterday alone we saw the highest daily net inflow into US Ethereum ETFs.
- [10:21]
Panos
Right?
- [10:22]
Andre
Slightly above US$400 million. And also by the way, on a global basis we saw the highest net inflows over a five day period, right across all kinds of products. That's why guys like Matt Hogan, my colleague, he says it's not an alt season, it's like an everything season. Everything's being bought by investors.
- [10:45]
Scott
Right.
- [10:45]
Andre
At least according to the ETP flows. I just want to weigh in what happened yesterday. I think I totally side with Dave. I think there was huge long liquidations. The numbers I have are from Glass mode and they say like in a one hour time window I think was 20. So it was 11 o'clock yesterday, Universal Time. You saw US$44 million in long liquidations within one hour and was the highest amount of long liquidations within that one hour time frame since April. Right. Since we saw that GBTC post ETF sell off. Right. But I think in general, if you look at all kinds of indicators, I mean after such a sell off you you'd expect, okay, sentiment must be really bearish right now. Right? But if you look at all kinds of indicators, you still have to say that sentiment still remains relatively bullish.
- [11:46]
Panos
Right?
- [11:47]
Andre
Especially if you look at on season, the out season index or you look at the basis, the bas still relatively elevated. We just talked about ETP fund flows, right? Options skew, crypto, Fear and greet index. All these indicators and also funding rates were mentioned, right? All these indicators, they tell me that sentiment still elevated. You see some pockets of de risking. Right. I think the sell off yesterday was induced by crypto hedge funds. They've been derisking pretty aggressively more recently. I think they have the lowest beta to Bitcoin since. So that they've reduced their market exposure to the lowest level in.
- [12:29]
Zach
Yeah.
- [12:29]
Andre
Year to date, I think. And this also corresponds with the whale exchange inflows we saw yesterday. So there's some de risking going on, but still hot hot pockets in the market. So I don't think if we, if we continue to consolidate, there's still more downside. But at the same time, if you look at on chain data, what's still surprising, right, is that overall exchange balances for Bitcoin continue to drift lower. Right. And so this kind of supply shock narrative is still continuing despite these whale exchange inflows. Some profit taking, right?
- [13:09]
Scott
Yeah. Panos, you had your head up before.
- [13:15]
Dave
It was more of a question to Dave, actually. When it comes to those liquidation events, is it the exchanges that are doing this as they probably have the most.
- [13:26]
Carlo
Data and information on.
- [13:27]
Dave
No, no, no. Actually, thanks for asking that question. Panic got asked online as well yesterday. Understand that while it is theoretically possible for unscrupulous people at derivatives exchanges to be working with prop desks and without naming names, we know that that probably did happen in previous cycles. I think that the size and scope of the derivative exchanges at this point and professionalism has increased dramatically. I mean, look, I'm not going to speak out of school. I don't have data one way or the other, but it is inconceivable to me that. And in fact, in Binance's case, it's impossible. Impossible because with the DOJ crawling up there. Well, nevermind, I was going to use a gross way of their ass.
- [14:14]
Scott
He's talking about their ass.
- [14:17]
Dave
With the DOJ up their asses, that ain't happening. And organizations like OkX and Bybit are doing very, very. They're spending heavily on compliance. There's no effing way the exchanges are doing it. But the exchange liquidation engine is set to operate in a particular way. And there are large traders on these platforms that can see and understand where the liquidation points and pressure points might be. So it's proprietary trading firms with significant capital. It could be one firm, it could be multiple firms. I don't want to speculate. I have seen things in my life where multiple firms have gotten together and shared data in order to give them better information. I'm not saying that's happening here. I have no personal information. I just know it's possible. But no, I don't believe the exchanges have anything to do with it. And in fact, if there was any sort of global regulatory regime where they decided that this sort of manipulation is illegal, and by the way, it would be considered illegal in European jurisdictions, in Japan and in the United States for certain. Pretty confident be illegal in Hong Kong and in Singapore as well. If it were in traditional markets, then the exchanges I'm sure would cooperate and say, yeah, here's the sellers, here are the buyers. Go see if you could figure it out. And if regulators could find it, then they would find people for Manipulation. And just so people understand when I say manipulation, I was asked a long time ago to help define this for us regulators and, and they've adopted it, which is manipulation is when you buy or sell or when you do one of two things. You place bids or offers without any intent of filling them or you spoofing.
- [16:06]
Scott
For people who've heard the term spoofing. Yeah, right.
