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- [00:01]
A
Bitcoin's ready to rocket to $126,000 and there's nothing you can do about it. It is a foregone conclusion. Not my words, but those of Today's amazing guest one, Mr. Arthur Hayes. We're going to dive into that and all the ridiculousness in crypto right now. Let's go.
- [00:19]
B
Let's.
- [00:34]
A
What is up, everybody? Happy Wednesday. Good morning to all of you. I hope that you're having as amazing of a Wednesday morning as I am. I'm kid, I haven't done anything today. Literally have done done nothing. But I am in the snow. I wanted to make Arthur feel comfortable. Arthur likes to ski. But I guess I'm off season now because you were in Miami last week.
- [00:53]
B
Yeah. You know so much in the snow, then you gotta change it up.
- [00:57]
A
Yeah, I mean, dude, I don't think anybody's having more fun than you. I'm gonna be honest. Honestly, it makes me a little bit uncomfortable. Like, do you ever do anything you don't want to do? Ever?
- [01:07]
B
Fuck that shit. No, I love it.
- [01:11]
A
Well, listen, so I guess we could start with your most recent writing, My favorite, the Butterfly Touch. I mean, first of all, this image, like I don't even know what it means, but it's provocative. Honey is sweet, life is beautiful, and Pepe is max as fuck. And then your first line, the seductive sensation of expectation permeates my body as the incipient bull market generally caresses my soul. So you think the bull market's coming? I guess, huh?
- [01:36]
B
It's here, it's starting, we're building, we're getting there. And I feel like it's time.
- [01:43]
A
Okay, so listen, you always love to throw out a big number. I'm gonna be honest. I said this to you before, now we're saying 126k and people are like, can't believe we would possibly be talking about an all time high. We used to like throw out a million. We used to be like a casual 500k. Now 126k makes waves. Isn't that just a signal of how beat down and depressed people are for no good reason?
- [02:05]
B
Yeah, I mean, at the end of the day when it gets to 126 and I'm sure you and other people ask me, what's your new price target? And I'll throw some ridiculous number because that's what you think. Like, it doesn't cost you anything.
- [02:16]
A
It gets above 1.69, it could go straight to 127. That's what my charge.
- [02:21]
B
It could go straight down to dollar, you know, you never know.
- [02:24]
A
But seriously. So like in your mind, what's, what's the case for, for bullishness at this particular moment? We're kind of sitting in this area where you know, we're well off the lows, right? I think the bottom, I thought the bottom was in from the minute that bottom was in. Personally you obviously agree. I mean, what's the case for us to keep heading up here?
- [02:43]
B
As usual, it always comes down to money printing, credit creation. And I think, and I wrote about this in my most recent essay, the US Iran war has been a catalytic effect to push these themes. On one hand you have sort of the AI buildup and this race between the United States and China to host the most amount of machine intelligence within their squiggly line borders. And that requires a ton of capex. What's the 2026 number? Something like 700 billion is the expected spend by the hyperscalers. And the economics and the economic game theory that goes along with this means that they're going to continue to spend more and more money until there is an outside exogenous event from the market that forces them to stop. But even if they spend down all of their cash flows, both in the US and both in China, the word from on high is we need to be number one in tech and number one in tech means AI. And that means the banks and the commercial banks of the central bank need to provide the credit. If Google runs out of free cash flow to build a trillion dollars of capex and we're still in this sort of AI meta, then JP Morgan needs to step up to the plate and lend them the money and they will. Because at the end of the day you have sort of the government saying AI is the most important thing to us. It's a national security effort, it's an economic effort. It's this competition between the two largest economic and military superpowers on AI. And both leaders, Trump and Xi, have bought into this. Whether you believe it's a misallocation of capital or not, doesn't matter. From on high, AI is the thing. So banks will fall in line to do the lending and we're starting to see this. If you look at construction and industrial loans in the banking sector, it's up and to the right starting in middle of last year. And the Fed is obviously increasing its balance sheet using the reserve management purchases situation, the People's bank of China and they're also increasing their balance sheet and the Chinese ten year bond is yielding something like one and a half percent. So they've got a lot of room to borrow money to build the stuff that's going to power AI so we have that sort of credit creation on the technology side. And then when you talk about the war, every other country in the world is now recognizing that the United States and their explicit and implicit promises of free navigation, of, you know, going to fight wars to make sure that the good guys get their stuff on time. That's out of the window. The Straits still pretty much closed for most traffic. And you know, certain nations are suffering and they're sitting there like, okay, why did I own all these treasury bonds and all this big tech US Equity? I should have built another pipeline. If I'm the uae, why, why am I, this is not like a, not a known issue that there's this Persian Gulf place and there's this choke point. Like we've been talking about this for longer than I've been alive and yet it's all of a sudden it's a surprise that the UAE now, now cannot ship any of their shit out of the Persian Gulf because these didn't want to build a pipeline yet.
