← The Wolf Of All Streets
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- [00:01]
Scott
Good morning, everybody. Happy Monday and welcome to Crypto Town hall every weekday, 10:15am Eastern Standard Time here on X. Thank you so much, all of you for joining us once again today. Quite a few things to talk about, but obviously I think the one that's most compelling for people is going to be why is Bitcoin pumping? It's $88,644 as we speak now. Ethereum just hit $2,100. Solana pumping $144, up almost 9% in the last 24 hours while Bitcoin and Ethereum up about 4.2%. Many asking, what is the catalyst? What is happening here? Are we finally breaking out to the upside, all of the exciting things everybody wants to talk about? I guess we can start there and then move on to the other main topic here, which is I guess it shouldn't be a surprise, but sailor buying $500 million worth of Bitcoin. But I think the bigger story there is that they've now surpassed 500,000 bitcoin hold a significant percentage of the supply, leading many to actually start to wonder if it's too much. So we can start the conversation, I guess with price. Sasha, you're looking at this all the time over at the tie, obviously. What do you think the catalyst here is right now for prices rising?
- [01:24]
Sasha
Yeah, I think it's clearly also delayed action. I know some people were expecting a Sunday pump actually to happen and it didn't happen. But there's been so much going on between the SEC crypto task force holding up a lot of meetings, meeting all the executives in the space, really trying to push the space forward with regulatory clarity. The big conference last week in New York City where Trump made an appearance, well, like a recorded appearance, but still was featured as a speaker. And even for recording, the room was packed and everybody was listening to every single word. And the main outcome of that was that his intention is clear and it is to make the US the center of the world when it comes to crypto finance. Right. So I think all those catalysts were just overdue for repricing and that's what we're seeing right now.
- [02:24]
Dave
You know, my question is we've seen a lot of publicly announced buying since we hit 100k plus, but we weren't sure who was selling. And it may be that the reason the price is going up is whoever was selling has run out of coins to sell or has decided to stop selling at this point. And so it's not so much new buy side interest, but It's a lack of sell side interest and I don't know that to be a fact, but I've just been scratching my head as to why bitcoin had gotten as low as it had for a while. So that's my two cents on that.
- [02:59]
Scott
I actually can't see who's talking because of the permanent glitch here. Dave, I saw your hand go up, but it shows as a listener. So you know who's on stage or a listener. But can you speak?
- [03:11]
Alex
Yeah, I can speak. Yeah. Well, I now understand after last week. I fully understand and feel your pain.
- [03:17]
Scott
Yeah, I'm going to jump off and come right back on as you speak.
- [03:20]
Alex
Okay, well, look, the answer to your question, which Scott will find very amusing.
- [03:29]
Dave
Oh, my God, the suspense.
- [03:30]
Joe
We lose Dave too.
- [03:32]
Alex
Did.
- [03:32]
Dave
We lost him? And the suspense right after he answered the question.
- [03:36]
Alex
It muted me, but I didn't mute myself. Can you guys hear me now?
- [03:39]
Joe
Know, guys, look, we can either have Doge or we can have working Twitter spaces, but we can't have both.
- [03:44]
Alex
And we want nice things. We want nice things. Listen, today is a beta day. Nasdaq's up 2%. And you know, this is all coming from traditional financial players. It's very rare when you see a bitcoin move like this where the funding rates on the exchanges are negative. Now, I'm going to repeat that because that's like, to put this in perspective, you know, typically when you see up moves, you see the funding rate is double average, 50 higher than average. It's now negative. Meaning this is not speculation from the per markets. The per markets aren't doing anything other than lagging. It's not speculation looking at the CME futures either. The CME futures are more or less the same, you know, premiums they've been for the last, you know, since February. So this is just spot buying. And it's spot buying probably driven by ETFs and people who are going in their Coinbase and Kraken accounts and. Or their Binance accounts and their Oaks accounts and buying. And it's beta now. Do all the things Sasha happen talked about, do they matter? Yeah, they will. And that's why Bitcoin is likely when the dust clears, to accelerate past it. But I think this is pure beta today.
- [04:58]
Simon
Good point, Dave. You know, Sasha, some of the things you said, it's like those are all knowns. We've known that Trump has been pretty bullish. You know, regulatory environment's been, you know, we've never, we've never had A moment in history, though, where bitcoin and crypto has been in a positive regulatory environment. So positive tailwinds and a positive macro environment. Right. We've been, you know, the market's been completely, you know, like broken down here by these tariff talks. April 2 is the tariff deadline. Trump got dovish, or at least the reports are that they're getting dovish on tariffs. You've got the market ripping, Bitcoin's ripping. That's it, right. There's nothing else like him attending a conference did nothing for us. Those are all things that have been happening. He's been talking about the market for a long time. He's been positive on it. He launched a token. We know all of those things, right. What, what wasn't priced in was the dovish talk on the tariffs. And I think maybe, you know, what we're possibly seeing is the actual unwind of that. And he said they're going to have reciprocal tariffs now, which means that, hey, we're just going to meet them where they are. And so it kind of sounds like he was not walking lightly or carrying a big stick. He was basically just saying, hey, we're going to have these massive tariffs. And now he's backing off of that. And that's why the market is basically making that happen. And so I think what we, what has happened is we have priced in higher tariffs than what we think we're going to get and things are going to kind of unwind from there. But that's just my take.
- [06:32]
Joe
So I don't know that it's that we priced in hyper higher tariffs. I think it's that the market was pricing in or just dealing with the instability of having no idea what was going to happen, which is kind of part for the course, with more panic.
