Crypto Isn't the Frontier Anymore

Transcript

Do you guys still feel like crypto is on the frontier? >> And I don't think crypto right now is attracting the the smartest people anymore. >> AI kind of reminds me of like crypto when like 2017 [music] to 2020. Nobody really knew what you could and couldn't do yet for the most part. And that's kind of like how AI feels now. >> AGI is overall like a net negative for crypto. All right, welcome back to the Delphi Hivemind podcast. For everybody listening at home, this is a special episode. Uh we're all finally in person to do one of these in real life. I think uh we've got a lot to talk about. A lot of interesting things that have come up this year, and that's where I really

want to start. We're kind of getting towards the end of the year. We're getting into Q4. Um I think a really good place to start is a bit retrospective. So I'd like to hear from each of you guys. We can kind of go around like how have you felt that this year has shaped up so far uh markets investing side compared to what you thought maybe coming into the year? Anything that surprised you? I think that's a good place to start. >> Last time we did one of these in person we it was the top of terror. Do you remember? >> Oh that like >> Oh that's yeah that's a good signal.

[laughter] >> Anybody listening to this you've been warned. >> Yeah. What's the what was the question? [laughter] >> So, what is like is there anything that surprised you this year? Like >> coming into this year, we had I mean markets weren't great. I mean, as we got through the first half of this year, markets looked even worse. Depends on what the market you were in, I guess, right? AI stocks, those were doing well. You had things like the memory trade that was earlier this year. The rotation back towards crypto in the last, call it 6 to 8 weeks. Um, is there anything that like coming into this year, if you put yourself back in that time, like you were thinking what happened and didn't happen as you sit here today, like is

there anything that's kind of surprised you recently? Um, a bunch of things. I'd say crypto's outperformance kind of surprised me. Um, yeah, I did a I did a pretty good job with the sort of avoiding some of the draw downs and in the stock market and crypto was a minority of my allocation, but it still outperformed everything else because it cuz it outperformed that badly. And obviously I I think just by virtue of being at Deli and having access to you guys, I just have more alpha in crypto than than I do in in the stock market. And it was like a pretty stark reminder of that just being in you know what we've been talking about for ages.

Zcash, Athena, Lit Hype like um even with sort of 30% of my portfolio it was like outperformed the [ __ ] out of my stocks which uh I don't know exactly what to do with that yet but uh that was surprising. Um, I think everyone was was like has has been in hysterics various times over the AI bubble and I was never I was always pretty bullish on AI and I continued to be. I still think we're not um we're not there and we still have more to to go up.

>> I feel like nothing really surprised me too much. I thought maybeow [laughter] >> I thought that I thought that crypto would have been stronger um to start the to start the year and is pretty weak for a while but what did well in crypto I think didn't surprise me too much. You've had like hype continued to do well. Uh Zcash did well. You've had like Ethan Soul kind of lag. Um then you had stuff like lighter come up and do well. Uh, and really like you've kind of had the market bifurcate into like the store of value type trades and then the the fundamental stuff and I think that was kind of clear like a year ago and we've kind of just keep kept

going in that direction. Um, so I think the recent rally is like definitely a bit stronger than any of us I think would have thought like when it happened like >> Zcash at the beginning of the year like 1500 would have been like yeah you have to sell your Zcash there but now it's kind of like >> um I don't know it's it's kind of like taking on a life of its own now right you can see it going a lot higher so >> I think surprise-wise it wouldn't necessarily be end of last year into this year Um, I think I got bullish at the end of Q1 on STRC stuff and I was like, "All right, this can start the flywheel." What surprised me is how how

badly he [ __ ] the bet on buying back very late long maturity debt instead of like managing a balance sheet properly and and actually letting the STRC thing uh take its course. And so that was the the source of the big drawback. But the the trade-off was now there was kind of a reconentration into a handful of quality assets. And uh I I think I'm pleasantly surprised with how much alts have been able to run without needing BTC to be too strong. Obviously the past like two weeks it's been quite a bit stronger. But I think even the move from 60 to 70s you saw alts really go for it which was pleasant. I mean I'm generally usually in alts. Um so >> just a matter of how much. Yeah. Yeah.

Just usually a lot. Yeah. [laughter] >> Just a matter of how much from 100 to 150% of my net worth >> basically. Um >> I'm bearish right now. I'm 100% long. [laughter] >> So I mean and then it's been good to see just a concentration in quality of assets. I think the good thing is it makes the space investable right for for funds. Whereas when it's memes, it just becomes harder for institutionals, institutional capital to flow in because it's you can't really get behind a thesis that you can tell your LPs about. So, uh I think that broad movement has been good. Um but yeah, surprise-wise, it not not an insane amount just because we were already so far down going into the end of the year and then like it was

hard to be too bearish after that. Um, but >> are [clears throat] you surprised at how quickly like this tokenization wave has kind of taken off? >> Yeah, that's been the big thing. That's that's fair. It's just been the amount of RWAs that have come on chain. I think, you know, it's it's you had two things where I I I was never really I don't think most people were bullish on clarity passing just because of how polarized the the government is and it's not really driven by rational decision-m but just kind of banding together with the rest of the party. So, it was just hard to see a world where you'd get 60 votes. Uh, I was pleasantly surprised with how quickly afterwards though, you had friendly SEC guidance that came out and kind of allowed that wave to continue in true crypto fashion. A lot

of the RWA growth, not a lot, but like a part of it was was um strengthened by just memecoin stuff and and just the attention there. But it's it's a healthy way to bring in retail into that flow at at the same time as as kind of just the broader uh like Robin Hood wave of of assets on chain. >> Uh yeah, I mean it's tough to say like what surprised me because we wrote our year ahead report, right? And I don't want to toot our own horn too hardly here, but it was pretty spot-on like in terms of at least the things within crypto and it maybe like bleeds into some other things we'll talk about later on, but like >> like our like one of our like core like things heading into the year was like we I think it was like a section of the

report called like the no crypto is no longer the only game in town. And it's like there's still parts of crypto we were super bullish on, namely Hype. Um, I honestly didn't expect hype in like Hip 3 to do as well as it did as quickly as it did. Um, which was a super, you know, bonus honestly on top of it. >> Yeah. Like was trade XYZ a bit of a surprise? >> Yeah. I didn't expect it to do nearly as well as it did. I mean, I thought I always thought it would like eventually end up being super successful, but like as quickly as they did it, obviously I think like, you know, the oil thing with the Iran war and trading oil on the weekends and stuff was a a huge benefit for that and kind of attention grabber and kind of put it on the map in terms

of Wall Street, Bloomberg, everybody talking about it. Um, but like no, crypto's underperformance for most of the year wasn't really that surprising. It's kind of like what we expected for the most part. Um, and then we didn't we we had like a market matters and then like a hive mind podcast around the time Bessant made his announcement a couple weeks or a month ago, right? Maybe a month and a half. And I think during that conversation like all of us were just pretty much like no this is like a very clear risk on signal like and so the rapidness of which crypto kind of rerated higher also wasn't that surprising because like we've seen that happen many times in the past where like black rockck coming out and doing the ETF filing like crypto immediately

rerates and then doesn't really give many people a chance to get in if it's a good catalyst which is kind of what we've seen. You haven't really had a chance to buy since then. How much of that do you think was driven by the fact that it coincided with uh AI stock tempering just you know generally those markets >> yeah pro both yeah >> I mean yeah we were kind of talking about that before the basscent thing right >> sad guys running today though memory's back >> but it's true with crypto like there have been no entries um on a lot of the good stuff right Bitcoin >> that's a good sign by the way that's >> 100% it's a good sign and like >> I mean obviously there's been no entries on stuff like Zcash But even Bitcoin, you've had some periods, but like hype,

you know, went up and then consolidated around like 80, like went to 90 and consolidated to 80. That was like your best entry on that. Um, and yeah, it's like everything is just kind of strong across the board. It just shows there's so much like sideline capital that wanted a reason to buy crypto. And again, this is why I think Zcash has done so well because so many things are overvalued and it's like it's something that can just pick up a lot of liquidity. I mean, honestly, it's the one that I think probably surprised me the most. I didn't think Zcash would eventually do this. Like, I was like, maybe it'll run to, you know, 800,000, but like I know it just seemed too much of a like just like a meme obviously like oh, Bitcoin market cap ratio target this number. Like it just seem I don't

know. I didn't think it would actually work. >> I've been playing mainly with per because like >> if it went to zero, especially after like the exploit, right? Um or theug the bug, not the exploit. Um, I was just like, if I own this with a huge amount of my portfolio cuz like I prefer to concentrate into like three, four, five things and then just not do anything for a while. Um, and if that bag went to zero, I'd feel extremely stupid because it's like nothing has really changed like the I mean I guess now I guess you have some kind of confidence that it wasn't exploited, but like I just couldn't get around to it as as just like a it just seemed too much of a meme kabali thing. I think after the bug was like >> a really obvious buy >> like cuz there was a point where I

should have but I didn't it got it got like you I even put in in reads at the time right where it got it felt like the the jelly jelly hyperlid >> time cuz it's like it got exploited but you you knew pretty quickly that yeah there was a bug but you knew pretty quickly that it hadn't been exploited right just based on how much was in the shielded pool it's important using that >> it's important to know it did not get exploited as we can tell >> yeah you can tell it got exploited and went down to like 300. Um, I think that was like maybe the best riskreward time to size up. I wish I sized up more. >> It just happened when I was sleeping, too.