- [05:44]
A
It's also barely. Europe can't get gas closes like Europe, Europe's like, what, what? Come on, it's like you're an entire continent. You didn't think about this?
- [05:55]
B
Yeah, but yeah, let's just spy some more treasury bonds, right? So I think that's, that's ended. So whatever happens in this, in this conflict and however it resolves, at the end of the day, everybody who has been caught offsides is going to realize that winning all these dollar paper assets does not protect you in the time of war. And so you need to move from just in time to just in case. That's highly inflationary and it puts a dampener on U S financial markets, which Bestin and Warsh are gonna have to fill that plug, plug that hole with printed money. And we're already, already starting to see that with sort of swap lines and discussions about who should get swap lines. If they do what the US Says or Besant railing against the Japanese Ministry of Finance and basically telling them what to do to make sure that they're not dumping treasuries in the market. Hey, why don't you use a swap line or other means to raise the dollars to buy the commodities to rebuild your infrastructure that you should have been building for the last 50 years? That's what's going to happen. And so I think these two things are very Inflationary, it's dollar credit creations, yuan credit creation, and that's what's going to power crypto.
- [07:04]
A
Yeah, I find it really interesting. Jordy Visser said something similar to me a couple months ago, but he was like, they're printing money, it's just not the government right now. And he said the same thing about AI CapEx. I mean, these companies need to raise so much capital that money has to come from somewhere. And I don't think people have just realized the shift that you just laid out so eloquently is that like the money, whether, whether it comes in Fed policy or rate cuts or bond buybacks or whatever, like the money's coming for AI and that's all going to find its way through the system event, essentially.
- [07:33]
B
Exactly. And I think obviously we've been trained to look at central bank balance sheets from the start of US QE in 2008, obviously in Japan, QE till the present, and DE emphasize the role of the commercial banking sector in the creation of credit because credit can be created either the central bank level or the commercial bank level. And usually when you create credit at the commercial bank level, the money multiplier is much higher because they're lending to real businesses or building stuff. And then that person who gets a salary is going to get credit. And there's a whole money multiplier effect. Which is why if you want to juice an economy, bank lending does way more than central bank lending.
- [08:10]
A
I mean, we're at that. We have the Lyn Alden. Nothing stops this train fiscal dominance theory. But we are getting this guy. I made a meme for him. That's Kevin Warsh. He's a top puppet. I put that on Yahoo Finance. Yeah. But I think we all know that no matter what War says, that he's gonna do what Trump says. Right. I don't buy the like past hawkishness. Eventually we're gonna get rate cuts. But do you think that even matters? I mean, right now I think prediction markets have rate hikes at 40% or something.