- [06:45]
Scott
Right. More uncertainty and now that there's a little bit more certainty.
- [06:49]
Joe
Exactly. And so backing off it, I think is why you're seeing like some good recovery on and people feeling like they have a good view, which, like, I don't know, the next time they introduce a policy that feels half baked or people don't know what it's going to do, will drop right back off in the same way and then come back up. It's just a roller coaster.
- [07:07]
Alex
Well, I do think one thing's different. We mentioned that this morning, the fact that the market was dropping, that the liberal media is going crazy on musk and all the other stuff, which all is interrelated. It is not. It was unsurprising to see that the Secretary of The treasury go on the talk show circuit, right, and tell people, hey listen, you know, we got this, this is going to be calm, we have an intelligent plan, et cetera, et cetera. This is, this tells me that this administration realizes that there are certain areas where they don't want to fight a multi front war and they're going to focus or they're going to focus. So this morning's news that there won't be anything crazy, that we're going to be targeted and negotiated is basically a recollect, is basically the idea that, okay, wait a minute, we don't need to push that fast on this stuff. And where they really want to stay pushing fast is on the domestic agenda. And I think that that's, that'll give them air cover because there's nothing that motivates protesters more than getting poor. And you know, and if you take that away from people, I think that that's, that's the, that's the propaganda war within the war that you're seeing here. So it's really not all that surprising to me.
- [08:16]
Scott
I can hopefully I can speak. Dave, I do have to say just as a caveat here, you did an incredible job last week and thank you for covering for me that whole time because always a glitch when I tried to get back in this spaces it literally said the spaces does not exist. That was the first. But eventually it did, did make my way back in here obviously. So I, I think that everyone to some degree agrees that this is a macro driven rally, that it's, you know, alongside a calming of markets that said, you know, does that mean that the bottom is in and we continue from here? I mean Dave, we talked about this maybe on the spiciest macro Monday of all time this morning. Just an incredible hour. But Arthur obviously saying, hey, there's a better chance. We were talking about Arthur Hayes saying Bitcoin now goes to 110 instead of back to 77 and if it hits 110 it's all systems go. So I guess opinions here on whether the bottom is likely in and this is just another bull market correction. I'd love everyone's takes on that and then we'll move on to Saylor there for you then.
- [09:24]
Alex
Well, you know what I think because I publicly said the same thing except I said it when it was, when you and I were buying at between 77 and 78. So yeah, I said it was a tradable bottom two weeks ago. Nothing has changed for me. I just, you know, it is what it is. I mean, I think that there is institutional buying. It's very clear that the analogy I used this morning was there's an iceberg that doesn't chase. I don't think the institutions are buying at 88. I think they were buying at 85, 86, 87. And if it stays and stabilizes around level in the next few hours and yeah, maybe they'll come back in and be passively buying. But the institutional buying tends to be less FOMO driven than what we're used to in the crypto markets. But what we haven't seen is people buying in the crypto markets. And you'll know that when leverage starts coming back in. By the way, I was curious if anyone's following it, because I literally don't. Did that hyper liquid guy get liquidated or did he close himself out first? It would be really interesting to know.
- [10:19]
Simon
Because, you know, he closed himself out. Yeah, he made 9. $9 million and then he went long on eth.
- [10:26]
Alex
Yeah. So he's, he's a smart trader and he's gotten it. That's what I kind of figured was going on. But look, if you try to trade this market and you're a professional, it's a great market to trade in. All the retail people who listen to this and, and aren't really trading are dentists, doctors, lawyers, whatever. Don't trade it to stack sats and stay longer. DCA in when you get cash. I mean, I can't be stronger than that. Than that. I think it's that simple. You know, you really. The big for the problem is in a trading market, when I mentioned that it was beta today, is you can get flushed out of your positions very quickly, but if you know what you're doing, it's different. And I think that that's really the one piece of advice. It's not investment advice per se, but the one piece of advice I would give. You know, as for Saylor, I'd like to let other people comment. I talked too much last week, so.
- [11:13]
Scott
Well, you know, talking about the bottom here, Dwayne, maybe since you focus on macro, but also obviously look at Bitcoin. Do you think that the bottom of this small stock correction has to be in for the Bitcoin bottom to be in? And what's your view on whether that's the case?
- [11:27]
Ran
All right. Yeah.
- [11:28]
Dwayne
Thanks. Good morning. Well, I would think there's a strong. I don't want to obviously say yay or nay, but I would say that there's a strong possibility that, yes, the bottom is in. I mean, what I was really looking at was inflows on ETFs. I'm sure you guys talk came in here a couple of minutes late, but I'm assuming that you talked about bitcoin ETF inflows rebounding. And that's one thing that I was really looking at, that versus gold because gold has come up to record highs here and we've had inflows on gold. ETFs surpass Bitcoin. So that was a concern for me, at least in my world here because gold's going to have consistent demand drivers with central bank buying and then also some of the geopolitical events. But with bitcoin, I think a lot of the uncertainty around tariffs was one of the problems here. Now that we're hearing a bit of a pullback in regards to the tariff policy coming out of the Trump administration that gives a little bit more certainty to markets with bitcoin. So if one wanted to say that the bottom is in, then I could agree with those terms as long as this sentiment stays where it's at. Just in regards to some of the bigger events that are happening. So really how the Trump administration is going to approach geopolit political events, what's going to happen with tariff policy come April? And some of those, you know, some of those minor, you know, some of those minor issues over the big macro issue of uncertainty here.