- [16:09]
Dave
Spoofing or layering or various things, but it more or less defines it that way. And the second is when you trade where in a method to create more market impact to ie move the price more rather than less. That is if you're selling theoretically you should want to sell high. But there are circumstances when you might want to sell low and circumstances when you might want to buy high. The most classic of this, and there have been prosecutions for it. So people should understand what I'm talking about is when there's an index inclusion event, a company gets added to the NASDAQ index or the S and P index on that date at a particular point in time, it's going to get added to the index. So people try to game the system by buying and pushing up the price and buying at a lower overall average than it will be when it gets to that price. And often they then, you know, short at that price because it's a top tick. It has been, there have been cases where people have gotten so greedy that they've moved prices to limits and moved it so much that the regulators said, wait a minute, you clearly were trying to manipulate the price. That's the kind of thing that this would fall into. And you know, I don't think it matters a toss to the overall market. I think actually it would probably improve the market and be bullish if these sorts of things could at least be there was at least some risk to companies doing this. It would be better for market integrity. That said, as a libertarian, does it really matter in the end? Honestly, in the end it doesn't matter. I mean we're at 99. 4 now. I would be pretty surprised if we don't tick 100 at some point today again. And all it does is it flushes out people who lose money. Are the people who probably deserve to have their money, fooling their money, assume parted and people who made money, a lot of hodlers did by having lower bids out and the market makers themselves and the prop trading firms themselves. Does it really matter in the long scheme of things? But to answer your question, pan no, I don't think the exchanges have done anything Wrong in this scenario. And frankly, it's wrong to look there.
- [18:13]
Scott
Yeah, Dave, I think. Yeah, go ahead. Sorry. I think the clear nuance there, just for people's understanding, what you did say is that it is the liquidations on these perpetual swap exchanges that allow for this to happen, but it's not the exchange doing it themselves. It's just the mechanics of liquidating large orders that pushes the book in either direction. And if the book is thin, it pushes it further.
- [18:36]
Dave
If you didn't have a real time liquidation engine, it could be substantively worse.
- [18:41]
Scott
Of course, that's what I'm saying. It's not inefficient and it's not the exchanges meaningfully hunting your stops, losses or anything like that, which is what I think he was originally talking about.
- [18:52]
Zach
Right.
- [18:53]
Dave
Market makers do that. But I want to make the point because people will say it. They'll say, oh, this proves that real time liquidation is bad. Actually, it's the opposite. Anyone who's been in the financial markets around potential market panics knows that in 87, when the crash happened, the reason it was so bad is because if you put $100,000 of collateral on a crypto exchange and you're leveraged too much, you lose your 100,000. You put 100,000 in collateral on a futures exchange, you could lose a million. You could lose 10 million, theoretically, if you were really stupid, but that would be pretty hard to do. But the fact is it's not limited loss. And so what happens around big financial panics in futures markets, whether it's margin calls. Well, right. Or if you saw Baring Brothers go blowing up because of Singapore, I mean, it was exactly that. And so you can make a very, very good argument. I think it's actually true that as crazy as the day yesterday was, and we look at it, there was no systemic risk. At no point yesterday was there anybody saying, oh my God, there are going to be firms that are going to fail. We don't know if things are going to settle and people panicking. There was no panic. The market just reacted efficiently. Whereas the same kind of event in the old style futures markets could literally have triggered a financial panic. And that's very important. I will, I would love to make that point. I've actually talked about it with both Republican CFTC commissioners and they both know that I'm right. So it's a very interesting dynamic because it will get used by people to say, oh, look at how crazy this market is. Honestly, I think it proves how great this market is.
- [20:30]
Scott
I think As a segue to the next conversation. What's interesting here besides the insane volatility on bitcoin is looking to the altcoin market and seeing how it reacted in context. Because in a bull market and a bear market, these things I think are very, very different. And this time we still have bitcoin dominance continuing to drop significantly. It's at 55.41%. Just a week and a half or two weeks ago it was at about 62%. For those who watch bitcoin dominance as a signal of when alt seasons might come, December 2016, December 2020 were the tops three massive alt seasons. We are now in December of 2024 and Bitcoin dominance finally looks like it's rolling over. It could be as simple as just watching the four year cycle in this context. But yesterday, like I said, even with these huge moves down, altcoins, if they did drop, bounced very quickly and have continued writ large to outperform bitcoin even amongst this volatility, which is a huge signal for anyone watching this market because that has not happened in years. There's not been that kind of volume or interest in altcoins. Go ahead, Carlo.
- [21:39]
Panos
Good morning and happy alt season. Scott, I cannot, you're saying for those who celebrate, and there's reason to celebrate because right now I think we're at the market stage where you pretty much can throw a dart at the wall and hit a winner. Everybody's a, everybody's a first rate trader at this point because everything is pumping. One interesting observation I saw yesterday that hasn't really been talked about a lot as far as the significance of it is the announcement that SUI has been added to Phantom Wallet. Phantom Wallet was the engine that drove the Solana ecosystem through the roof and the meme coin craze. And now you've got SUI being included along with Ethereum, Bitcoin, Solana and Polygon available on Phantom. And I think that that has very promising prospects for the future of that ecosystem and that chain. And it just ties into what you're saying. I think, I think we are in alt season and we're going to continue to see aggressive growth between now and inauguration and maybe a cooling off after inauguration. But I think the headwinds are out of the way.