>> Yeah. >> It's also a lot of people like, let's face it, Zcash um, was like a very bored conviction trade and it still and it still is, but especially then and you kind of he was right. >> He was bullish the whole of like 2017 while it was >> not wrong just not wrong just early. But like all the commentary around Zcash when that happened was kind of just people not understanding that there's something with the privacy coin that can always kind of happen and a lot of people were like oh I never realized that there can always be an infinite mint technically in any privacy protocol and that's like a scary thing right and oh now I understand why Bitcoin is totally public and that's actually a

really good feature now right so people are just going kind of like 180 on everything and now people have come back around to the idea that like dishearten the protocol. They've got Tachion coming out soon which is also going to be formally verified like way less code and it's like in an era of AI and all this hacking of like DeFi protocols and everything. Um you can probably make the case that Zcash is one of the like the hardest protocols at this point and has like gone through the most but um again it's like it's just a liquidity suck. It's it's I had this tweet about it like a few months ago and it's kind of maybe like a jaded view or something, but it's kind of like there's a lot of money that is in crypto still that knows that most

things are overvalued. And it's like if a lot of people can get behind Zcash is like this new store of value, there's tons of upside in there because it's pretty easy to kind of meme it to like 5 10% of Bitcoin. And now that it's at 1500 and it's like what two No, it's like one and a half maybe of Bitcoin now. >> Yeah, it's like between one and a half and two I think. And it's it's 1,500 a year ago you'd be like, oh, like top 100%. Now I've talked to a lot of people where they're like, you know, I'm actually starting to think about like, you know, the Bitcoin core dev team and like the quantum thing. They're not really taking it seriously and now people are legitimately thinking like maybe this is going to go to 5K or something, right? Um, so Zcash will be a

really interesting one for the next year. I don't really know where it'll go from here. Um, all I know is that it's going to be like, yeah, super volatile still. Probably like the most volatile coin in the market. >> So, I put together a short list of questions that I'll just like sprinkle throughout this around like a year from now if we try to put ourselves there. Like, do you think this will be true? Yes or no? And the first one I had was, do we think that Zcash will breach 10% of Bitcoin's market cap?

>> I'm going [clears throat] to say I'm going to say no. That's a big number. That's like that's what 8,500 right now. >> Also, like if you assume Bitcoin goes up, it's just >> Yeah. It's a moving target. >> Yeah. >> What about five? >> Five was my initial upside case. Honestly, >> my my like gigabull case. >> Oh, okay. >> Was five. >> Like I could see I could see like Zcash going to like 5K if Bitcoin is like 120, you know, which is less than 5%. But even still 5K Zcash just feels like you like it's gone up so much eventually it turns like right and it'll be pretty violent and you'll get the you'll get the big

80% draw down Zcash like it would be weird if you didn't right um especially because of the nature of what it is of like store value coin >> I don't think you get 5%. You don't >> not in the next year. >> I mean, yeah, it's a big number at today's price. That's like 6K, right? >> It feels like a lot of people are still sidelined on it, though. >> Yeah. I mean, the the it helps that people anchor to Moon Math and it is one of those reflexive assets that Yeah. >> And like you don't have really, you know, the the DAT isn't that big yet.

Like I don't know. I think there's like >> Well, it's not even that's not even really a DAT. They're like just straight mining now to accumulate. >> Yeah. But there are interesting mining dynamics with Zcash too where like since everybody gave up on it the um there's like no like ASIC miners that have been developed, right? And so there's like a 6 to 8month lag on getting new supply and so all the miners now are just like caking because and especially the more Zcash goes up, it's just like all margin, right? Uh um and so yeah, the biggest minor now or one of the biggest is the Cipher Punk, right? and they're actually accumulating most of it. So that's also a good supply dynamic for Zcash when you have your biggest miners like accumulating instead of like the

every Bitcoin miner kind of has to like perma dump right away because the margins are so low. But with the margins being so high in Zcash, it's like they kind of run this accumulation game for a bit. So yeah, there's definitely a ton of reflexivity in Zcash right now for a ton of different reasons like not just price but also just the underlying like m uh mining dynamics and everything, right? So it's definitely one that yeah, you can see it's like the two hottest coins are definitely hype and Zcash, right? And I think if you get to hold a coin right now for three years, I think most people would be like, I'll hold hype, right?

But you can definitely see Zcash continue to outperform everything. I think dips get bought up for sure >> on Zcash. >> Yeah, >> like a big one where people just overlevered and >> I mean it's crazy. It like literally just hit 1k and it's at 155 like 1550, right? It's like a dip is to what like 1300 and >> yeah probably something. >> You can still see a dip probably to like back to 1k and yeah 1k would probably get 1k would probably be pretty good support now. It's like Zcash is a fourdigit coin now, you know? It's like >> it's just that's like the new floor kind of deal, right? Maybe. Maybe not.

>> New era we're in. >> I I still think I think Zcash has more upside from here than hype does. >> Me, too. But I mean, I'm I'm I've been I just think the multiple is like I don't know. I I just can't see hype going like so much higher than 100 or like 150. So, there the riskreward just doesn't seem that high. And I still hold it. It's probably like my second or third biggest coin just because it performed well. But I find it hard to You sort of talked me into not selling on on our last hive mind which was good.

>> This is where this is where you say thank you. >> Yeah. Yeah. Thank you. But I'm still Yeah, I kind of like >> I think >> want to sell. >> Yeah, >> but you uh >> Jason's not going to lose any sleep over it. >> It's fine. Um no, I >> it's I mean I Yeah, Zukos. I don't know. I don't know where it's going to go. I obviously am not the person to talk I I you know I'll trade it with pers. That's how I've you know when I get a when there's a big dip I'll just buy a per position and then when it goes up a bunch I'll sell it and then try to do it again and again again until I lose money and then I'll stop. Um but with hype like there's just so many things that you can like kind of just like look at

over the next couple months to see like okay like is it actually is there actual like decent upside still left in it because it's not cheap anymore right? It's pretty fairly valued even >> and you probably get a local top end of September or like first two days of October. >> September October tends to always be horrible. >> Yeah, it's mostly just with the uh stable coin buyback accumulation all being conded. Yeah. >> Yeah. All in the first week of October. So you assume that's going to be a big trading event where >> a lot of liquidity. >> It's very known. So you got to assume realization happens early. Everyone front runs it and then realizes. So I think somewhere plus or minus 2 days of October 1st you probably get >> the first second whatever it doesn't

>> I think it's either like 1st to 7th but I might be wrong. >> You're doing all of it in like a short window. >> Yeah it's like the first week or two week. >> It's funny I always see people tweeting like reminder hyperlquid buybacks and it's like yeah >> I think people know at this point. Um, >> and you'd assume it that's like a a low multiple ad to the to the that revenue adds a low multiple, but because it's so kind of bland, but it's it's very sticky and it's consistent and you can see it kind of scaling with the product. So, >> also like yeah, 25% to that.