- [13:04]
Scott
Anyone else, specific thoughts on whether the market bottom is in or not? Otherwise we will move on to Saylor who now owns was it two point? I don't have it in front of me, but over 2% of the supply surpassing 500,000 bitcoin owned by strategy. Of course, all of this coming from creative debt instruments and strategies to buy bitcoin. And a lot of people starting to scratch their heads and wonder if it's too much. Simon, you've been here probably the longest, certainly in bitcoin. Does one entity controlling that much of the supply at this point concern you?
- [13:44]
Tommy
Well, we always prefer more distribution, but unfortunately people get the bitcoin opportunity and it doesn't change. While it changes people's time preference, once they get it, it doesn't change who figures that out. And so, you know, that's, I don't think it changes that wealth distribution style of thing. And so, you know, Saylor is, I think, yeah, passing the 500,000 mark. And clearly this is going to go on for as long as it can. The last round of products are slightly concerning in that they promise a. If my understanding is correct, a perpetual 10% dividend paid in dollars. And it's not just cash strife. Yeah, yeah. So now in any kind of significant market correction environment, depending on anyone that can reverse engineer that balance sheet, which clearly requires a significant amount of sophistication at this stage in terms of who goes ahead of who and what product is launched next and then where you would fit in preference. And I've got to be honest, I do think understanding preference and what would happen under a Chapter 11 scenario is actually an important indicator when like investing in this product just, just because of the sheer complexity of the cap table. Now I also do believe this is highly speculative, but I actually believe that strategy has now become a US Government proxy. And so if you wanted to create a load of dollar products that make the product, the, the company more and more risky and you want to make it strategically more risky to interest rates flows and manipulation than it is there now. And if the US Government needed to acquire a bitcoin strategic reserve, doing it via a proxy that could be nationalized would be probably the best way of doing it. And there's no other way of getting so much bitcoin in an environment where you need it. At the same time, its strategy to kind of with all the stablecoin regulations that are now happening, there's a massive race to control the future of the dollar. Elon Musk came out and kind of talking about owning 50% of the entire financial system, financial flows and payment flows. OpenAI just came out and is working with Visa in order to create a stablecoin wallet. I speculate that, well, Trump also wants a piece of that as well as all the traditional players. So you can see that there is a clear strategy and I think it's at the US government level to be able to have the possibility, in case it was needed to get hold of a significant amount of Bitcoin through the nationalization of strategy and also have a stablecoin standard where we're kind of moving to what could potentially be a pre Federal Reserve free banking system where everyone's competing to issue stablecoins but on backed by Treasuries and non fractional reserve. It's a very, very interesting time and I do like to speculate on these future eventualities. And I think the strategy at this stage is kind of a proxy for a strategic government play.
- [17:29]
Scott
Alex, you got your hand up.
- [17:31]
Joe
Yeah, I think I've probably been one of the most consistently uncomfortable people with microstrategy and what they're doing for the last six months or a Year on the show. There's two things that I don't like. Number one is I don't like heavy concentration. I think it is crazy how many people who are purporting a decentralized, you know, non governmental currency who want strategy to have a million bitcoins and the US government to hold a million bitcoins and a bunch of Middle Eastern governments to hold half a million bitcoins each. Like I get, it'll pump the price but the more that we concentrate the supply, the less useful it is and just more importantly, the less use, the less likely it is that we ever get anywhere near this actually being adopted widely by people as the cross store value. So I've always been uncomfortable with it for that or disliked it I'd say for that perspective. And then you know, in terms of like the debt play and the convertibles they were running, I came around enough to understand why that particular play wasn't a particular problem. But the problem with it is that you see now like they started building up this massive market cap and getting really, really rich running it. They tapped out the market for that now though. But I think they're addicted to like the leveraged accumulation of bitcoin and now so they have to start looking like what's another product we can do? What's another product we can do? And if you REWIND, you know, 25 years, 20, 25 years to the early 2000s, you know there's nothing wrong with mortgage backed securities, right? The entire concept is totally fine and reasonable and increases liquidity in the marketplace. But then people want more and more and so you start doing more esoteric and more aggressive and you start rehypothec over and over again and you start stacking into, I forget, sorry, who it was who was talking about, Simon was saying it like that cap table is starting to get really, really complicated in ways that, you know, maybe, maybe one or two people inside micro strategy actually understand what's going on there, but maybe they don't. You certainly can't see the unknown unknowns in it. And so I think you do start to get into a really dangerous place as they start combining a lot of these different products where in a sharp downturn, which, you know, it's not crazy for crypto to drop 10, 20, 30% in you know, a few days or a week or something that could again, we just don't know what the implications are. And I think for something where we're trying to say this is meant to bring stability to the world and to Financial systems and things, it has the risk to do the opposite.
- [20:13]
Scott
Simon?
- [20:15]
Tommy
Yeah, I also wanted to note as well that there are more products to try and push more liquidity into Microsoft strategy as well. So they, there was the announcement of a lawn, the launch of a bitcoin convertible, no etf. So anybody that is doing the convertible strategy, which is a marathon riot and strategy, they're creating an ETF of that now. So now there will be flows in, you know, pump and then you can imagine all the different products. So we are getting to look like a mortgage backed security type of environment with leverage for protection, a downside, and all of these very sophisticated products and you just don't know what people are going to do with these things. I do believe that this is pointing towards something that could be the cause of a massive liquidation cycle at some point in the future, which doesn't affect Bitcoin. It doesn't change my analysis of Bitcoin at all. But it does create an attack vector for severe manipulation in order to acquire a lot of bitcoin by a sophisticated player that has vast access to capital, even at the Federal Reserve level. If you, if you wanted to strategically acquire a lot of bitcoin. So watch this one.