- [08:41]
B
Who cares? I mean, I think this. And then you can argue with me in this. I've been very clear. I believe that the quantity of money is more important than the price. And you know, the most important episode that recently that we can exhibit this phenomenon is during, you know, 2022, 2023, when, you know, we bottomed in that last cycle, if you want to call it that, and you had fed funds at five and a half. And the engineering of reducing the reverse repo program from two and A half trillion down to zero, essentially. Powered stonks, powered crypto, powered real estate. Right. And Fed funds is at five and a half, super restrictive supposedly. Right. Why would you think that, you know, financial markets can rally when you have fed funds at one of the highest levels that it's been in, you know, 20, 30 years. So again, it's the quantity of money, not the price. As long as people can get that cash, it's flowing through the system, then assets like Bitcoin are going to perform very, very well. So I don't care if the Fed funds rate goes up or down. And I sort of think that's a, that's a red herring. Obviously the market focused on Kevin Warner saying I want to reduce the Fed balance sheet. Fine, okay. And there's very valid reasons why he wants to do that. You know, Buffalo Bill Besson has written some very eloquent op EDS in the Wall Street Journal. The gain of function of the Fed, all this. The Fed is the engine of inequality. Absolutely true. But they're talking out of two sides of their mouth. Because on the one hand, while the Fed is talking about, yes, I want to reduce my balance sheet, Governor Stephen Moran just wrote a very important piece. I think everyone should read it. It's a user's guide to how to reduce the Fed's balance sheet. And he put out something like 10 or 12 different policy measures that the Fed and the treasury could adopt that would reduce the demand for reserves, which would reduce the asset side of the balance sheet as well. And the takeaway is that all of these measures are essentially regulatory changes that nudge banks to buy more Treasuries that the Fed is then selling. And so it's a net wash. It's not as if the Fed is going out and saying, hey, I've got $4 trillion of treasury bonds, I want to reduce my balance sheet by 2 trillion. I'm going to go open the open market and sell these bonds. That is not anyone. No one is saying, Fed, go sell some bonds in the open market. No, let's do some regulatory fugazi with the banks. And so the Fed reduces their treasury holdings and the banks increase it in the same amount. The net effect is zero. So all this hawkish is nonsense. Yes, technically speaking, he will reduce the balance sheet. It'll have no effect on dollar credit.
- [11:08]
A
Yeah, you came with Buffalo Bill Bessant. I'm workshopping Daddy Warbucks. Worst. Amazing man. We just make things happen on the fly now. You know, it's, it's perfect. But I, I 100 agree with everything you said. I actually thought when we saw the UAE leaving OPEC news and then you looked under the hood and it was all about swap lines and basically protecting the dollar. You could see all this. It's just, you can see exactly what Buffalo Bill Besant, as you said, is trying to do here. I wonder how much stable coins will play into that.
- [11:49]
B
I don't know, I mean maybe you could tell me, I don't know how much, let's call it from this inauguration of Trump till today. How much is total stable coin in circulation gone up? I don't think it's that much.
- [11:59]
A
I don't think it's that probably like 30, 30, 25, 30. I mean people talk about trillions, you
- [12:04]
B
know, I mean I, I talked about it earlier, it said 10 trillion.
- [12:08]
A
It will, I mean, I think it will. But like, I just wonder if that's going to be like you know, some smathering of private coins all over every single bank for their own stablecoin and their own cross border, you know, usage and whether it goes around. But tether is, you know, a top 10, I think now holder of US treasuries, I think writ large. Stablecoins are like seven or eight. You know, if you gather them all together and compare them to a country that's got to be a part of at least Besson's thinking or you know, or the United States thinking for hyper dollarization. I mean you see like this news like Brazil is like blocking stablecoins for cross border transactions now because nobody's using their currency anymore. You can just use dollars. Right. I mean it's going to be a problem.
- [12:51]
B
And I said this in my piece about stablecoins. If you are an emerging economy, this is a direct assault on your financial sovereignty. And so the only thing you can do is do what China did, ban all US tech. Like you cannot have your people having a Facebook, a WhatsApp, an X and all these different accounts or you severely restrict their ability to integrate any of the, any of the sending functions of currency on these platforms. Because it absolutely is a way to completely disintermediate your ability to control your money supply and force. Well, the user convenience factor, having a dollar for your plebs to go and use dollars instead of reals or rupiah or whatever currency. Right. So absolutely, if you, if that's your end goal, that's what you should be doing.
- [13:36]
A
Yeah. Is there anything unique to crypto, market clarity act, institutional adoption, any of these things that you think Play into the thesis of higher prices right now, or is it really all about macro in your mind?