- [22:47]
Scott
If bitcoin just hangs out around a hundred thousand for a while longer, especially now having the confidence of having broken it, altcoin should go absolutely mad in my opinion. Lawyer, I see you're throwing up the hundreds. I guess you agree?
- [23:01]
Lawyer
Yeah, I mean for me like as I tend to, it's like, it's just a feeling, right? I'm not a trader, I'm not staring at these charts. But really like I've been top blasting and buying dips because like once you feel like all season is back, you really just need to not be at the top of it to make some money because like if people are bought, like if you've been around for the bear market, you know that like dips were followed by further dips. If dips are getting bought up, let's go.
- [23:27]
Scott
Yeah, I, is that going to be my signal?
- [23:34]
Lawyer
Is your name remain agnostic? Yeah, I'm gonna, I'm gonna forget the, the, all of those things. Just be lawyered.
- [23:42]
Scott
Removing neeps is like bitcoiners removing laser eyes, I guess at a hundred thousand. Right. Aren't bitcoiners supposed to removing their laser eyes, by the way? I haven't seen it, but that's supposed to happen.
- [23:54]
Lawyer
I mean, I think like McAfee was supposed to eat his dick already too.
- [23:59]
Scott
That was a million and I think his dick is dead. So I don't think we're going to be seeing that. But you know, speaking of, that was really an off color comment for everybody. Hey, he started it. He started it, he started it.
- [24:13]
Lawyer
Yeah, it is my fault, but I mean, yeah, fair enough.
- [24:16]
Scott
I'm saying I don't think you can eat anymore. But moving on to other people's thoughts here on alt season, as you said, Joe, I mean we just crossed 4,000 on ETH, right? It's still massively lagging Bitcoin. It's 20% off, an all time high from previous cycles. But do you think that this is going to be the time finally? And if ETH goes, what does that mean for the kind of alt season path and all of those tokens and memes and NFTs that have been on ETH and kind of led previous cycle.
- [24:55]
Joe
Oh man, I don't want to start with NFTs, but I, I, I do think that alts held up incredibly well in that little like flash crash that we just had.
- [25:03]
Scott
Right.
- [25:03]
Joe
Like, you know, so I think they are getting, they're getting bought up and I don't know who's buying them all up. Like I said, I don't know who's buying up these especially older coins that are out there. But I think there's enough mechanism in place with the number of liquidity pools that are out there. People that have traded these things, bag holders that have been holding on to these things. That are kind of finally celebrating. But at the same time, you know, if you zoom out on some of these charts, I mean these things are still down 80%, right? It's very few are actually hitting all time highs again. And so you just have bag holders, you have people that have been, you know, unfortunately with retail, it seems like people kind of hold their losers and they sell their winners. You know, if you're listening, you should, and it's not financial advice. You should always do the opposite, like hold your winners and double down on your winners and sell your losers. And so I think you're, you're maybe seeing people that are coming back and saying, okay, what should I buy?
- [25:54]
Scott
Right?
- [25:54]
Joe
And I'm sure everyone here is starting to get the text messages like, hey, my XRP is coming back, like, what's going on? Or congratulating you on 100k. You know, even though it's, it's not really a huge deal, I think for everyone that's kind of been sitting in the space, we've all just kind of, you know, known that this is coming. But I do think that there are specific projects that are in the top 100 that, you know, are sitting at certain, you know, couple billion dollar market caps that if eth moves to 8 or it moves to 15. I mean, just the way that this market trades is people say, well, if ETH has a market cap of this, that this project should have a market cap of that, right? We're still in kind of this meme coin craziness. The thing I'm looking for is what else on the app layer actually has utility, right? And like right now it's like we have one project that we can brag about, which is polymarket, right? And they're going to go into a quiet period here because it's not the election season and they're going to try to kind of figure out their strategy, but we really have nothing else to point to.
- [26:55]
Scott
Right?
- [26:55]
Joe
We have infrastructure with layer ones and then layer 2, 3, 4, 5. On top of that we have Bitcoin and then we have meme coins, right? And that is the real application that's out there. We still don't have app layer. Right? You know, and I know Bitcoin's utility is Bitcoin's utility, but I think we need to figure that side out. I'm bullish because I mean, if you play around some of the wallets and you haven't been in the industry in a while, you're going to come back and say, okay, like this is a lot easier. I can move, you know, I could swap from chain to chain on Coinbase's or on, on Unis. Swap now. And I couldn't do that before.
- [27:28]
Scott
Right.
- [27:29]
Joe
And that's really simple for me.
- [27:30]
Scott
Right.