- [21:41]
Scott
Tommy.
- [21:43]
Dave
Hey. Simon was cutting in and out for me. I don't know if it's my connection or everybody else's, but can you hear me fine?
- [21:49]
Scott
I hear you're fine. And he was okay to me. But no glitch surprises us here.
- [21:53]
Dave
Yeah, I think Michael Saylor, when he spoke, I guess it was earlier this year, quite early this year, maybe late last year, and he talked to investors in MicroStrategy about forming a partnership with them. He said one thing you know for sure about him is he doesn't plan on, is he won't be selling any Bitcoin. But with the new instruments that he's launched, which require MicroStrategy to have cash to pay out and service these instruments, the question becomes, well, can he just keep selling more of these instruments and increasing his debt pile to pay off the preexisting instruments, or at some point will some sale of bitcoin be necessary? And I think that's probably the thing that's most concerning with, with analyzing what he's doing. It doesn't look like there's been a tremendous amount of demand, frankly for Strike. And we haven't seen like Strife announced that it's $700 million, I think in terms of its initial offering. But in today's announcement, he sold like $600 million worth of shares at the market and $1.1 million worth of strike. So we're not really getting close to, to a point where that's becoming a big part of the balance sheet, but it's certainly something to keep an eye, an eye on for sure.
- [23:16]
Joe
Dave?
- [23:18]
Alex
Yeah, I think it's also worth pointing out a few things. First, when financial engineering kind of took hold of the real estate markets in 2004 or so and started driving those markets higher, it took four years or three and a half years for the chickens to come home to roost. And after a very, very large rally. So, yeah, I think Simon's right. I think there will be a very interesting event. I think the event may be when Bitcoin corrects from 300,000 down to 200,000, which would be a rather large correction. I think you'll start seeing all sorts of things happening. Obviously I'm being a little tongue in cheek, but not by much. I don't know when that will happen. I do think that financial engineering is something that does tend to signal the tops of rallies, but usually after they've driven things higher. And you can't make the argument the microstrategy has been dry, that it's buying has been driving the market higher because this is the last buy, is the first one in a long time that the market didn't open on Monday and trade below where his buy price was from the weekend. This is actually the first in a very long time that that hasn't happened. And the reason has nothing to do with microstrategy. It has to do with, with what I talked about before. So I think it's worth understanding that. But I do think it's also worth noting that there is a large demand that is likely to happen from the institutional community. A lot of it. It's very, very popular in Europe in particular. It's popular among high net worth people in the US which is structures like principal protected notes with where you give up some of your upside. So you buy this product that will give you 50% of the upside of bitcoin but will cap the downside at a very reasonable amount. And you do that in order to make sure that you don't take career risk. And a lot of, a lot of people do that. It's a very popular type of structure and I think you're going to see more and more of that as time goes on. Yes, there will be structures like more highly levered ones, you know, where you get 2x the, the amount and it's going to all be done through options and that sort of thing. And we could talk about how, but I don't think anyone really cares. People are dipping their toe in the water. This is not that popular yet. I mean, in the crypto community, yeah, we look at the numbers, they look popular. But the amount of money that is in the traditional financial system, just compared to Bitcoin's total market cap is still minuscule. And so it doesn't take a whole lot to move this stuff. So, you know, right now I'm concerned about strategy owning so much and I don't like the 10%. I don't know, I haven't read the, you know, I don't know, for example, if it gets suspended or if it's. If it's senior debt or whatever, which is I think Simon's question. But it does seem a little bit problematic. But I do think there's a lot of other people out there that start playing in the same sandbox.
- [26:08]
Simon
Real quick. Oh, sorry, I didn't see your hand.
- [26:11]
Scott
Go ahead, Joe.
- [26:14]
Simon
Okay, real quick. When you look at the market cap of Strategy hovering Now above 80, if you look at something like a BlackRock with a market cap of 150 billion, I like where Simon's head's at with some sort of unwind and what could potentially happen. But even if he can hold on for five years with the model that he has, what's strategy's market cap when bitcoin's sitting at 500k, like we're all calling for, right? And then how do you parlay that into something else? Like everyone kept saying, you know, the model is, at some point BlackRock is going to absorb them, right? They're going to get the Bitcoin and like, that's the whole goal. Right? But, you know, it could be the other way around, right? Strategy could be absorbing other companies with other cash flows that could be diversifying out of that. You know, how much, how much more money can be lent to them when they're holding this much. Bitcoin is pretty incredible. You know, the capital structure. Like, it's a public company. You know, I know BlackRock owns a ton, I know Vanguard owns a ton. You know, I would be very interested and it probably should be more transparent how the decision is actually made. Like, is it Saylor himself being able to make these decisions on a. Like, does he have like a board? Can he actually get fired? I don't know what his voting shares look like for himself. I think some of those things, like, where's that bitcoin stored, right? Like is that his house? Like does he have a paper wallet? Like is it with Coinbase? Like I think some of those things at this point he becomes like enough of a risk for the like if you truly believe in the decentralized world that we're all trying to say in it, we all have a say. At some point these things should probably be a little bit more transparent. Not to the point where like people can go and get it, but it should be more transparent so that we know it's not an issue. I mean, part of the reason that, you know, he spoke about recently that the security is there of Bitcoin is because Satoshi is gone, right? And there's a lot of risk there from a creator that could dump potentially now he's that guy. And so how does he de risk himself there? So I don't know. There's a lot going on I still believe in based on what I've heard him talk about. I mean, no one seems any more passionate about the mission than him and that goes a long way. But we'll see what actually happens here with the capital structure of the company. I think there should be more transparency though.