>> Yeah, I think it it's a it adds a pretty healthy >> Yeah, you can definitely give it Yeah. better multiple than other forms of uh plus like also like we've talked about this a couple weeks ago. Um but with like kinetic right like Hyper EVM is like when you look at Hyperlid Hyper EVM is just like a zero. It doesn't really play into the valuation of Hyperlid at all. Um but clearly like with Kinetic and and Allesium which I think the test net just went live today uh and it goes for a month maybe four weeks >> before mainet launch like >> uh I just know there's like a ton of money in hype that in the hype eco which is just hype right uh at this point that would like to do stuff in the hyperlquid you know ecosystem

>> whatever happened to all the lending protocols and stuff >> there's nothing to do on hyper EVM >> they just did it they're doing it at the base >> manual borrow Oh yeah, there's there's >> they go rugged >> basically. >> Damn, >> because they're doing it themselves. >> But hyper Yeah. So like Hyper EVM the way it like currently exists isn't conducive to any kind of like onchain activity like load through like you can't do anything that you would do like on Salana on Hyper EVM which is the whole point of having like a you know like a like an EVM for Hyperlid. You want to do all the things you would do on chain speculate trade spot right all of these things you just can't do them right now. But kinetics kind of launching this L2 allesium to kind of address all of those things.

>> What about options? Well, that's what I was going to go into options. >> Yan posted a governance proposal. >> Governance proposal [laughter] for years. >> You're a community member. >> Uh well, community member usually means you're down, [laughter] >> which I am not. Uh no, but uh I do think options are probably the last big primitive that haven't really taken off in crypto yet. >> Um onchain in particular. >> And and I think >> even offchain I feel like they're a but not Yeah, >> they do billions. They do decent volume, but I I I think the big change here though is just the growth of RWA in crypto has enabled a universe for onchain options on RWAS, [clears throat]

right? And so you have massive perks volume, but you don't really have onchain and and bringing those assets on chain allows for market makers to to hedge and and provide liquidity. And and so if you look at Robin Hood, that's their biggest revenue driver from retail. Uh so you kind of just need a a bit more of a retail friendly UI to to have them operating on chain. I think 1010 is one of the things that woke people up to, you know, per aren't the perfect way to to kind of express bets. there's a lot of path dependency and so I think the option side uh you don't even need to make a bet that it's going to flip per by any means. I think it's right now it's just absolutely a zero or near zero and so you just assume it kind of can

grow even you know a 10x from here is still a fraction of of per's volume. So I do think there's a lot of opportunity for that to grow just through the growth of the RWA side. I think purely on crypto it it it it is you know less compelling because you know at the same time because you have a fewer a concentration of investments in crypto that means the option side is also going to be limited. Um but for the same reason that hype has done better than everyone expected which was the growth of RWAS. I think that sets up a pretty good path for options to to have a moment. Um, and it's >> Do you think it'll be through like onchain options like through EV like hyper call maybe going live with kinetic or something like that?

>> Uh, >> what's what's what does that mean? >> Uh, basically on so Hyper call right now I think one of the things that make it attractive and and can be something that the hype community gets behind is because all of their options activity gets hedged through hype. So, like someone bought a a put spread on on Hyperall the other day and when it got hedged, it was 5% of of uh S&P volume on Hyperlid. So, you have this narrative of this actually being very constructive to RWA per volume and and like you know with a a little bit of growth in hyperolctivity, it can actually translate to a pretty material amount of volume on hyperlquid. And so I I think

uh you have a pretty good setup where the two can be synergistic because it's it's not one they're not trying to build their own per back end, right? They're going to be purely offloading that volume to to Hyperlquid. And so you have a pretty constructive setup there. And then the kinetic element is just basically them building on hyper on an L2 on Hyperlid or or bridging liquidity over there and allowing people to trade >> there. >> Taps into Hyperore. >> What happened to when are we getting the Celestia catchup [laughter] route? The air drops are coming. >> Yeah. >> No. [laughter] >> I mean, like, can we just cut that? [laughter] >> I might have to dodge now.

>> Um, yeah, I agree that options are are the next big remaining met. [laughter] >> I mean, what do you want me to say? Like, >> I think it's >> we're going to have 10,000 player tunes. >> It's not I mean, I never believed that. >> Nobody bats a thousand. [laughter] I was bullish on TIA, but I never It's funny. I was bullish on TIA, but I never actually believed like the multi-roll thesis. It was kind of [laughter] was kind of down 95%. >> I just really It was down so much that I was like, it's it's it'll have its moment. Um, >> will it still?

>> No, no, no. [laughter] >> I mean, they can do some stuff maybe, but I don't know. But yeah, I mean I think there's there's definitely too many like chains in crypto, but that doesn't mean a new one can't come along and be worth it, right? And like you're seeing that with Robin Hood made a lot of sense. It's like do we need another OPS stack L2? Like of course not, right? But Robin Hood has something that these other players don't. And the thing with Kinetic, it's like do we need another L2? It's like we don't. But we could use a Hyper EVM maybe. Like I don't know if we actually need a Hyper EVM type thing, but it's a potential thing that we could use and there that makes more sense than the Hype EVM, right? Which has like less

throughput than Ethereum. >> I think it's one of those where you you won't know if you will need it until you try and and and you get clarity on whether it's failed like much higher from here kind of thing. >> Haven't you tried this like millions of times >> just specifically on Hyperlid? >> Okay. Okay. >> That's the thing. It's like, yeah, it's not going to be too different from things we've seen, but it's like >> Hyperlid needs it own >> for my bag. >> We need a Hyperlid native cat coin. >> That's exactly it. We have Purr on Salana. Now we need one on >> Yeah, makes sense. >> I mean, just think about >> there was a purr on on that was like I got a decent air drop meme. Yeah, the actual OG meme. I completely forgot about Purr.

>> Yeah. >> Wow. >> OG hype meme. >> The proxy for hype before TGE. That was a great trade. But what if like uh but I guess the the thesis is just like hype and lighter can launch options but it'll probably they'll probably need like the significant demand signal from the existing ones to want to invest that and so you can just you have time. >> I think lighter is is going to do it. >> Lighter will do it first. I I don't think the hyperlid core team is interested in building it out unless some unless teams try and fail and then they're like okay like we I guess we'll try it. >> About doing it. >> Yeah. >> Okay. Yeah. I've heard I heard from the team but I didn't know if they talked about it publicly.

>> Yeah. in in the coming months. I think they're coming out with like a neutered version at first and then eventually a fully live version. >> But it's one I um so one of the issues with options is just building up liquidity, right? And so I I do think you probably have a pretty bifurcated market for a while because there's just so many assets to trade options on where everyone's kind of focusing on different things where you know so for hyper call they're kind of going the RWA path and and leveraging the big backend liquidity of of of hyperlquid pers. So you kind of have this unique approach. Derive has been doing building on theirs is a more institutional front end, but they're

doing on majors and and and kind of their own um uh and and like they have, you know, your standard kind of derabit front end of of all the Greeks and all that stuff. So it it kind of caters to a more institutional crowd, but I think all of those are are still doing kind of dimminimous volume. So you have these you'll have these pockets of success and and probably eventually you'll have a winner take most, but it'll take quite some time. I think all of them will have a rising tide. >> Yeah, it's [clears throat] definitely too early. I think drive is like the clear winner right now, but I think it's complacent. It's complacent to just be like they're they do 96% they're going to be the winner if options takes off, right? Because >> even like, you know, Paradex, it was weird. Paradex launched and they just

did PEPS and everything even though their whole product was options and so they're finally going to bring that on and they're like a real competitor, right? Um, >> so token was more liquid, I would have bought some. It's just >> Yeah. Yeah. You can't. >> It was like Yeah. 25K moves the price like a 2x almost. >> Yeah. >> Really? >> Yeah. There's no liquidity. >> Yeah. >> Well, I mean, people just That was like one of the worst TGs ever >> on dime. >> Yeah. >> It went >> I mean, derive is not very I tried to I've been trying to buy it. It's like >> But if you bought through the I think you have to use the RFQ and then it's okay. Oh, >> that's what I've been told is that that's if you really want to buy, you need to just use the RFQ.

when it's early trends like this, options being a prime example, how do you guys think about like getting exposure to that? Like do you play almost like trading like a thematic basket? So rather than saying, "Hey, I'm going to bet on this one winner." You want to get exposure to the top three in this case top three, but could be three to five names when it's like this early to tell. Like you just want exposure to the theme and the the idea is one will outperform the others, right? one will maybe get to like a winner take most type of market eventually, but since it's still too early, you want to get or have exposure to all of them.