- [27:30]
Joe
So I think that it's the, the UX has gotten a lot better since a lot of the people have kind of come back and I think that's going to be helpful for us. But again, they're going to buy these things and then at some point they're going to say, what do I do with it? And I don't think NFT is the answer. I mean, I love NFTs. I have a lot of NFTs. It's, it's fun to be in these communities, but it's just not enough utility.
- [27:51]
Dave
Right.
- [27:51]
Joe
Like I could just like, why not just use, you know, in your Apple wallet a ticket to something or you know, paying with, with Venmo. Right. Like these things, you know, it's just a little bit of bragging rights on Twitter to have like a board ape. It does nothing for you. And so I, I just don't see that market coming back in the same way. I, I hope that brands can potentially utilize the technology in some way, but it's just not, it's just not there. So I, I don't think, you know, I think the reason you're seeing these things bump a little bit is people like, oh shit, are we going to rotate into NFTs? And I think obviously floor prices are changing because ETH is moving up.
- [28:26]
Lawyer
Carl, have you tried breeding crypto kitties? Oh, sorry, it's Badger. Go on.
- [28:33]
Scott
I know I interrupted you and I didn't hear you, but yeah, it was a cryptokitty joke which you need a crypto kitty joke anytime we talk about Ethan ftse, but Carla, you can go ahead.
- [28:41]
Panos
Yeah, I respectfully have to disagree with Joe on this because I think we are going to see a huge run up in NFTs, especially ETH NFTs from the original cycle because there are several high profile artists who are inevitably going to get bought up as people start to realize gains during alt season. We're already seeing the punk floor go up. Punks are a symbolic flex in the space and they are a store of value to people who see them as that. The board eighth floor is closing in on 100,000 again. Pudgy Penguins are at 60,000 and I think stuff like XCOPY and all these other significant artists from the space, it is inevitable that you're going to see the transfer of wealth from crypto gains to NFT art. Just like people transition to real estate and high end watches. This is just another extension of the cycle and I don't think it's going to cool off. I think it's going to get bigger.
- [29:37]
Scott
Will we see new innovation though? Or is it going to be those few huge PFE projects like punk, sport apes, the ones that have become viewed as I guess the higher quality or tier one or blue chip? We going to actually see some innovation in the PFPs or is there some new wave coming with NFTs in your opinion?
- [29:56]
Panos
I don't think that PFPs are going to innovate. I think that you're going to see the PFPs that were respected and sought after as grails, quote unquote in the original cycle probably continue to sustain value. A lot of the other stuff is going to go to zero and be tax harvested or burned. But you do have use cases for NFTs, I think for ticketing and for purposes of breaking the cycle of going through intermediaries. I think if you're an entertainer or if you're a brand and you can develop an ecosystem and directly reward users through an nft, I think there's a value prop there. I think what's going to happen is the price of getting into these things is going to go down exponentially. When you see things like Solana's innovation with respect to their lightning fast transaction protocols and SEI and SUI, it's just going to become exponentially cheaper to launch NFTs on a large scale. And when that happens, I think it's just going to be network adoption and it's going to go up because it is the easiest way to directly communicate with your fan base and not worry about losing it if the intermediary cuts you off.
- [31:08]
Joe
There's no real world application that no one cares. I mean we proved last cycle that these brands that tried it, they all failed and those projects have all been scrapped at these big brands. The brands are done with NFTs and they won't launch them again because the.
- [31:21]
Panos
Brands I think came in early and experimented and yes, they did pull out. But I don't think that changes the fact that we're getting more digital and we're getting more on chain and I think you're going to see more individual entertainers, influencers and I think you'll see brands come back just like Tradfi has finally acknowledged the value and the utility of this stuff. I think you're going to see brands acknowledge it. I could be wrong, I could be right, Joe. But I think.
- [31:49]
Joe
Do you think the hawk to a.
- [31:51]
Scott
Launch of that was my question. Well, that's what I was going to ask. Are they just going to go to meme coins where it's an easier money grab than even try the NFTs with utility? I think that was kind of my next question, Joe.
- [32:02]
Panos
I think the problem with the meme coin cycle, and I've commented extensively on the dangers for celebrities and the legal pitfalls of celebrities jumping into meme coins, especially if they're picking developers who are not necessarily looking out for their best interest and they don't understand the technology. I think you can, you can clearly see that Hock Tua was an epic failure and she's done tremendous damage to whatever quote unquote brand she built based on this viral meme. But I think when you're talking about the difference between fungible meme coins and non fungible, I think fungible tokens become the currency of the, of the ecosystem. You look at what mother Iggy Azalea is doing with her token, I think she's doing it right. She's building an economy around her token. Now the NFT is a non fungible membership option. But I think if you're talking about currency, I do agree, Scott. I think the meme coins are an easier lift because they're, they're fungible, they're easy to launch, they're cheap to execute. And I think as we continue to see clarity in the regulatory space, you're going to see more people turn to that as a currency and a mean of a means of crowdfunding.