- [28:38]
Scott
Alex.
- [28:40]
Joe
Yeah, I think that brings up an interesting point around corporate control stuff too. I don't know what like the voting control structure of microstrategy is or some of that core ownership, but again, like if you run into enough liquidity troubles like capital structures can get changed. And again, just over, over concentration like that just creates systemic risks, which I think is a message we're hearing across the board from folks here. And it just, you know, again I think, I think it just goes against the core ethos of what we're all trying to do and looking for.
- [29:16]
Scott
Simon.
- [29:18]
Tommy
Yeah, I mean look, you've got a public company with public level disclosure. It's just none of us has bothered to go through the disclosure. So, you know, governance doesn't matter so much. I don't think it's my, It's Michael Saylor dependent other than the pitch. But we've got an incredible amount of technology now to custody Bitcoin in a corporate environment where a director can switch and there's processes for multi factor authentication. All of that innovation has happened. So I'm not so concerned about that. It's what comes next. So now you've got some products that tie you to cash, which creates an attack vector. Then you have a strategy where you might become a crypto bank, a collateralized lending company, then you might tie some of that bitcoin to margin loans, then you create the opportunity for somebody to significantly manipulate the price of bitcoin in order to create some kind of cascading liquidations. And then if you look at the mortgage backed security issues, one of the biggest issues was Fannie Mae and Freddie Mac, that it was actually governments that were subsidizing mortgages and encouraging all of these fraudulent loans. So then if you've got the US government that comes in with a bitcoin strategic reserve and it starts acquiring bitcoin, then you just open up an attack vector. Now imagine if it gets a bit funky where there's some change in the dollar through this kind of stablecoin standard model and the Federal Reserve and the treasury are on the opposite ends of an argument. You just create these opportunities. What I think is most interesting in that whole thing is that while we had our Celsius FTX blockfi Voyager scenario that was based upon fraud. What I think would be most interesting in this is we could create another leverage story that teaches everyone not to borrow against their bitcoins if this is the direction it all ends up going. But I think the most important thing is while the 2008 financial crisis scenario, at the end of the day the emperor has no clothes and fiat currency that just doesn't actually exist. So therefore you need a government bailout. But if we enter into this cascading liquidation over leverage collateralized bitcoin scenario, at the end of the day, people will realize the people that were protected were the ones that held it in self custody, didn't leverage and didn't borrow against it. And the ones that do will be contributing to it and those will be the people that have the liquidity to acquire it. So I think the lessons could be the same and I imagine when Wall street gets involved that's somewhat inevitable. But the lessons of the underlying backing of 21 million bitcoin backed by currently 800 exahash that no one can change is what will be the end story. And maybe we just need to learn that story again as we do every cycle in every financial market through history when leverage is involved.
- [32:33]
Scott
Dave, I think you had your hand up before.
- [32:35]
Alex
Well, I didn't, but I do actually have a comment. I mean that is why it's so important to understand that apart from microstrategy, which given the amount, I mean before the new, the newest product, the 10% perpetual, I don't really see a disproportionate amount of leverage. The actual leverage in the crypto market right now, particularly in Bitcoin is really low compared to normally. And so, you know, we've gone through just understand where, when you get to the point where we start hitting the resistance levels that people talk about 92, you know, 95, whatever, and leverage is this low and yet it's grinding higher. If we start seeing that grinding higher period without leverage, that's increasing. That is much more sustainable. But yes, if you start seeing leverage getting to significant amounts and people paying for perpetual swap exposures, et cetera, et cetera, yeah, that generally is more significant of a top. But we're not seeing that right now. And yes, you could project out in the future if in fact, let's just say the sake of argument strategy buys half of doubles their size of bitcoin at these levels using significant leverage. Yeah, that has all the hallmarks of this, of the trader who was right and bought bitcoin every step of the way around the rally, but kept levering up and levering up and got liquidated in this last drawdown. And that does happen, right? You know, there are people who did that. As long as they don't do it that way, it's okay. We're all worried that that's what they might do because all the, all the people on the stage understand that just because you've made a lot of money doesn't mean that you should be, you know, still running 10x leverage, as you know, at all points, because it means a 10 drawdown and you're, and you're gone. And so you don't want to be worried about that. But yes, it is right to keep your eye on it. I just don't think we're at a tremendously concerning level yet. But the, it looks like the seeds might be being sown, if I'm listening to Simon correctly.
- [34:39]
Tommy
Yeah, it's more a long term thing. It would take five to six years for probably that whole cycle to manifest. But just keep an eye on it. Yeah, that's what I'm saying.
- [34:51]
Scott
What about the rest of the market? I think we've kind of talked through bitcoin obviously and I know we have another conversation in a bit with orderly but Ethereum finally back over $2,000 kind of with a bit of strength, obviously was dancing around that number for a little while, was pushing 2100 today. If you look at the Ethereum Bitcoin chart at probably the longest term possible support that you could have back from 2020, is it finally time that if bitcoin shows some strength here and continues to move, that we could See some real movement in the altcoin sector. Joe, what are you guys seeing on Lunar Crush? I mean, that gives you any sort of indication as to which way alts may go if we see some strength here or weakness, for that matter.