>> I think you have a couple and then you wait the one that you think can outperform within them >> and you're flexible, right? Like if you see the facts change, you just sort of size into the the one that's winning. >> Yeah, it is just so early to to to to pick a a winner. So, it's like you just >> there's nothing to win yet even. Yeah, >> it's still like I don't even own any of the option one. Like I owned derive for a little bit but then I sold it was like I don't know it's I think it'll do well but it's still >> I feel like right now in the market there's like so many other things >> but now in the market >> what bring Duncan back on the podcast.

>> I can't believe you faded Duncan on synapse >> on since summer baby. [laughter] >> Let's get him back on. >> Yeah. >> Yeah. Um, but do you think so like to that point though, do you think options are finally at the point where like this momentum we're seeing recently like is the turn of the tide like is the trend going forward like it's not going to it's obviously not going to go backwards but like it's not going to stall out. >> Yeah. >> Like I think the issues you kind of hit that inflection point. >> Yeah. The issues historically were were just design right the these you had vaults which come with their own set of issues and and that was never viable but at the same time you had derabit that was working. So the onchain like with Hyperlid you have an onchain equivalent

for the off-chain product right it's it's it's almost one it's basically one to one um for options it was never that it was you had these random vaults or or other kind of weird products where you couldn't sell your options back and and you had it was you know imperfect and so liquidity was tough and you basically had a big cold start problem. I think now you're kind of seeing an attempt through a design that mirrors centralized equivalents and and so that paired with RWAS and everything else that's coming on chain plus like you could have you know options on on on preo stuff through hyperlquid and and so I think there's a lot of cool interesting ways to express bets on a wide variety of assets that make the probability of success of options now

much higher than than they were before. Yeah, it's finally gotten to the point where market's mature enough. Design is there. >> They're also cheap as well. >> Kind of like, >> you know, Synapse is 35. What's dime? Like 60 derives 400 now. >> Dime was like 4 mil. >> Yeah. But but but like uh something. >> Oh, is it okay? >> FTV or or market cap? >> Um probably FTV. Like >> it went up a lot. Like 30 cents. Yeah, I think they're all pretty like cheap enough that you probably want to have, you know, >> maybe maybe I feel like nine figure valuation is not super cheap for something that

still needs a lot of growth. >> I don't know. The the the the sort of TAM is so big. >> It is. Yeah. >> Like so big. >> And it's been proven. >> Yeah. >> And it's liquid, right? Like it's not like you're Yeah. like you you can get these things at like seed private seed round valuations and it's liquid. It's a very big TAM and it seems like it could inflect soon >> and the longer the market stays strong and everything kind of picks up and these don't necessarily the the more obvious a potential rotation becomes.

>> Yeah. >> It's like a fundamental asset that people can get behind it. you've seen it play out with hyperlquid and lighter and others like >> we talk about investing and wanting to be investing on the frontier right and that frontier is Jason mentioned talked about this in the year ahead on the deli venture side it's obviously been a very core part of the thesis since its inception crypto no longer being the only game in town is my question is do you guys still feel like crypto is on the frontier I can start probably because I think I don't think so is the I mean I I mean I think the frontier for me is where the

smartest people are like building the future and I don't think crypto right now is attracting the the smartest people anymore. Um, and I don't think like for me it's you know there's this Kleta Perez innovation framework where you have um like the the 0ero to one part where there's like a lot of new um things that need to be built and then there's like the deployment phase where you you need to actually just like take the existing things to market and it's where you can kind of like in the 2000s for the for the internet where you can buy these things liquid and just bet on like the continuous compounding and for me that's where we're at with with crypto where we've kind of been saying this for a while right there's like some clear things that work, per work, stable coins work, you know, like the the

speculation and token uh creation. For me, those are the three sort of use cases, right? Like token um issuance, per stable coins. And I think it's a pretty sure bet that those continue to compound over the next, you know, decade. And so, um I don't think it's the frontier anymore. It's kind of like the blocking and tackling of of of deploying these things. And that's why a lot of the opportunities I think are either in liquid markets or even in in in sort of equity startups that are doing the hard work of like deploying these things in in emerging markets and stuff like that. So I don't know I I don't feel like it's the the frontier anymore. But I would I would agree with that. Yeah. I think that um I think crypto is like not super venture

backable at this stage because again to your point like everything's been built, right? Um, and we've like we've literally built all the infra and what people need to build now are like the scrappy little app teams that honestly don't need a lot of funding. I think though that crypto is still like the best liquid market in the world. And it like I guess it like it wasn't but for like half of this year. But I think that's never really going to go away. Like you're always gonna have these periods in crypto where something just kind of like starts happening and everybody gets behind it and like you have this new meta and it kind of just he keeps happening over and over again and it's hard for me to believe that we're not just going to

keep >> but it could be like right the >> Yeah, it could be or we could be at the bottom doing a new big loop right now. Right. So we'll see. Um >> right now I think it's a smaller loop. Right. It's been smaller loops. I would say >> it's the biggest loop we've had in a while. >> Yeah. >> So, is it like the beginning of a new onchain phase of like a lot of experimentation and stuff or is it somewhat of like a deadcat thing? Like not totally sure. I think social trading >> we're like pairing meme coins with stocks. It's just like >> But I think that's like a byproduct of of permissionless systems.

>> No, I'm I'm not saying I'm not saying it's a bad thing. I'm just saying like oh we're back to like onchain experimentation. >> Yeah. But like we're getting better. The thing is now we're getting better assets, right? So you're going to see a lot of similar things just around better assets now. >> And hopefully it'll lead to other cool things that >> you can't get in Trady, right? Like >> um these apps where like you use a you use a crypto neo bank and then all your purchases automatically are giving you tokenized stock of wherever you shop at. That's a cool product that gives a lot of like average people just this kind of passive wealth building thing, right?

And those are the kind of products that crypto can like uniquely excel at versus a lot of other stuff. And so when you get more stocks on chain like hopefully you start because stocks are real like wealth building tools, equities are right versus there's like a few crypto you can say but a lot of crypto is like zero sum, right? Um so when you get more not and they're like non-correlated too to the rest of the crypto market and so that makes like all of DeFi safer as well right? Um, so yeah, it's definitely purely a liquid market at this point. I can't even remember like the last big crypto venture protocol that is like come out in

>> variational I guess. Oh, it hasn't come out yet, but yeah. >> Yeah, I think that's always the [clears throat] concern of Yeah, Lighter's probably the most recent example, but yeah, the concern was always >> all the excitement is happening in equities, which compound like not only does that mean no excitement in crypto, but then capital leaves. So as you bring exposure to that asset class more on chain, it just makes the other environments more more more likely to to do well when things start picking up because people are staying on chain. They're keeping their assets on chain. Yes, there might be trading stocks, but when crypto moves, it's much easier to move those assets off of stocks into crypto versus like I got to take it off the brokerage and deposit it back, which no one does, right? And and so I think the the stickiness of capital being on

chain really improves as RWA's move on. So, um, yeah, new inflection point. I mean, it'd have to be like a gradual meltup at this point, which is kind of what you want to see. Um, I do you think we can get new all-time highs in Bitcoin without some big macro event? >> Uh, probably not. >> I mean, I do. I think it'll just like Yeah. I mean, would Well, I guess what do you mean by big >> all time highs are it's like 100 It's what, like 130K you got to get to pretty much. But like what do you mean I guess by big >> like uh >> big form of of QE in some form or another?

>> Oh but uh without that I mean so are you then saying that they don't need to do QE because >> well it seems like we're going to be tightening for you know the next call it 6 months >> 3 to six months >> or not not loosening right >> I mean yeah I think >> maybe yields get out of control. I don't think we're going to go there, but like yeah, I I guess no. In that case, no. Right. If if that's what you could Yeah. Uh no, I I Bitcoin just is a macro asset, right? Like that's kind of how it trades and it probably needs some juice from that. I mean, clearly it does, right? Bessant Bessant's announcement is kind of like the reason why everything's trading up now.