- [33:18]
Lawyer
Yeah, I mean it's not surprising, it never surprised me that the top down, like the brands aren't going to be able to do it. It's like it's just like Xerox, you know, had trouble with new things that came in. But I think we did see with the last cycle that some of these brands that began as communities that are digital NFT communities did survive and may be coming back. I think it's early to say it's just a, you know, a flash in the pan. And I think what it showed us is that like, I think a 10,000 NFT collection is going to have a lot of trouble in this era. But as digital communities become more popular and digital flexes become more popular, that's still going to be a thing. And I think 10,000 is a much smaller number when you start to include the swaths of people who will start using crypto now. Again, like to your point, I don't know why they're going to start using crypto. Poly markets is the one thing that you can point to. But people are building crypto rails. Like there are investments and things in the financial space that people would be doing all day and are even starting to gear up to be able to do with Trump coming into power. So I think you'll see those things at least mostly in the financial space, maybe some in the digital communities. I think a lot of that'll be bottom up grassroots. But a lot of this is coming and at some point these businesses will figure out how to be cool. I don't think it'll be Nike's.
- [34:45]
Scott
From the flexing perspective, online identity and having something scarce that attaches to that. I can tell you anecdotally, I was in Miami just for the day for Art Basel Tuesday. There was definitely more of a crypto presence than the past few years. I was there with Micah Johnson, who obviously is a physical artist, who also was pretty big in the NFT space with AKU and some of his other art. But the talk around town, because we went and just checked out some car dealerships and looked at watches, the normal things that crypto dudes, I guess do, was that the crypto money in Miami, certainly in a round is back. Like private jet prices are going up, watch prices are going up, car prices are going up. So this newfound bitcoin wealth and crypto wealth that's coming is already starting to see sort of a meaningful push in the luxury goods market. And I do think that inevitably comes online as well.
- [35:40]
Lawyer
We just saw a guy eat like a hundred million dollars banana or something, right?
- [35:43]
Scott
Like a $6.2 million banana. It was a $6.2 million banana dot.
- [35:48]
Lawyer
Now it's worth more.
- [35:50]
Scott
I don't even want to know what he paid for the antibiotics to go with a like 4 year old banana that he decided to eat or whatever. But Justin sun, do you think he'll.
- [36:01]
Joe
Resell that banana.
- [36:06]
Scott
Maybe the peel so that we can be more appropriate? Tron did just make it, right? I mean, after all that. So Justin Sun's a perfect example. I mean, you know, he's one of the wealthiest people in crypto and I can't even begin to calculate what that looks like with Tron at an all time high. Right. And so that kind of.
- [36:27]
Zach
Sorry, Scott, I had a leg there, but that's a fungible banana. They actually keep changing that banana out.
- [36:34]
Scott
Thank you.
- [36:36]
Lawyer
Yeah.
- [36:36]
Buzz
The artwork is the concept not the physical banana itself.
- [36:39]
Scott
I want the old ass banana, and I want to see somebody eat it. I mean, that's the story here. Eating a new banana, it sounds like.
- [36:46]
Lawyer
Less of a story. I ate a banana yesterday. That's not a story.
- [36:50]
Scott
And it could have been the banana. There's nothing scarce about that particular banana except for that they chose it. But either way, I think if we're looking for signs that crypto money is back, buying $6.2 million bananas and eating them, I think is a. Is a pretty good one. Zach, yet you haven't really had an opportunity to speak. I mean, how are you viewing right now the way that the cycle is evolving here with not the volatility, but Bitcoin hitting 100,000. I know that you primarily focus on bitcoin. I mean, what do you think is likely coming now?
- [37:19]
Buzz
Look, I think Bitcoin, 100,000 is a huge. A huge deal psychologically.
- [37:22]
Scott
Right?
- [37:23]
Buzz
Obviously, in terms of price, it's not that much different than we had last week. But I think the fact that bitcoin has accomplished this, like, there's a part of it that feels like we were right, sort of regardless of what else happens to the rest of the cycle. Like, bitcoin is a real thing. Bitcoin. I was sort of disappointed. Bitcoin didn't hit 100,000 on the day that Gary Gensler announced his resignation, but it happened on the day where Ken Griffin and Powell. I lost that bitcoin at the. At the New York Times deal.
- [37:59]
Scott
Zach, you're having some connectivity issues. I don't know if you can hear me, but you're glitching in and out pretty bad. But he was making the point on the way. We saw. Yeah, okay. Sorry, Zach, You. You glitched out there, so we kind of missed you. We heard Ken Griffin and Jerome Powell, which was. Which was great. I mean, the last week, you have the president of. Future president of the United States congratulating, Obviously, Bitcoiners on $100,000 Bitcoin. You have Putin making comments.
- [38:25]
Buzz
Sorry about that.