- [35:38]
Simon
I mean, everything's bouncing. Everything that matters is bouncing right now with the market. But, you know, every, like a lot of stuff is still down, you know, 60, you know, 30, 40, 50, 60, 70%. Meme coins down more. So it's not anything I would say to get. Get super excited about. But, you know, what I've kind of been seeing is a lot of people have been deploying cash in the last two weeks. A lot of whales, a lot of people that kind of know the market and have been around for a long time. We're kind of calling Bitcoin 81 as like a great place that we might not see again. And I think that that has kind of flushed. Everyone's kind of said, okay, I also have a couple of my different alts that I love that I'm also going to take a portion of that and deploy into is kind of what that we've been seeing sentiment hit a bottom around the 16th of March, and so we've actually seen a turnaround there. Kind of funny, our internal numbers are showing the same thing at Lunar Crush with users and page views and sessions and everything. And so I think people are starting to kind of turn their head around a little bit. Scott, we were on here a couple weeks back, and I think we potentially thought we were calling a bottom there, and I think we might have just been like a week or two early, but I do think that I would say eight to 10 days ago was kind of the bottom of at least this quarter. And I think it's going to be a nice rally into May, and then maybe you think about slashing something there, but we'll see.
- [37:13]
Scott
Yeah, it's interesting that anecdotally your metrics align with what the market does, because I think you can look at even this show or any YouTuber or engagement on Twitter, and it follows the market exactly. You just like you're not going to get views when people are bearish, not paying attention unless it's a major crash day and they start to ramp up as price rises. It's really an incredible study in human psychology. I want to ask Robbie, since we've got you here and I always leave you out in the bitcoin conversation, but you kind of generally give me the update on what you're seeing, I can say that during this sort of sustained period here on my side, I just, my telegram was dead. Not many things being pitched around. Not seeing a lot of projects trying to launch. I mean, on your end, are you guys seeing, have you seen any, you know, sustained pitches? Are there new things coming to market that you're excited about right now or do you think people are still waiting for sort of market conditions to improve?
- [38:14]
J
I, I think it's kind of, you know, there's, there's a lot of both, honestly. I was in, in Warsaw last week at, during the Polish blockchain week and the community there is really like, as you, I don't know if people know, but Poland has been a center of software development and particularly great for the gaming industry as well for a very long time. And so there's a big Web three community and a lot of builders there. And I have to say the atmosphere was just, you know, people are very, very bullish. And I think that's also because it's more a community of builders than it is a community of investors, per se. So everybody's really focused on building product because they believe Web3 is doing transformational things for them. So I think that as a sort of market signal of how the ecosystem is going, I thought was great. I think in terms of the macro stuff, obviously I actually view the price movements in crypto generally recently to, to be a lot more reflection of what's going on in the macroeconomic environment and political uncertainty and these kind of things more so than something that's crypto specific. But I do think, speaking of floors earlier, that I think we are, you know, pretty much seeing the floor of things because our, our house view I think is aligned with, with most people that the second half of the year will be quite strong. And so I think we're just sort of starting to get into spring and a little bit of sunshine now.
- [39:46]
Scott
I mean, it's just good to have a conversation that there are people who are not obsessing over the price and are actually just building things. So I assume that you're still viewing very positively what's actually being built in this.
- [39:57]
J
Absolutely. And plus there's always, you know, the little bright spots because there were rumors circulating on Twitter about, you know, about the CFTC and, and, and policymakers looking at, you know, declaring NFTs and non fungible tokens as another defined class or category of digital asset. And I think that would be fantastic.
- [40:22]
Scott
I didn't actually see that. How do you think that that would be positioned? Collectibles like meme coins yes, correct.
- [40:30]
J
So I think as long as we're talking about NFTs as being collectibles or strictly commodities and ruling them out, out of that, you know, God awful catch all bucket of. Is it a security then that really unlocks the NFT and the content community to just go back to launching more token collections and launching more content without the fear of, you know, regulatory reprisal?
- [40:55]
Scott
And is there anything specifically on your radar that you think might launch or happen short term that could be sort of a catalyst for more excitement around altcoins and what's being built in the shorter term, three to six months?
- [41:09]
J
I think there's going to be, obviously there's new collections of new products coming out. So there, there's a handful of big game titles that are prepared to launch, but I think it will also, frankly just inject a lot of life into existing collections. I mean, we've seen the relative bulletproof nature of some of the blue chip collections, I mean, most notably cryptopunks. But, but you know, lots of things in the traditional NFT, you know, 20, 21, 22 vintage are down significantly, but in the grand scheme of things they're still a solid asset class and more and more, you know, community features and functionality and activity gets built around them. I mean, look at the apecoin ecosystem now, for Christ's sake.
- [41:54]
Scott
Yeah, absolutely. Robbie, thanks so much as always for your perspective since 11 o'clock here, we're gonna move on to a conversation here with Ran from Orderly. Looking at the document here, but probably better for you to give me the tldr Ran, assuming that you, you can hear me. Everything good on your end? We always like to make sure there's no glitch. Rand, you able to speak?
- [42:17]
Ran
Yeah, perfect. All good on my side.
- [42:20]
Scott
Yeah. So maybe you can give us the tldr obviously on what Orderly does as we dig in.