- [13:49]
B
I think it's always, always been about macro. I went on stage in consensus in Miami and I said, we don't need no regulations, right? Who cares? Clarity Act. I hope Trump vetoes it if it ever gets to his desk. Don't need any of these regulations. If Bitcoin and crypto needed regulations to survive, we wouldn't be worth a dime. Because what's the point if you're just going to have another fugazi derivative that sits on some member of the financial system's balance sheet? We got that, we don't need that. What's the point? And I think people miss this distinction. The reason why banks want to offer this product to their clients is because the product does something for its client. It's a non correlated asset that's done very, very well in inflationary environments, environments when lots of fiat has been created. Obviously their clients want to have some of that. And the bank is in the business of making fees and providing the product that their clients want. So sure, they want to onboard crypto and they should be allowed to do that. But other than that, why are we bending over backwards to try to institutionalize Bitcoin? You're essentially just saying what you've actually built for the last 15 years is a zero and we just want to have another piece of shit financial product that's going to go to zero when some small shitty bank goes under.
- [15:02]
A
Yeah, I'm kind of feeling that way. And I've been saying for a while, ever since Coinbase killed the Clarity Act, I was like, how the fuck does Brian Armstrong have anything to do with killing the Clarity Act? Are we really saying the quiet parts out loud about the lobby using the money now? Because last I checked, he's not a senator. And then I started digging more deeply into it. I had a conversation with Chris Giancarlo, who used to be the head of cftc. And he actually said to me, flat out, he was like, the genius act. He's like, it's not great, you know, and everybody was cheering the genius act. He's like, now you have, you have Circle. And he's like, you have private companies and the government can see your transactions. It's like the worse than the cbdc. And he's like, in the Clarity act is so that the banks can do what they want in the industry, not so that crypto has rules. He's like, banks can't do all the things that Coinbase can right now and they want to like. And that's what the Clarity act is really about. It's just really interesting and it echoes your point. I mean, coinbase has what, 120,130 million funded accounts stable coins are $300 billion. Crypto doesn't need the Clarity act is more likely to just allow banks to co opt it. Unfortunately, I mean the news yesterday, there was a hundred amendments yesterday added to the Clarity act for markup yesterday. A hundred. Like tell me this thing has any chance of passing.
- [16:16]
B
I mean, I hope it doesn't pass, but again, and I hats off to Brian Armstrong. He is a CEO of a publicly listed centralized crypto company and he's doing everything in his power to make his shareholders money and he should be that. And that that does not mean that he has the best interest of the broader crypto ecosystem at heart. You have to understand what his role is and what he's trying to do. That's what he's, that's what he's, that's his job. Right. So why do you think that he would ever have the interest of the average bitcoiner or the average open source developer in his mind? If they converge, great, but if they don't, then sure he's going to go his own way.
- [16:52]
A
I'm curious your your opinion on strc. So obviously I have this theory kind of working theory that you know, we see these little pops, we're going to see these little pops in bitcoin. Not huge moves, but every time you see that STRC is about to trade above par and go above 100, like you can literally front run Michael Saylor transparently buying a couple billion dollars in two or three days. Why wouldn't you want that trade? You know, like you literally just go 100 bucks. I have the little tracker, you know, like I watch the tracker now. It's fun right here this week. Yeah, see he bought two about, should have bought about 2,000bitcoin just yesterday when it came above par. I want to front run that.
- [17:32]
B
I haven't really delved deep into the corporate finance mechanics of strc. I'm sure that, you know Michael Saylor is a genius at corporate finance, right? And so that's why he's been able to do what he's done. I think he's in a unique position in terms of microstrategy's ability to pull off these products, these derivatives. No one else is going to be able to do that. No one else has the balance sheet. No one else has A connectivity to sort of the sell side. Like this is only, only him and his company can do that. And they'll succeed or fail, depending on that. So I mean, I don't think MicroStrategy is going out of business anytime soon. Obviously, from what I understand, he doesn't have to pay dividend in STRCs. You're sort of trusting that he's going to trust me, bro, you know what happens when you trust in crypto? It doesn't end up very well. Not that sailors do anything bad. He's going to do what's in the best interest of his shareholders. Again. Right? People need to understand what these people are there to do. Right? He's a CEO of a, or board member, whatever. MicroStrategy, that's his baby, right? He's there to protect micro strategy. He's not there to protect your bitcoin bags. I mean, that's the line sometimes.