- [38:26]
Scott
Can you hear me? Yeah. Putin making comments about bitcoin. And then as you pointed out, I mean, Jerome Powell in one of the most jumbled and clearly lacking of understanding comments, at least, was talking about bitcoin. Kind of talked about it as digital gold, but also as a speculative asset and not a store of value. But that implied that gold wasn't a sort of value. It was kind of a message. But Ken Griffin basically saying that people want agency over their lives and they View crypto in that way. I mean, you know, Ken Griffin is a Larry Fichter. Biggest names on the planet are talking about this. I mean, that's the point you were making as.
- [39:00]
Buzz
Yeah, yeah, I think it's, it's an incredible moment of validation. The other thing I'm watching now, even though I'm mostly focused on Bitcoin, like, the eth ETF inflows seem to be accelerating way like we saw early on with bitcoin.
- [39:13]
Scott
Right.
- [39:13]
Dave
Like I'm.
- [39:14]
Buzz
I bought some ETH as a trade here. I'm interested to see how that goes. But, like, that is interesting to me. And then last night, right, the appointment of David Sachs, who's been a longtime supporter of bitcoin and investor in lightning companies and, you know, and LP and various crypto funds to be the crypto and AIs are like, you know, that's pretty exciting too.
- [39:39]
Scott
Every appointment is like, more exciting for the crypto industry. And I think the financial industry as a whole is more exciting than the last one. I mean, even, you know, listen, to his credit, Anthony Scaramucci, who is one of the largest critics you could find of Trump, has been repeatedly tweeting about these appointments saying they're incredible. He has to give credit where credit's due that Trump's on fire. So when you have the biggest skeptics even coming around and saying that these appointments are great for Wall street as well, not just crypto, I think you have to pay attention. Go ahead, Dave.
- [40:11]
Dave
Yeah, I think that the. Not only is the tax appointment incredible for, for the reasons that, you know, in terms of what he supported, but the fact that it's crypto and AI together will solidify the narrative of crypto being the payment rails that a digital AI policy will need. And, you know, that's a narrative that was out, I mean, last year. I mean, you know, it's about. I think it was last, you know, a while ago. And it, you know, there was. There were some things that, that started to take off as a result. But when you start asking yourself, you know, we had defi summer and, you know, NFTs or whatever, I mean, the next one, next Big Leg up, could very well be the confluence of crypto and AI. So watch this space in the future. The other point that I wanted to make was one of the funniest tweets I've seen because it was so clueless. It's almost. But it's embarrassing, is Lloyd Blankfein, the former head of Goldman Sachs, basically saying, I don't Understand why if you're pro the dollar, you would cheer Bitcoin completely misunderstanding the game theory and everything that's going on around it. It's just, it's funny how it's gone from fud to try to knock Bitcoin down from people who realize that it forms competitive threats to their particular businesses to kind of whining. And, you know, it's, if you want to get your sign of the there, then you win part of the equation. We are clearly in the beginning parts of there, we win. And that kind of whining is part of it. It's almost a plea to like, please explain to me why I don't understand.
- [41:42]
Scott
Yeah, we watched Jamie Dimon do that and cope repeatedly. Sorry. Go ahead, Buzz. I don't know if you're speaking, but I can't hear you. Go ahead.
- [41:54]
Zach
Yeah, I agree that some of those next narratives could certainly be AI and that confluence with Web3. Dave, that was a great point. And we do have a sponsor today, it's BET Arena. So they're kind of at the confluence of Web3AI and sports. So I do want to throw it over to BET arena and maybe just give an overview of exactly what the product is and maybe a little bit of an elevator pitch there. Betterina, just testing your mic here, Scott. Not sure if you can hear them.
- [42:34]
Scott
I cannot. So must be having an issue. Gonna have to bring them down and back up or.
- [42:39]
Zach
Yeah, yep, I got it. I'll deal with it.
- [42:44]
Scott
In the meantime, I think we can. While you're working on that, we can continue briefly the conversation. I mean, is anybody surprised that Ken Griffin from Citadel is coming around that you're hearing Jerome Powell talk about this Putin? Like I said, I mean, it just. There's nobody. Everybody's going to have to have an opinion. In my opinion. Right. You're not going to be able to remain silent on Bitcoin.
- [43:04]
Dave
Ken Griffin coming around is one of those funny ones. Citadel has been in the space already. It's just him basically publicly kind of admitting it because now he can. You know what, what is a point that people always fail while you get this guy up is how many of the large financial firms that have significant exposure to regulators have avoided mentioning it in public because they didn't want regulatory pressure. Citadel was already doing trading in crypto, but now it's like, okay, I can do this, so they're not going to hurt me anymore, so screw it. And I think you can see a whole lot of that happening.
- [43:43]
Scott
How we doing over there? I see A month.
- [43:46]
Zach
I think we're doing good. I'm gonna check your mic here. We're just asking for elevator pitch as we go into an AMA here. Seemingly you now went on mute. I did hear you before.