- [42:28]
Ran
All right, thank you. Great to be here. Okay, so for Orderly, we set out on the mission to allow anyone to trade anything from anywhere. That's our overall mission. We think that like other defi builders, the future of finance should be on chain in terms of the infrastructure and I think it should be omnichain so that users can deposit and withdraw native assets from any chain and they can swap, they can use the assets to trade perps where the chains are abstracted away and it will be really good liquidity and you can trade anything right from crypto assets to traffi assets eventually. And that's kind of what we set out to do. So what we Built is an order book that unifies liquidity across different blockchains. We're live on 12 different blockchains including a lot of the major EVM L1 L2s and on Solana. So a user can actually deposit from Arbitrum and withdrawal from Solana. We have our own chain built using OP Stack, but that just settles everything between the chains. And we rely on our partners which are what we call builders or brokers on top of Orderly that handles the user acquisition. They're essentially like front end, whereas on our side we're responsible for liquidity and assets listings. So some numbers. Currently we have over 110 perpetuals markets listed on Orderly accumulative trading volumes since end of 2023. So about 15 months is about 101 billion up to date. And generated about 10 million ish of fees which we give significant portion to our token holders. And the builders on top of us, They've generated about 13 million in in revenues on top of Orderly. So that's kind of what it is in a nutshell. And some of our partners, the builders on top include Raydium, which is the largest ammo on Solana. Their purpose is powered by us as in they act as a de facto front end and all the trades go through Orderly. We have wufi, which is an Omnichain Dex. We also have Quick Swap which is the largest AMM on Polygon. And we have 30 plus other builders built on top of Orderly.
- [45:17]
Scott
Yeah, in my mind as I listen to you, one of the biggest problems I think crypto's had in general is ux, UI and bridging and being way too confusing for the average person. So if, if someone's using Orderly to trade, as you said, they can deposit an arbitrum withdrawal on Solana. Is that, does that require any particular crypto knowledge for them to do that beyond obviously how to do a deposit and withdrawal generally, or is it basically all completely built in? Do they have to bridge themselves, anything like that?
- [45:50]
Ran
No, so the user doesn't have to bridge themselves. We actually act as a bridge so people can use us as a bridge. Kind of like how you can use a centralized exchange as a bridge. You just deposit. That's the only time you're going to see, you're going to need to see the address and then trade as you would. And if you want to withdraw, there's a small withdrawal fee depending on which chain and it just withdraws. And that's the other time that you would need to have. Well, you don't need Your address in that case, because it's tied into the same EVM address, but it's all abstracted away for the user.
- [46:29]
Scott
Right. So that's incredible. You mentioned Omnichain liquidity layer. Can you tell us what that actually means? It's believe it or not, one of the first times I think I've heard that term.
- [46:40]
Ran
Right. So we think, you know, liquidity is too scattered across different L1s, L2s, EVM, non EVM.
- [46:46]
Simon
Right.
- [46:46]
Ran
We aim to unify all this liquidity, starting off with perps. So what that means is we have a vault which is just a smart contract on every single chain we're deployed on. And this is where users deposit and withdraw assets. So it's simple, smart contract. And then the vault sends cross chain messages via layer zero. We're utilizing their infra to our chain that acts as like the ledger for all the trading for the account balances. And our chain is built using OP stack and so the cross chain messages for deposit withdrawals go through. Once deposited, the users can just trade. I mean the sequencing is done currently in a centralized way, but it settles on our chain post trade per block. So you can scan our chain at any point in time via the explorer to kind of see which trades are made by which addresses. And so all of that is open and transparent. So that's how we do it. So the market makers are quoting on one order book and the traders are flowing in from any of 34 different builders that build on top order, like Raydium, Wu Fi, Quick Swap. All of these guys have users sending in trades and they're crossing together alongside the market makers. So it's shared liquidity between all these brokers and all these chains.
- [48:15]
Scott
Okay, so, so that said, how do you assess what chains to include next? When you have so many things launching in this market, how do you determine what's worth incorporating and making a part of what orderly?
- [48:31]
Ran
Right. So I think we like we're a bit, so it's a number of things, right. It's kind of we care about users and volumes. Right. Like recently we launched on Sonic, that's had had pretty good results. We're going to be launch partners on Monad and a few others. So it's one, it's kind of what everyone's looking at. We've launched on Barrett recently and the user base and two, so some of the chains they'll give us some incentives that then we pass on to users via like trading competitions or campaigns that can help us with user acquisition in general. And we help the builders on top. And now it doesn't take us a long time to deploy on a chain because for us it's not a whole build on the chain. It's a smart contract vault like the deposit and withdrawal contract. And it only takes a few days for us to enable a chain. So then kind of the cost of being wrong is small. So then we try to deploy on quite a number of chains and they're always kind of pitching us as well. And eventually we want to make this a bit more decentralized. We're already voting on things like listings and for the community vote on new chains and those chains can incentivize the community. You know, for us to do that.
- [50:06]
Scott
What would you view as your metrics for whether this is successful? You know, at what point is it a certain amount of aum, a certain amount of liquidity, a certain amount of change? Like how you know that you've reached a state where you view yourself as.
- [50:25]
Ran
Well. All our numbers on, on our public dune. So we're looking at trading volumes, obviously users across all the brokers. So daily active users now is roughly like a thousand ish depending on the day. We're looking at TVL obviously. I mean now kind of there's a limited number of things you can. I mean you're just trading perps on orderly. We're coming out with more interesting like vaults very soon, next month and multicolateral. So that'll unlock different strategies like kind of delta neutral or funding rate ARB type of strategies. When people can deposit native east, native Seoul, which really makes the Omnichain experience stand out. Right. When you can deposit native assets from all these different chains. But mainly it's just volumes and users for us.