- [18:35]
A
I mean, I talked to him Wednesday morning just by total coincidence. Like I had the first interview lined up with him right after he said he'd sell some bitcoin. I was like, oh, this is going to be fire. And he didn't say it explicitly, but yeah, his shareholders and anyone who's buying STRC and the SEC need to hear that Bitcoin is not an impaired asset when it comes to protecting dividends and STRC shareholders. He has to say, I would sell some of this if retail starts to get wrecked or else straight to jail. Have fun. So I, I mean I, I respect it. He's just kind of evolving. But to your point, all these guys, I mean they, you, you can't just say shit when you're the CEO of a publicly traded company. Like, you have to actually, like, you know, Brian Armstrong can't just go out there and say wild stuff. He has to actually protect his shareholders. Like as you said. What about altcoins? Man, this story is blowing my mind. I asked you about before, I know you don't care about this particularly coin, but DTCC builds out blockchain based collateral system with chainlink integration. First of all, like, I don't know what that means, I'll be honest. But like, and then I just look at the chainlink chart and it's like not even up. I'm like, how can you have the DTCC, which settles $4.7 quadrillion a year in volume, like make an announcement about your Altcoin and it doesn't move at all? I mean, how bad is it out there? Because that would four years ago, if you saw anything like that, you'd be up like 700x in five minutes.
- [20:03]
B
Yeah, because again I've been in this game since 2013. I remember when we used to look in splooge in our pants because somebody had a PayPal announcement or well oh my God, did you see that? Like thatcoin got a Bloomberg article written about them like up 500. Right. Like we were so hungry for any sort of like non crypto validation. And over time we've seen that none of these deals mean anything.
- [20:25]
A
Right.
- [20:25]
B
If you don't provide any value for your retail people who use this product or service then we've seen time and time again that none of these partnerships amount to anything most of the time. Right. And so yeah, maybe that is some deep value. Is there unchained link because they're actually going to do something with dtcc but history tells me that there's some press release. Maybe it's like a proof of concept. Maybe it's like some small team within DTCC is going to do a pilot with chainlink and the actual on chain fees or on chain activity from this is going to be de minimis. But okay, maybe in 10 years it will be Mac really really big. But again we've seen this arc so many times and time after time it's boiled down to pretty much nothing.
- [21:10]
A
Yeah And I think the other thing is you get the huge announcement and the company or the protocol or whatever, they're doing something but none of that value necessarily accrues to the token anyways. So even if it is the biggest deal in the world, how does that move the token? And I think that's been the biggest problem in crypto for ages. Maybe the more interesting question is what tokens exist where you can actually handicap what the value accrual of a big announcement or of fees will be and should we be holding those? What are you interested in Hyper liquid?
- [21:41]
B
I mean the hyper liquid tokenomics do exactly what they should do. And now obviously the perp exchange business is not the first people to do this. Dydx gmx. So many people have done on chain perps but the tokenomics were fugazi in most respects. Lots of VC bags, interesting emission schedules, whatever. Right. But we deal with hyper liquid and we've seen on chain 97 of revenue buyback, hype and burden. And that is why I'm a bag holder of hype And I think that other bag holders are very happy because we see a direct correlation to hyper liquid does lots of trading volume, they earn fees, the Fees come to me as the token holder and even today and obviously I advise a lot of projects and I say it's very, very simple guys. And I don't want to hear excuses about why you can't do it. No one gives a about your excuses of why you make money. And none of that money comes to me as a token holder. I don't care about what your lawyer said or what your advisor said or what your big ass VC said. If you make all this money and I don't see any of it, fuck your token go to zero. And finally we've gotten to that stance over after doing this for since like 2017 in terms of big ICOs that people aren't feeling anymore. If they're not seeing any money in their pocket from success of the protocol, then fuck it. I don't need to own this token. And I think that's a maturation of the space.
- [23:04]
A
Yeah. Not even picking on anybody. But it always. It's like the same debate that you can always have about like owning Ripple shares versus XRP as a token and these companies that have, you know, you can basically get, get the value out of a stock or you can buy the token that's being used to fund the value of the stock. Circle just, you know, they had their announcement on ark. They raised $222 million in a token presale from BlackRock, Apollo and literally everybody else. And I'm like Damn, our new KOLs are BlackRock and Apollo like doing pre sale token launches? Like what's their vesting? It's really wild. But I still don't like why would you own Ark Token necessarily versus owning Circle stock?