- [44:00]
Scott
That's your mic better. Okay. George? Yeah.
- [44:04]
Carlo
Can you hear me?
- [44:07]
Zach
Yeah, yeah, we can hear you.
- [44:09]
Carlo
Thank you for having me. Sorry, it was with the Microsoft. We have some problems in the mic.
- [44:16]
Zach
No worries. We're just transitioning here to the ama looking for a like an elevator pitch on BET arena. Because Dave made a great point that we're kind of looking for the next narratives. Right. And there's this confluence of AI and Web3 and you guys are really at that confluence of AI, Web3 and sports. So just wanted to get to a bit of an elevator pitch.
- [44:37]
Carlo
Yeah. So veterinary is a very straightforward concept. So what we are doing, what we are trying to bring to life is what we call the sports citizen journalism. This means that we are creating a platform that is focused on sports. So we have statistics, news, forecasts, results and everything that is related with sports. And the goal is very simple. Give content creators a media platform where they can create content and get most of the earnings. Allow users to access the best sports content and get rewarded for their interaction on the platform and allow investors to see all these unraveling and see the BTA token value multiply exponentially. So with these goals in mind, what we are presenting is an alternative to traditional sports media publications that's often pay very low to or a fraction of what they can make on beta when authors can create content. And I think we are the only sports platform that is building something like this because if I can recall correctly, there's no other platform that is focused on sports that allow users to create their own content and get rewarded by it. And that's what we are trying to do.
- [45:56]
Zach
Have you as the price of bitcoin has been reaching all time highs because it's probably been about a month or so since you and I spoke last and Ethereum is going up and the industry in general is seeing more users. Are you seeing sports and web three in that category increasing the pie? Like are more people coming in? Is there more interest?
- [46:17]
Carlo
I think there's more interest. Every time the crypto market grows, more users get interest on projects, including Web3 projects. I think sports is still. There's still lots to explore on sports. I really don't. Besides sausages and chili's and the fun tokens and stuff like that, I don't see very well renowned sports platforms That I think that's so, I think that that's a market, a very big market that's still to be explored. And that's what I was talking about. Veterina fills that space because what we are doing and bringing Web3 to the sport and allowing users to create their own content is something that I even statistics and news and results platforms, I don't see many of them on the Web three maybe because sometimes web three projects, always trying to create something very high end and innovative and sometimes forget that people sometimes just want something like similar to Web2 platforms but that allow them to get more rewards and get ownership of their content and stuff like that.
- [47:40]
Zach
I'm a big sports fan and I know that two headlines that have hit at least my timeline. One has been that I think it's Russell Okung during the COVID era, he decided to take 50% of his salary in Bitcoin. And that $6 million that he took. His salary is worth something in the tune of $20 million. And then it's also Dave Portnoy, who's the founder of Barstool Sports, he bought, I think it was a million dollars worth of Bitcoin at $10,000. And then he met the Winklevoss twins. And the Winklevoss twins were looking to orange pill him, but they actually did the exact opposite. He decided after meeting with them that they were a little bit too crazy for his mind and he dumped his bitcoin right after. So he's definitely regretting that right now. And I bring up those two examples of sports and bitcoin hitting the news because I'm wondering who is your target consumer? Is it a beat writer? Is it athletes? Who are you exactly trying to get signed up and start using the platform?
- [48:45]
Carlo
Yeah, I think the most interesting part of Veterina is that everyone can become a sports content creator. So of course, if we bring athletes and renowned names to the platform, it's always a way to bring in other users into device content creation. But I think we went really to make it like democratize the content creation. So we really want everyone. And everyone that likes sports has something to say about the events or the results or their teams or their players. So I think we really want to incentivize everyone that likes sports to be able to create content, written content, articles, podcasts, videos, whatever. But they think it's best for them. But we want everyone to be able to create content and be able to get most of the money from the content they create. So removing the middleman, removing the issue with when you work as a freelancer, sports writer, you have to usually work for publications that keep most of the menu and you receive a fraction of the money for the content that you create. And that's something that we want to remove.
- [50:07]
Zach
So it sounds like it's really independent content creators. So diving into that, what are the existing avenues? I guess an independent content creator right now can post on TikTok, maybe they have their own blog, maybe they can be posting on YouTube or whatever their content platform may be. Each of those kind of have their own monetization model for the indie creator. And my question is, what would your pitch be to them? Why it's better for them to create content on BET arena versus some of the other avenues that they have right now to monetize their content.