- [51:26]
Scott
Yeah, that makes sense. Obviously there's a token association which is associated, which is order. So can you explain the tokenomics, how it benefits the stakeholders and the development, how people use it? What's the utility?
- [51:40]
Ran
Yes. So the biggest thing that you can do to with order is on our staking page. If you stake it, you get. You're getting 60% of the protocol's net revenues per day. So when I Talked about that 10 million that the protocol received, 60% goes to token holders. Now there's almost 90 million order tokens staked and the current APR is about 11%. And this is paid out in stables because the stables are what we get as trading fees. Right now you can only deposit native USDC as collateral. And that's going to change once we enable multicolateral but that's the fees and people can get that and it accrues on a daily basis and you can withdraw whenever you want. So we want direct value capture to token holders. Currently this is, this is the main way. And if you're staking order, you actually get boosters in terms of like trading volumes, trading volume boosters. Because the other thing is if you're trading on orderly via any of the brokers, you're getting some token incentives in the form of vested order or yes order that unlocks over 90 days, but it's like a linear, linear unlock. So you're getting rewards automatically for trading for both takers and also market makers. We have some of the best market makers in the world that are quoting for orderly. And that's kind of where liquidity comes from. Like the wintermutes, the cellinis of the world. These are two that are public, but we have 30 plus market makers. So then the maker and taker side are both incentivized by order tokens in the form of vested order tokens. And the more order they have staked, there's boosters on top of this. Right, that's the mechanics. And we aim to even increase that 60% to higher. Eventually I think all value capture should be going to contributors and token holders.
- [53:58]
Scott
That's quite a statement. So I guess as we sort of come to the end here, what's next for you guys? Do you have any exciting features, partnerships, anything products that you can share with us specifically? And then I just want your kind of final general thoughts on the future of DeFi. Obviously you're very deep in this. You're a technologist, you're building things. What will DEFI look like in the coming years and where will orderly sort of fall into that? So first you know anything you have specifically coming and then you know how you see DEFI shaping.
- [54:29]
Ran
Yep, we have plenty of partnerships coming up. I mean, I won't get into the details, we have some every week. But in terms of major products, we have two pretty exciting things. One are vaults where that allows any of our top traders to spin up vault and to have a strategy that can trade. But everything's on chain, right. And it'll be transparent and visible and users can deposit their capital on chain to get a yield from some of these traders, kind of democratizing access to really good trading strategies. Right. And there will be like a rev share and that'll be vault dependent, what that looks like. And people can deposit again and withdraw from any number of chains, not just one chain. For the vault. We expect that to increase our TVL and our liquidity and thus volumes with the vault. That's pretty exciting. I think that's coming up very soon and we'll have an additional twist that hasn't been done, but I won't reveal that now to the vault. And then there's also multicollateral which I talked about earlier. I think that's really exciting because you can deposit eth, native sol and native monad other assets just like you would on centralized exchange. Not the wrapped version but the native version. Because we're live on all these different chains and it's all connected together. Right. I think that'll be exciting. It's to again abstract away the chains make it feel more like a centralized exchange where the piping but it's all on chain and that's where I think defi is going. I think all of finance should be on chain. Settlements, ledger assets, it's the most natural way to house these functions. Obviously trading for finance, starting with crypto. You already see a lot of that with with spot assets like meme coins and now more with perps and with yields and what that would entail. And eventually with. I mean there's a lot of rwas being tokenized on chain and so that's coming in and I think all these assets will be on chain. But you know, there's kind of issues around the ux, around the onboarding. Like some of the issues that you just described, like is it easy enough to use which I think will be solved by just better ux, easier onboarding and that's already happening. And centralized players would likely to be more or less front end to handle the onboarding. KYC fiat on Rails to Defi and all the typing is on chain. But users won't know. Right. And they don't care. So I think that's kind of what's going to happen. And it's quite ideal for all the users. Right. Because they can get access to the best liquidity the newest assets as soon as it lists lists all types of yields and the chains are abstracted and they feel like they're using like a Web2 app.
- [57:37]
Scott
I think it really is the most important thing. Go ahead.
- [57:40]
Ran
Oh yeah. And best of all, they should be able to get value capture via the token which is something that centralized entities cannot fully do.
- [57:50]
Alex
Right.
- [57:50]
Ran
Due to their high cost, high headcount and just not using a lot of the on chain info.
- [57:58]
Scott
Yeah. To me this is the single most important thing that we need to solve and We've been saying it for years, so it's great to see that you're solving it because I think abstracting away all of that complexity is the only way that this becomes mainstream. And playing with it, it seems like you guys have actually accomplished that. So congratulations and love to have you back in the future as you kind of move forward and update to everybody else in the audience. You should give Ranch a follow here and obviously we have orderly network on stage. You can see that purple, the purple background with the white o there. Give them a follow as well and check out everything they're building. Rand. And thank you very much. Any. Anything I might have missed. Just a really final thought before we jump.
- [58:39]
Ran
No. Thank you for having me. And please feel free to try out any of the, like, you know, radium perps. Bui perps. Try out one of the brokers on top and give us some feedback. We'd love to hear. Thank you.
- [58:49]
J
Awesome.
- [58:50]
Scott
We'll definitely do that. Everybody check that out. Give all of our amazing panelists from earlier a follow. We still got Dave, Dwayne, and Sasha here. Otherwise we'll be back tomorrow 10:15am Eastern Standard Time for Crypto Town hall. Thanks, everyone.