>> Yeah. >> Um so clearly it does. >> I mean, it's it's positive. It's liquidity positive. just the liquidity is a different form factor or way in which it's coming in. >> You can argue it's healthier to not be relying on one buyer. >> Oh, absolutely. Yeah, absolutely. Um >> because everyone's just not watching him like a hawk. But back to the original question, is it is it on the frontier? >> Probably not. I mean, like I guess it depends on how how strict your view of Frontier is. Um because then Frontier would you put any S&P 500 memory stuff in the frontier or or you're thinking purely like privates in venture as frontier >> in like tech venture?

>> I think SpaceX is at the frontier. I don't think the memory stocks are at the frontier. They're more like telecoms or something. I don't know. Maybe some of them are >> frontier adjacent. Yeah. >> Yeah. >> I mean I wouldn't say it's not but like it's not as much as it was before clearly. Um, I mean there's still things like that are super important and that like I would consider like frontier worthy like you know like I don't know like pioneering like self-custody or like privacy like these are all like super important things and like you know crypto kind of like actually enables it in ways that hasn't in the past. Um so in that sense I would say yes it's just not as new anymore. Um, it's like uh like AI kind of reminds me of like crypto when it like 2017 to

2020. Like we were still mapping everything out in crypto back then. Like not all the primitives were built. Still had new chains. Nobody really knew what you could and couldn't do yet for the most part. >> And that's kind of like how AI feels now. Um, >> yeah. For me, >> you're still kind of mapping everything out and like the branches and directions it can go versus crypto you kind of already know. It's more of what you pointed out building on the things that you know work. >> Yeah. The way I think about the macro is like I think I think I said this on an episode before but there's like three important forces I think in the world.

One of them is the advent of AGI. I think the second is just increasing multipolarization of the world right and like and wars and and like the the bricks alliances all this stuff that's happening. And the third is just like debt and demographics. And I basically think AGI is overall like a net negative for crypto in that it pulls away capital, pulls away interest like um it doesn't really need crypto. I don't think >> it's deflationary. Um and I think the other two like multipolarization and debt and demographics are like very positive crypto. And so it's like I think the overall waiting of which one of those forces are in command kind of like >> at any given >> and it's why I think you have to kind of have like exposure to both like these

and I think crypto gold like these assets benefit from the from the latter two defense stocks defense benefit from the from the latter two and then all the like AI complex benefits obviously from from the AGI buildout and and I think you kind of like everyone's going to need to have both and I think all like I would say like AGI is clearly the strongest force, but like multipolarization and the the whole thing is is progressing pretty quickly too. Like we have like what five fronts of of wars going on in in in the world right now. Like it's it's pretty wild considering like what we all started in crypto. This was sort of like unfortunately that like one of the bullcases for for this stuff, right?

>> Crossboarder flows. Yeah, >> crossber flows just like increasing bulcanization of of of the world and like that shit's all playing out. Um and obviously dead in demographics like we've been proven right and I I think that that is never never turning right. It's just like demographics are getting worse. If anything AGI forces more spending right by governments so like more debt and so I think those two forces are like extremely bullish for crypto and gold and it's like why I think you have to kind of have both in your portfolio. >> I agree. I I think another thing is just thinking about the duration of these secular trends or what have been secular trends like the currency debasement debt spending. I completely agree with you. I think reality is it probably gets worse before

it gets better. But there is this interesting like push pull where if we get to a point with AGI and the rise of agents and then humanoids and like industrial robotics, right? that being net additive and potentially massive additions to the labor force, right? If you think about like agents as additional headcount, right? And eventually robotics as additional headcount. If there's a world in which today we're looking at this and saying, okay, the debasement trade is still very much alive and well and these things are going to happen and we'll continue to be bullish for the debasement trade, Bitcoin, gold, crypto. But then when we get to a certain point, you kind of cross that chasm. Like if AGI and agents and robotics wind up

being the thing that actually helps these governments like governments have to invest in this stuff and like have to get behind it because there is the alternative is just spending too oblivion, right? And debt and currency debasement everything kind of blowing up. If they do get to a point where that is making the labor force and the economies grow much faster, a lot higher productivity, like it's actually a bearish case for Bitcoin longer term because that is where that's like the option right now for these governments to actually outgrow that massive debt spending or deficit spending that [clears throat] leads to debt. You know what I mean? It's like this this paradox in a sorts where you got to think about the duration of how long these things are going to go and when the inflection is going to actually

happen. Yeah, but then every time there's a hiccup, it's gonna I think attention just assume like goes back to debasement immediately. when you're going to have uh I think data centers have just become this lightning rod for the left to blame everything on and and so uh you have a bunch of kind of Chinese misinformation coming in getting people riled up at data centers in the US and and and and uh like leaders in that party for better like I I think it's just out of interest of like this will rile my my or galvanize my base and so they get behind it despite like previously being kind of tech forward So I think that will be and that that's this is not like an insight like people this has been known as

probably one of the bigger headwinds for data center expansion. Uh >> isn't that kind of bullish the AI trade >> if you like it though? >> I feel like it slows it down a little bit and because there's there's this there's this time component too where so much of this debts fin is debt financed and you need the revenues to come in. So any kind of headwind to getting there will force the borrowing cost to go up and and and just increase the probability of of this thing not playing out and like this you know you you >> need less demand right to maintain like a high high price of tokens and and like high revenue >> if the data centers it just like smooths that it makes it less likely you have this like top and bust >> what's the it's not Jensen's it's uh

what's uh whatever paradox I think it's Jensen's basically the the as price goes down utility goes up by more than Jeans jeans yeah and so I think you know part of is is that where you know you need this data center build out to to make just more random use cases integrated with AI because it just becomes so insane. >> But I think you're going to have like next year already like 25 to 50 gigs gigawatts of data centers build out like that's like a lot of a lot of data centers. Obviously maybe some of those are canceled but it's still like a lot. Obviously revenues have been inflected a lot too. I generally think that's like one of the questions is about like what's the most important thing?

>> Yeah. One of the things I wanted to talk about is like what is the most if you had to boil down like your investment thesis or lens right now or more specifically like your portfolio, right? Or where we're trying to invest like your bags. What is the one thing if you had to land on something that is like the most important for your investments? >> Yeah. or like our investments going forward like your thesis over the next two to three years and I I do think the data center built I mean it's it's it's definitely not a huge concern but it can become a concern very fast because then it becomes you know we already have a compute shortage I think where the AI debt bubble eventually like pops or where people were talking about it is

eventually if we actually like overbuild right like no technology cycle has ever gone perfectly where like we you know exactly what demand's going to be 5 years from now and we build supply to that exact demand, right? You're always going to overshoot, then you're going to undershoot. Like that's just how these cycles work. But to Yan's point, like if there is real not just push back, but a lot of data center buildout gets canceled, that computer shortage gets worse, like pricing doesn't allow for more use cases to come online because again, pricing stays high. Like I I think that's I think it's a valid concern or a potential headwind. I think the most important number for my portfolio is like foundational lab revenue. Like I think that's for everybody's open to be honest. Like >> revenue

>> if that turns it's like everything is going to >> sell off. Doesn't matter where you're >> I think there's there's some scenarios like cuz there's two reasons it could turn or like I'm sure there's there's more but there's like the two big ones I think is >> um there's just isn't as much demand for AI as we thought, right? like this stuff isn't as useful as we thought and stuff and that is clearly like the most bearish and then there's like open source models gain some of that market share and I think that's like short-term going to cause some problems because there's a lot of like uh data center commitments that are that are backed by like open AI and and anthropic revenue and stuff like that but I think we can digest that and it's actually like bullish bullish for the AI trade long

term and so I think >> the it's almost like the total amount spent on LLM tokens is probably like the metric that matters the most for like the long-term health of this market, right? Like if if that keeps going up, whether it's open source or anthropic and open AI because I Yeah, I don't know. I do think there's a world where like anthropic and open AAI >> aren't worth that much. No, actually like I I think it's like I >> like a melting ice cube. >> Yeah, cuz which is an interesting thing to talk about because obviously people are very bold up >> but >> and throughout IPOing later this year at what around two trillion like >> Yeah. I mean, the Bulls make great arguments like the Brad Gers and and those guys and like who am I to refute them?

>> Yeah. Yeah. >> Um, >> true. But, uh, they also have big big bags. Um, >> yeah. I think that the >> anthropics the new avalanche is what you're saying. >> I [laughter] I think the L1's is like a really good it's a really good metaphor for this. >> Clip that. When I when I first invested in in uh when I first started investing in in the labs, people were really uh bearish. Uh, and it was like basically the L1 thing. It's like, yeah, these things are are great, but how do they capture value? You know, this just going to be commoditized just like Blox, right? Intelligence is going to kind of be like block space. It's going to be commoditized and and then exactly like L1's, they just ran in your face, right?