- [23:44]
B
Right. You can trade Circle stock right now. You can't trade ARC. I'm pretty sure that you know BlackRock's probably stuck in some you know, two year lockup, whatever deal that they sell. Yeah, they're gonna figure out exactly what it means. Term sheet deals in the telegram chat that you could do a layer of fake. I don't think so.
- [24:08]
A
You know what's interesting though is like you obviously I know that you're a hyper liquid bull and honestly I. I don't own it and I feel stup. It's just screaming that right now I might actually. But like 21 shares launches t t hype. I'm calling it T hype. It might be fit. I don't know how to pronounce. Second one tx x h on NASDAQ, the first US ETFs tracking hyper liquid. First of all, I think that Matt Hogan said it. But I think this is like the end of the single asset ETF era ends right here at Hyper Liquid. Like I don't know, I just think like, you know, now we're going to get indexes and stuff. I like, I think that the market has an appetite for this one. It did, you know, it did, I think modest inflows in the first day but like how many more of these can we get? But I, I think it actually matters that you have some sort of like level of institutional stamp of approval in the form of an etf, even if it's a smaller one. And this just might be another case for hypermill liquids at 1.8 million in day one volume ETFs.
- [25:11]
B
For a lot of people, obviously hype is special because it's a extinction level event for centralized exchanges. A well run decks with a lot of market mind share and a growing market share and permissionless trading and doing everything well and properly is an extinction level event for the centralized exchange because centralized exchanges make all their money from very good traders taking money from dumb retail traders. That's literally all it is. And that's the same in you know, traditional.
- [25:41]
A
Yeah.
- [25:41]
B
And so if you're saying hey retail trader, not only could you own this token and earn a percentage of profits right. Of the thing that you're funding, but you can trade the newest coin, you can trade 20x leverage oil on the weekend and all you got to do is connect your wall, you have to deal with some dumb exchange customer service representative and it's a much better trading experience. That is why, you know, a lot of exchanges don't let you trade hype spot or it's very difficult. Right. And so for a lot of people like oh I, I get the hyper liquid thing but like how do I buy it? Like I don't understand how I get the hyper liquid token. It's not on the largest sex that I'm familiar with and so I'm sort of out of the game. So I think some of the ETFs will bring a different type of person who understands the hype story. But for whatever reason just it was too hard for them to buy the token.
- [26:27]
A
Yeah, that makes perfect sense. So I mean I'm just thinking about this. You literally invented the perpetual swap. I mean is that fair to say? I don't know if you can hear me. Is it fair to say that you invented the per swap? Because they seem to be coming everywhere. Yeah, can you hear me? I was that, I said it's Interesting. We're talking about hyper liquid, but you. Basically, this is where we get. Where we have those. Oh, can you hear me? I'm a lost the ears. It's not the first time it's happening. Can you hear me now? Did your AirPods die? You can't hear me? What was that commercial? Can you hear me now? Sprint, Verizon Sprint. Can you hear me?
- [27:14]
B
Scott, you there?
- [27:15]
A
Yeah, I'm here, but you can't hear me, can you? Am I muted? You guys can hear me, right? Can you guys hear me out there in the world? I have to tell Arthur to sign off and sign on. One second. I'm going to do the crap. Yeah, I'm here. You can't see me. It's so weird. I go in the chat. You guys just hang on. Where you get back, Scott, Hello? Yeah, I'm putting you in the thing. Hey, guys, this is real TV right now. I'm gonna tell them to sign off and sign on and see what happens. We did it. I'm gonna go skiing while we wait for Arthur to try to come back. Looks nice out there. And I was really. That was my moment. I was gonna be like, you invented the perpetual swap, like, literally. And now we're talking about having prediction markets for perpetual swap. Let's see. Oh. Oh, yeah. See, we did it. We did technology. Okay, So I was having a big moment there where I was going to give you all the credit in the world. You created the perpetual swap, and here we are talking about hyper liquid. You literally invented it. What is it like to see that now we're having conversation about perpetual swaps coming to the stock market, literally to everything, and then you have prediction markets that are now adding perpetual swaps to the prediction markets.