- [50:46]
Carlo
I think if we think about platforms like X or even other platforms, some of them are very politicized and you have lots of news about lots of stuff. And the difference is that our platform is only focused on sports. So if you are a sports fan and you went to, you want to check the results of the result of your team or follow the events that is happening live, or see the statistics, you go to Batarina. So everything that is related to sports is on Batarina. And that's the difference. If you go to TikTok, we have lots of stuff, a lot of video are going to be pushed to see other things and sometimes you just want to see sports and you don't want to see other stuff and need to try and find out where the, where the sports creators are. And that's the difference that we are really focused only on sports. So if you are a sports fan and you want to read articles about and content about sports, you can do everything on inside our platform. You can see, you can read content, you can see videos, you can check the results of the teams, you can see the starting, the statistics of the players, you can see everything. So it's, it's a world of sports, as we call it. And that's the big difference. It's something that everything that we do and bringing users, we bring the users that the authors are seeking for, it's the ones that are sports fans. And TikTok has everything, everybody, everyone. And it's more difficult to focus on a specific topic.
- [52:22]
Zach
And I remember last time we spoke we had a good discussion about the network effects as it pertains to social media and just that more users creating content, creating that network effect. And it's hard to identify like does the chicken or the egg come first, like do you need the content there to attract the users or vice versa? And we had a good discussion about how you guys are leveraging AI to actually build in a pretty robust content stream. Can you touch on that since we last spoke? Like what how you guys have been leveraging AI to build out this the content generation for the platform?
- [52:55]
Carlo
Yeah, including we are now creating a new platform that is going to work inside Veterinarian and also for our partners. This is called the terminal. And what we are doing is so we have millions of sports data points that we plan to use to generate the sports content and we are going to use different language models where the users or the partners can even select what language model is going to be used to create the contents. So initially it's going to populate AI contents to the sports for the scores platform for the veterinarian and after that we'll allow access to partners who want to subscribe and create content for their own platforms. For example, if you have a WordPress offer, you write to Medium or any other platform that you create content, you can use the terminal to generate that content for you. Using our data endpoints, this will allow to generate content for specific events, analysis, predictions, news, you name it and I think it's very interesting. So this will be used to create content for our own platform and also allow partners and the subscribers that want to populate content through their platforms or where they create content for.
- [54:17]
Zach
I know also when we last spoke a big thing that you guys are working on was your pre sale and that was really the call to action for the audience. Last time was to take a look at the pre sale and I know there were four rounds. I would love to get an update on how that's going and maybe another call to action to the audience if there's another different way to get involved today.
- [54:41]
Carlo
Yeah. So as I was talking about, we are now in the third round of the public pre sale and the great opportunity that we have here is that we are already a platform that is profitable. So we are in the market for five years now and the public pre sale is just a way to get more investment, but more importantly is to create the bta, the token that is going to be used inside the platform. So everything that is going to happen inside the platform. So if you are an advertiser and want to pay for ads, you are going to use the bta. If you are a subscriber for the terminal, you want to create content, you have to pay with bta. If you create content inside the platform and get rewarded by it. And users can want to access the exclusive content so they have to pay with bta. So the BTA has an enormous and besides that, we want to add BTA to our partners that we have right now, 26 partners, most of them betting websites that we want them to accept BTA on their own platforms. And all of these utility will make the usage of the BTA grow and with that the value of the token is going to obviously go skyrockets and that's a very good opportunity now to get into pre sale where the investors can get the token in a special price and with special perks and get the benefit from the continued growth growth of the platform that we have already built and is already operating right now.
- [56:28]
Zach
Cool. Yeah. Not financial advice, but if you did want to pin up the link, I can actually do it right now because I'm on it to the public presale and people are listening in and want to take a look there at the different rounds. I did just pin it up into the nest for you. But I really want to thank you for joining and are there any other, just as we're getting to the top of the hour here, any other calls to action for people who are listening in? Is it mostly the pre sale or is there something else that we can get them doing right now?
- [57:01]
Carlo
Yeah, so we launched two weeks ago the sports text. So that's publications that users can create. So if you go into the platform and create your own account, a publication is created for you automatically. Then you can customize them. The publication, you can start creating content right away about sports. And the ones that start to creating content right now will be the first ones who will be able to monetize them, monetize that content. So I think it's a good opportunity to start creating sports content now and wait for January and February when the TGE of the token is launched and we start monetizing the content of the users that are creating the content. So I think it's also a good opportunity for them.
- [57:48]
Zach
Excellent. Well, thank you very much Joe. And it's the second time that you and I have spoken, so I look forward to getting another update hopefully in the next couple weeks. And wish you guys the best of luck with the rest of the pre sale and a congratulations on where you guys have been able to come so far. Like I know you guys had two and a half million visitors in the last year, which is not a small accomplishment in and of its own. Right. And I want to thank Scott for putting on yet another great show. Lawyer Dave, Joe Panos and Carlos for also sticking around and really, really doing a great show of another crypto town hall and the audience as well. Tons of comments in here. 288 Comments, so I'll be going through those as well. But with that I want to wish everyone a happy Friday. Thanks Scott for putting on another great show and enjoy the weekend everybody. Godspeed to the markets. Bit of a crash yesterday and hopefully it's up only from here.