Like no one, first of all, they weren't, it turns out they weren't that commoditized. Similar to L1's where it's like actually uh at least initially it's like everything happened on Ethan Soul, right? There was there was a lot of them, but nothing was happening on most of them. I think with intelligence is a bit different because obviously like I think it's way less commoditized than block space right like anthropic and open air are like meaningfully better than than the others in a way that I think Ethan soul arguably aren't. Um, but I I think it it ends up being the same thing where now it's like you have this like magical thinking that you had with L1's at the top where everything is going to run on these things and like you you don't need a DCF really because these things are going to secure the

whole economy. And I think you have that magical thinking with anthropic and open AI where it's like these things are are like ASI and recursive self like super intelligence. They're going to solve like all the scientific problems and stuff like that. But I think you actually have to bet on that because you can't really I don't think you can like I do think this thing especially with what we're seeing with open source does tend to commoditize and so and I don't think you can sell frontier intelligence tokens at a sufficiently high price to justify the current valuations. I think you have to like internalize it and like start what Anthropic is doing, right?

Like putting together a wet lab and inventing new drugs or like what what OpenAI is doing with chips and new like uh maths discoveries and all this stuff. And so I do think there's a world where like intelligence just gets super commoditized and and these things like just incinerate capital, you know, like Open AI and Anthropia. I mean it's clear that they're worried about it though if you because if you think about you know at first the idea was always that they would generate the most revenue and thus would be able to fund the most uh capacity for training and and model improvement and would stay on the frontier by a large enough margin that you know the really valuable tasks will be worth spending money on. Uh, and then you know seeing >> people don't want to use them for that

[ __ ] Like they don't want you they don't want your [ __ ] stolen, right? That's what you're kind of seeing now with >> there's that there's um there's just what they're kind of advocating for with, you know, let's pause progress and and kind of trying to pull up the ladder behind them and and so if you were ahead and you thought you could stay ahead, you would not be pushing for that. So I I think like there are definitely concerns from them on that front from open source and and kind of everything else catching up plus like the the path to to monetize monetize in different ways uh to indicate that these things are kind of nipping at their heels and and it's just hard to see that >> and the and their business is not charities right at the end of the day.

So like I think the point about the wet labs is it's a it's a signal of what's to come. like that's the trend they almost have to go in because I agree and you can have both you can have both business lines right like people will still pay for Frontier Intelligence still pay for Frontier tokens >> but long term like where does your enterprise value like really get crazy crazy numbers it's being on it's basically monetizing that or internalizing that IP that you can create from being on the very frontier >> into things like a wet lab and other breakthroughs like I think that's the way in which they have to go and they will What's like the growth rate of the frontier lab token usage right now? like >> token usage is down

>> but uh well actually token share token share of token usage is down token usage is up and revenue is up a lot like I think anthropic crossed 100b okay and so like it was crazy like what a couple couple months or I guess quarters right quarterly data um of like that just kind of like ticking in the opposite direction growth rates slowing >> eventually like you know the the lack of profitability ility will come calling too like you can't you need to keep funding this in in some form or fashion whether it's selling equity in the market or I don't know what you do to keep funding it but it's like a race to stay ahead and if you optimize for profitability you'll fall behind so they need to keep yeah keep telling this

growth story that the market will keep buying and >> but it it can be a rough unwind for sure >> it's interesting to think like how how systemic do we think the two big labs are to just like the market in general. Like let's say OpenAI filed for bankruptcy tomorrow, right? Very hypothetical. Like >> clip it. >> What h what happens, [laughter] >> right? And and there's and there's and there's >> the one side of the obvious is like everyone would be like, "Oh, that's going to be that's going to be like, you know, a nuke getting dropped on the market, right? Because it's a very bad signal." The other side is >> I think corweave would would go down like Asia. Yeah, there's definitely%

there's some ripple effects that that take people down. But then there's the other side of like you've got Enthropic, you've got the hyperscalers, maybe it's a Google, maybe it's an Amazon, who knows that come in like those assets of what OpenAI is like are going to get bought up by somebody, right? and like that person or that entity then is even further on the frontier. Like I don't actually think that that would deter like the AI buildout or like the trend even if one of them necessarily goes down. Not to say it wouldn't cause a ton of volatility in the short term.

>> The reason they went down the thing it depends on the reason. I feel like it would >> I think it's I mean Open AI could get to a point where they just can't really get >> I mean the odds that it would be something just totally idiosyncratic to Open AI seems like very low. It would have to be something that just affects everything. >> That's fair. >> So >> I mean they're like their demand is underwriting the buildout of these data centers. And so if it's like a structural demand problem then we're cooked. But if it's like just a specific idiosyncratic open AI thing, they're just like, you know, getting out competed by someone else, then I think the market can it'll be painful, but the market can digest it and find some other source of because the demand is still there, right? People still

>> there's there's hundred billion dollars of tokens being spent on or or like between Antropic and Open AAI probably like 170 billion or something dollars of of of spend on tokens. And so the demand is there and it's I think I think someone else would fill that demand it would be if it's open source it's very bullish for AI industry long term it's very bullish for the neoc society >> yeah it's society exactly it's because the the margins of the of the labs are just like I mean like any margin to some extent is like kind of a dead weight loss to to society right like I mean it's hard to say that because they're reinvesting it into >> producer surpluses >> yeah they're and they're reinvesting it into like making smarter models and I think they're they're like very good

stewards of this stuff I think it's far better that they steward it than open source to be honest which is a kind of a hot take as well but the yeah I think we're probably fine is the I wouldn't try and if it was like a structural demand issue then I would try and sell before but if it was like the open source taking share I'd probably just like hold through the dislocation maybe try and sell my core we if I can get there on time but >> otherwise my computer >> yeah exactly [laughter] >> when open goes back >> it's like the yeah it's not like it's going to be a 10:00 a.m. announcement or whatever. It's going to happen on the weekend and you know futures >> everybody already sold on Friday >> left hold in the bag.

>> Yeah. >> Markets won't even open you know we're taking Monday off. >> I love that. I wish we could do that in crypto. >> Do you think 12 months from now the AI bubble has popped? >> No. >> No. >> No. >> Same. No. Yeah. >> No. It's probably like a 2028. >> I think 20 Yeah. like 2027 probably going to be pretty good year overall. I mean, >> I hope so.

>> I hope so. [laughter] >> I think I think though that it is like it's definitely not early by any means in anything, right? So, >> Bitcoin's barely 80K, bro. Seems pretty early. >> Uh >> close to the lows, >> baby. Man, Bitcoin could be 100K for like 10 years. Like, you never know, right? >> Sir, >> gold went through what? like a 20-year bare market. Like >> it's definitely possible. >> Oh, brother, please no. Peter shift's adulthood. [laughter] >> I think Bitcoin is Yeah, Bitcoin is an interesting one these days. Like I don't actually have a good read on it.

>> Me neither. I think what's interesting is like as we've been talking about for the first time, at least for me, I think it's the first time where >> Bitcoin doesn't necessarily have to do well for >> other stuff to outperform. And it sounds simple, but like that's never really been >> the case. Like there's a world where like BTC could actually for bunch of reasons like we're talking about monetary policy tightening like financial conditions tightening where like BTC drops to I'm not saying it goes to 40k but let's say it drops back down to mid70s but like it probably takes Zcash maybe with it. I don't know.

>> Um but things like hype or like options like there's things out there that have >> Zcash gets to 5%. [laughter] >> Yeah, exactly. I mean it's actually I didn't actually put a disclaimer on that question like that could be a way where Zcash stays in Bitcoin noobs. >> I mean it's same with honestly Bitcoin Ethan Soul are all kind of like I have no way to really think about those assets right now. Like I do think that a lot of the the hype the Zcash all these other ones are capital just rotating out of ETH and soul like >> into these other protocols right and especially ETH. And I don't I don't mean I don't need to like [ __ ] on ETH anymore, but um it's just yeah, those three assets it's clear that there's

still not like a lot of outside interest in them, right? Is is there outside interest in Zcash? Like I don't know. I would find that kind of hard to believe. It's like to any big extent. I think there's definitely some in outside interest in Hyperlquid. Um anybody who works in like finance, they've had like Trade XYZ on their screen for all those big IPOs and everything, right? Um, so yeah, like the this whole like dispersion thing has been a theme for like two, three years, but I think it's getting stronger to the point where we like everyone's always dreamt about totally dislocating from Bitcoin.