- [28:43]
B
You invented this.
- [28:43]
A
I fucking love it.
- [28:44]
B
It's awesome. It's very validating for what myself and the team created back in 2016, that this financial product has become this ubiquitous. And at least, you know, obviously, you know, I've made a lot of money and, you know, being the father of perps and all that, but, like, on a. On an ego level, like, I hope that hyper liquid or whoever comes after them, you know, destroys the cme, the nyse, the urax, like all these exchanges and just says, like, we have a better product. We have better product market fit. We are able to allow 7 billion people to trade whatever the they want to trade and using leverage and go yourself. And I hope that, you know, the hyper liquid or someone like them continues on this journey. And I'm super proud of What Jeff and his team have built, I mean
- [29:28]
A
how do you then loop in prediction markets? Right. So you like, I would say perp swaps were like, that was the, like just the tip of degeneracy, you know, now he's got, you got like, you know, people with inside knowledge of shit that's going to happen tomorrow, potentially being able to bet on leverage on that event and nobody can stop them.
- [29:53]
B
I think it's great. I, as I've gone on record saying I think insider trading should be legalized. There should be nothing you should not be allowed to trade. Information will get, will should be free. And yeah, if you have inside information, I want to know about it. Why? Why? I think it's kept in the shadows. Why? You know, get. And then certain people can insider trade and certain people can't. So you get all this, you know, volatility in the price. It makes for a much better trading experience if all information at all times is presented in the market and then we as traders can make a decision on a trade. People who use these signals can inform their decision making around events. I think incentive trading is great.
- [30:30]
A
So. And I guess that if you believe that then prediction markets does it on steroids because you can basically probably. I mean, I guess if you're smart enough or you have an edge, you can see those insider trades in the market basically based on the odds and the spreads versus other platforms and basically get on sides with the insider trader. And is that the idea? Yeah.
- [30:51]
B
And I'm sure there's some sort of like signal to noise, you know, factor analysis that quants can do and I'm sure they're doing it right. Like Friday night, is Trump going to bomb Iran or not?
- [31:01]
A
Right.
- [31:01]
B
And people are looking at polymarket, the different markets, seeing if there's a trend that's developing, somebody placing some order on some esoteric market to sort of like make it make a bunch of money because they already know what he's going to decide to do. Right. These are sort of things that we want all this information in the market.
- [31:17]
A
Nancy Pelosi loves to hear that.
- [31:21]
B
Well, Nancy Pelosi wouldn't be such a good trader if everybody could insider trade. Let's put it, let's put it that way.
- [31:27]
A
Well, I guess that's the point is that nobody has an edge. If everybody has the edge. That makes a lot of sense. I mean, is hype literally the only thing that you're looking at in the market outside of Bitcoin? I mean, do you touch Ethereum? Ethereum, Solana Are there other altcoins in the market?
- [31:41]
B
I have an Ethereum bag. It's been there for a while. Ethereum will do what it does. I'm very bullish on decash the privacy narrative. I think that as the understanding of what AI can do with data sets from big tech and big government in terms of de anonymizing transactions and tracking fund flows, people are going to demand some privacy over the Internet with money. And that is, in my opinion, zcash. And which is why I think that it belongs in every crypto person's portfolio. Obviously, maybe you don't believe in zcash, maybe it's Monero or something else, but pick one. Right? And so I particularly believe that zcash is the one. And I have to say, looking at Maelstrom's portfolio, it's probably our second largest crypto asset outside of Bitcoin.
- [32:25]
A
Zcash caught fire like six months ago. Whatever, maybe a year. Everybody started talking about it at the same time. And now that privacy narrative is everywhere. I mean, this is bitwise. CIO Matt Hogan says privacy could become crypto's next killer app. I'm not sure how that aligns with Ark, Canton and Tempo.
- [32:41]
B
I know that's not privacy at all.
- [32:47]
A
It's privacy for Citadel to not have their order flow be public, but it's not privacy for you and me to send each other cash table at 11 that we didn't want people to know about because everybody. I was there. I was at the party.
- [33:05]
B
How was it? Was it fun? It was fun.
- [33:07]
A
Of course it was fun. It was a. I mean, you know, it was fun. Worst DJ I've ever heard in my entire life. Yeah, I'm over.
- [33:14]
B
I just. I'd rather go across the street to space.
- [33:16]
A
Yeah, space is better. You know, historically, and it's been there. It's the og. I mean, I can remember some winter music conferences, you know, being on the like outside deck at Space at noon. And I literally don't know if it's Wednesday or Monday. So yeah, good time. I can't do that anymore. You know, in. In the same way. But privacy really seemingly has emerged here. And what you're talking about is privacy in transactions between individuals, not privacy for institutions here.
- [33:45]
B
Correct.
- [33:47]
A
Yeah. And why not Monero? You know, why zcash? Why not Monero? Or is it just choose your.
- [33:51]
B
I mean, I've read some things about the cryptography behind Monero. So Monero is obviously rigging signatures and you're able. It's. I'm. I'm not a cryptographer, so I'm sure I'm butchering this a bit. It's a different way of essentially achieving privacy. And there some governments have been able to de anonymize. It's very difficult to do, but they have been able to do it. You can probably Google there's a Japanese criminal case about the government there was able to de anonymize some Monero transactions by a particular subject of investigation. Now zcash for some of the upgrades, there's no more trusted setup. I remember being super bullish about Zcash in 2016 when it was the hottest shitcoin around. Like privacy back then was such a thing. Right. Massive launch. Obviously the price was like $3,000 a coin and dropped 99% and all sorts of fun and games in that market. But one of the big problems was that you had to trust that Zuko and the gang when they did this whole elaborate sort of security setup, weren't you? But they removed that in one of the the subsequent upgrades. And so I believe from a cryptographic cryptography perspective, zcash is the most private of the offerings out there, which is why that's the one that I'm backing
- [35:05]
A
and seems like enough people like it that it also gets the narrative momentum that, you know, like you're going to choose one, you might as well choose the one that a lot of people are talking about on Twitter.
- [35:15]
B
Yeah, but again, people have been talking
- [35:16]
A
about Monero as well. So I think it's.
- [35:18]
B
It's a race between pretty much Monero or zcash.
- [35:21]
A
I mean anything else that's on your radar right now, you're thinking about before I let you go.
- [35:25]
B
And then near Intense that I think, you know, if you've used the Zonal app, I. I'm an investor in that particular wallet. You can basically take your shielded Z cash and move it into any other coin, like send somebody. I can send you Bitcoin using shielded zcash going through near Intense and there's no traceability back to me. And I think that's amazing utilization of zcash because obviously you want to spend it on other stuff, but now you can spend anonymously that goes through near intents. And I think if that becomes a thing, then you're going to see a lot more transactions through that particular L1. Obviously the blockchain earns a percentage of the fees on those transactions and that can help flip the NEAR protocol from inflationary to deflationary and power. I think a very big move because it's down big from its all time high of a few years.
- [36:17]
A
Yeah, everything is everything. Not Name Z, Cash and hype. So you've. You've chosen the right horses, right? Man, I just struggle to, you know? Like, what. Why would my 2017 bag pump at this point, you know? But maybe, maybe. Maybe it's disbelief, you know? Like, it just feels like. Feels like hype is the move. It's new enough. It actually has value. I'm a buy some hype today.
- [36:42]
B
There we go. That's right.
- [36:43]
A
You heard it here first. That shit's down 50%. Tomorrow you'll know because Arthur sold me his hype bag.
- [36:53]
B
Yeah, he got him.
- [36:57]
A
All right, man, I appreciate you. Sorry about those technical issues before.
- [37:01]
B
No worries.
- [37:02]
A
Are always a pleasure to catch up. And hopefully we'll. We'll do it in person at the next conference. I think last time we did in person was in Dubai. That didn't happen this year.
- [37:10]
B
Yeah, yeah. No, maybe in Singapore or Korea. We'll see.
- [37:13]
A
See you next time. All right, Arthur, everybody.
- [37:15]
B
Give him a thanks, everyone. Y'.
- [37:16]
A
All. Later. Peace, man.
- [37:19]
B
Let's do. That's dope.