>> Yeah. >> And like we are getting closer. We did it. >> I think I didn't know. [laughter] I really and that was my kind of my I was like really scared cuz I didn't know that was possible until basically this year when it kind of like happened that Bitcoin just sucked and like alts did did pretty good cuz there was like the sailor thing and like there was a thing of like ETH potentially being one of the most overvalued assets right on on the on the planet or whatever and that was like I like well if ETH's if ETH's like a $10 billion asset what's the rest of crypto going to be and now I kind of think it'll be all right because because even trading volumes which is what like anchors per valuations or like majority already note crypto assets. So, I actually think these things can just can

just die like silently and everything else can can I don't know if you guys saw that. I don't know if you guys saw that that that clip of that Tulip King guy and like a lot of people were [ __ ] on for it, but I didn't find it too crazy of a take and he's just like basically we just misallocated like monetary premium. >> Yeah. >> To like billions of dollars to like you know Ethan sold and like other L1 tokens and stuff. >> I agree with that. I just don't agree that is going to all flow to Zcash. >> Yeah. I'm not saying I'm not [laughter] saying it's all Yeah, I'm not saying it's all agree with the first part, but I do agree with the first part 100% that it's true like >> um it's like objectively true, right?

>> And >> Tetris was right. >> Yeah. >> Tetris Capital. Yeah. Wasn't he an ETHO? >> No, they had the big Europe. Oh, Tetris Capital. I thought I was confusing. Yeah, the DeFi guy. >> Tetris Capital. They were just early. They they shorted the bottom. Yeah. >> Really? >> Well, yeah. >> They were short at like 200 bucks >> and then they they like but it went down to like 80 and they were crushing it and then >> just when was it 2020 to like 4500 >> sucks.

>> I did have a question for for mostly Jose. What do you think the odds of like a like AI lab nationalization thing happening is? I I I think I don't I have no idea. >> Have you thought about it much? >> Um I can't say that I have. >> Interesting. >> Yeah. Do you think it you Yeah, >> I think it's a possibility especially if there is some like breakthrough with you know >> RSI but who's the forcing because like right now you're seeing um and which is like adding to the bare case for the anthropics of them saying you invest in us which is you know indicating basically help us make sure that we

don't secure the bailout. Yeah. Yeah. Exactly. >> Uh so you think I guess which direction forces it? I mean, it it seems like kind of like they who which one forces I mean I guess it depends on like what happens, right? Like I think if if they need a bailout before they like get like I guess they won't need a bailout if they get some breakthrough with like AGI or ASI or whatever everybody's calling it now. >> They could still need one, right? If I mean they might. >> I wouldn't be against you like a US investment in it and just throw it in in basically like either social security or like Trump accounts or something.

>> Nationalization would be so bullish. national. Yeah, but like >> the [laughter] reason it was like a really stupid like a binary nationalization or >> the reason I brought it up is because it's just like a like a very stupid scenario. It's like okay, you like develop AGI or like super intelligence. Like there's no there's no world I see in which you know the federal government and the military is like yeah entirely in private hands. >> You can just have super intelligence. >> I'd rather it be in private hands than in the government's hands. >> I'm not saying I wouldn't. I'm just saying I don't see a world in which those two things are true where like private develops it and then military is just like yeah you can have that and like we like I just don't see it's like anytime we've developed >> but you have like you have like defense

companies right that are that aren't nationalized that are there's just like a lot of regulations and like >> the reason I bring it up is like it's just like the nuke scenario it's like the analogy right like that was developed by the government essentially with all private institutions and it's not too much different now right it's kind of being developed in conjunction with like investment or whatever. Um, you know, their policy advocating in Washington, it's not like completely siloed. And if you do get something that is just like, you know, orders of magnitude smarter than everybody that can make all these military decisions, you know, science decisions, whatever it is, essentially the stuff that you were talking about earlier today in one of your sessions that you didn't think would happen, like the decision-m is going to be the last thing that goes.

But if they do create models that can make good decisions and replace people, I just don't see it being like a technology that's just like not allow that just stays in a private company's hands. Like I think the >> they just kind of go in and >> in the defense company example, it's it's >> the in the US's case like the US military is the one going to war, right? It's not as if like >> Andreal, for example, can use that artillery at their own will, you know, or go like declare war. Like that's not developed on behalf of the US government.

>> Yeah, it's an interesting question. I don't know. I I >> I don't know how to think about it. I don't know how to underwrite it. I just see it as like actually not that low of a probability if what all they're saying is actually true. Like all the hype is true, which I also have no way of underwriting. >> Yeah. I haven't thought about how that would go down. Alex was talking about this on CNBC recently. >> Bill. >> Yeah. >> Yeah. >> That's why I think an investment probably not out of the question. Um >> it's already been happening. They've definitely been having the discussions. >> Yeah. Awesome. >> Would you find that like I guess would you find that bullish if that happened or bearish?

>> Bullish. I think markets pump on that. >> It's nationalization is a weird one. It depends like >> Well, that's what is but is it is it like a binary thing where like all right, we run this whole thing or is it we invest in it and now we have skin in the game to the degree that we don't want it to fail because the latter is bullish. Yeah. >> Well, the buy the whole thing is also like do you buy it at the market price or do you do like a nationalization like when the European government basically to operate you have to give us 10% or whatever it is. >> Well, yeah, >> that that no as long as there's a capital infusion.

>> Yeah, but I mean there could be the there could be a capital infusion where but they just they just nationalize it for zero and then inject like trillion dollars into into it building up. >> What do you mean nationalize it for zero? Well, that's what happened in Portugal in the revolution. Like all our industry got like nationalized, but no one got paid. Like none of the people who own them got paid. >> Just Yeah, it literally just snack for like fores. [laughter] That's like the binary side. I'm talking about they're just coming in as an investor. Same way they've done with like Intel with warrants and all this other [ __ ] Yeah. Like there's precedent here with other public companies.

>> Yeah, that'd be smart. I think either way that would be the first step and then as it scales up and gets bigger and eventually more powerful like >> maybe maybe nationalization but I also don't think that's a I don't think that's a near-term >> the thing is whether they own a stake in it or not they're still totally dependent on the success of it like you need to bail it out regardless >> it's just yeah we or China win and so there's an incentive here to help ensure that it happens locally >> or domestically Yeah, maybe for next hive mind, I'll do a lot more research on that one. I'll come back and post a more pointed question.

>> Like that. I like that question though. I think it's a good question. >> I think Zay needs to do more research on that. >> Have better follow-ups for it, too. But, uh, I've been thinking about it more. >> Is there anything I We've talked a lot about like what we're looking at, Bullishon, etc. Is there anything that fits into maybe you consider like an anti- thesis, right? Like are there any sectors or verticals or even assets that like you guys are intentionally avoiding and have like don't want exposure to? Like good example would probably be set earlier on like the L1 trade, right?

Like just at this point not interesting. Like is there anything else that falls in that? I mean, it's like pockets. I I think definitely that and then you start doing [laughter] >> No, I was saying like like pockets of stuff that's just going to get absolutely nuked by coming tech like telecoms I don't want to ever own with with uh Starlink, you know, going into that world. And then there's just yeah, these elements of of stuff that will be completely kind of out competed. Um, >> yeah. I I don't really want to own anything that doesn't have a AI tailwind or is like a hedge asset, you know, like defense and gold and crypto. I would I don't really want to own like anything

that isn't that like, >> you know, something that isn't really directly benefiting from AI. >> These value play on a discount jewelry or like all this stuff. >> Almost everything benefits from it at this point. >> Yeah. >> It's just like to the degree that it benefits. >> Yeah. really can't go wrong owning the index, you know, >> in the world of AI. I like genuinely believe that that >> I mean the index. >> You've seen a lot of these you've seen a lot of like random a lot of random like companies you wouldn't think of that are just having banner years.

>> Insane. Yeah. >> Yeah. Multiples are coming down, right? Like prices bullish for so many. Yeah, >> like that's that's why it's hard to see a really big I mean obviously you get the really bad bare markets when you don't really expect it. But I mean you're seeing the product like the earnings and the margins of like every sector pretty much just get stronger and stronger and it's like you know it's very different from other bubbles in >> also with rates where they are very different. It's just like before, oh [ __ ] bare market, we're at zero. Like, where do we go from here? Rates up here, there's so much.

>> The other thing, too, is like >> if if things go actually that south, >> even though even like the rate hike, recent one, and if there is another one, it's not like people are expecting a new rate hiking cycle. It's like we're taking a little break. We're going to go up a bit, but then we are expecting to come back down again, right? So it's still very different from when they started doing the rate hiking cycle at the end of like 21 where it's like yeah we might have to hike rates hike hike rates for like three years right and this now is kind of like ah we got to go up a bit but we'll probably hopefully come back down and again the magnitude of the difference in the rates is not nearly the same too right >> I will say most longer rate hiking

cycles have started that way though >> where mo you didn't expect the hikes to go on for as long as they did Um, I also don't but I don't think that one rate hiking rates at 25 25 bips at this point. Like I said going into the Fed meeting, I I don't really know what that does. Like it doesn't deter if anything it actually impacts like consumers and people that like are on consumer credit a lot more than nobody stopping an AI debt build out on 25 bips, right? It's it's going to be more >> that's all long end anyways. Long end of the curve stuff.

>> Yeah. I I was avoid I mean in the private markets I'm avoiding the NEO the Neolabs for sure. I think it's again it's like for the L1 analogy it's like you don't want to invest in I think the nth L1 like even if there's like and it's all it's it's literally the same thing. There's like a marginal thing they're working on continuous learning or they're working on whatever and you're basically betting on an acquisition at the prices that you're paying for these things because the the revenue traction to get there is like huge. Um because you these things are doing like seeds at multi-billion dollar valuations. Some of them like the ineffables of the world.

Pretty bearish on that entire category. I think going through crypto is useful in some of this stuff. >> I agree. >> Um also cuz it's like the same as crypto, right? Where you're like Salana is going up a lot. So it's like this is faster and like the TAM is 300 billion or whatever, but then by the time you launch Salana is not at 300 billion anymore and like no one cares about your your thing, right? So pretty bearish on that category. I'm kind of bearish on a bunch of the robotics things like a lot of the I think >> I think it's a bit ahead of itself in terms of the actual traction. >> I take the other side of that.

>> Yeah. >> Um I think actually you'll have a pretty solid repricing in in certain robotic sectors next year because they I don't think many of them have repriced like a figure. >> Which ones specifically are you thinking >> on the humanoid side? I mean I'm personally most bullishronic on all of them at at current vows. Um, I think you you'll start to see some factory deployment in a productive way next year, probably end of next year. And that will actually start to get the moon math going on a lot of this stuff.

And and that I think that like the the productivity growth from from robotics isn't priced into any of this either. And that could be the next kind of catalyst for for just domestic production. >> I just don't think they're going to make that big. I don't think you need that many human I don't think humanoids make that much of a difference to like factory productivity basically. I think most of it's already been pretty automated by like deterministic robots. But anyway, it's uh I think the big thing for robot humanoids is just like all the hotels like all the maids and cleaners they have and like all this kind of stuff, right? Like >> I forget who said it and it was like a year or two ago, but it's like imagine just everything is just always so clean, right? because you just have all these

humanoids constantly just like maintaining everything. U which people don't totally think about. I think when they think about humanoids, they mostly think about like the factory worker and sometimes like a home, >> you know. >> It's crazy cuz I don't think home fac I don't think home robots are coming for a long too too varied of an environment. >> Also, you definitely don't want to be the first person to have a home like you're definitely >> not around their kid. We were having this conversation at dinner yesterday. I was like, who wants a humanoid around their newborn kid? Nobody. Nobody. I mean, have you seen Have you seen that movie Megan Fox is the human eye? >> Oh.

>> Oh, I thought you say I'm robot. But yeah [laughter] >> I wouldn't be putting her though. >> Regardless. >> Yeah, >> even if she was making fun. >> I think I think um like stuff you want to avoid. Like I don't have good takes on stuff outside of crypto. I think within crypto, we've already talked Yeah. the L1 tokens is is kind of tough, but I also think like most DeFi stuff too. Um, I think there's like a short list of DeFi stuff you can get interested in, but it really feels like you have your core, like at this point, I think it's pretty clear to say the two core coins of this cycle are like hype and Zcash, and then that's like store value and per, right? Um, and there's then all these speculative like launch

pads and like other kind of things going on in like Robin Hood and Salana. And that just feels like a much cleaner barbell to me. Like that's kind of how I'm positioned, right, is owning Zcash and Hype and then all these like different onchain kind of like experiments and fun little games and cuz everything else just kind of feels like a bit of no man's land. And it's not to say that they're going to do poorly. Um, and I still think there's a scenario where with Salana, like they could actually hit some crazy add like real revenue numbers in like 5 years from now or something, but it's just you're paying like what 60 billion for it right now. And so you're already paying a big multiple on it actually achieving that, right? So I still think you can be very

select and you should be very selective in crypto. Um, and I think you'll have like you'll definitely have a period where like Ethan Soul maybe everyone's convinced they're going to start going on like this massive tear and then they'll pump like 15% and then that's it, right? And I don't know. It's interesting on the DeFi point because with everything we've talked about with like tokenization, RWAS and like in some ways if you rewind five or six years ago or eight years ago when we got we first got into this and you fast forward to today like a lot of the things we talked about like institutions are coming and you're going to have basically every asset's going to be tokenized or like is going to come on chain. You would think that that would

be actually a really ripe time for like DeFi. Yeah, it just depends. >> How much are you bearish on then? I guess like is it the like the uni stuff? >> Yeah, like I'm talking about legacy DeFi really like um like DeFi that is trades at billions of dollars of market cap. >> I don't know. I think if RWA stuff keeps coming on chain, it's a pretty good tailwind for it. >> Plus the regulatory environment getting a bit friendlier. >> Yeah. I just feel like I'd rather keep my speculative cap speculative capital looking for like the new kind of stuff on chain.

with those other core bags. >> There's only so much that you can that that can absorb though. >> Yeah. No, for sure. Um I don't know. I haven't owned a DeFi token in so long. >> Is Athena a DeFi token? >> I guess I technically own that. Yes. [laughter] >> I stand corrected. >> You never own Hype? >> I own Hype, but I don't I don't know. When did that happen? >> I bought a bunch of Hype. >> When? uh like a week or two ago. >> Okay. [laughter] >> 80 bucks.

>> Everyone's like 80ucks. >> No, I had some good onchain trades and then I was like, "Okay, I might as well just take a bunch of profit in this and like buy a real core." Cuz I've always been like I've always been like, "Oh, I could buy a little hype here and buy a little hype here." But then it was never like a position that was big enough that I liked >> and I just like kept like kind of holding off it and then it kept just doing well. So you don't call hype DeFi? >> No, not really. >> I guess it's like what Uni A is the only like what what is DeFi for you then? >> Uni all like the the basically DeFi protocols on general purpose chains.

Basically D5 protocols on general purpose chains >> uni a morph a morphold like all the things on Salana. Um I know a lot of people are like bullish on Camino. I mean maybe it is like it is crushing the Salana market. So if there is a DeFi token on Solanda as well, probably Camino would be the good bet. Um, but still I don't know. It's like it's just hard for me to get excited about those token. >> Yeah, >> even Arrow with your show kind of a >> Yeah, I think it's just going to gain a lot of TVL going multi-chain.

>> Sometimes the boring stuff does well. Like that's the other thing too, right? Like >> some pretty good amount. 75% off the the the September or the August lows. >> But yeah, I don't know. Is it like are the options tokens, right, going to be the fun DeFi thing that people are going to speculate on, right? >> Cuz you just look at the TAM and then it becomes Yeah. It's like even if they achieve 10% of what >> Yeah. You thought the Zcash moon math was good, >> right? >> Wait till you see the options moon math. >> The Z the Zcash moon math has like no Man, there's people that >> there's no ceiling. Is that what >> I was talking I was talking to I mean I was talking >> I don't know I was talking to a private gold private talking to Luke yesterday

and he was genuinely convinced that he's like I don't know man it could flip Bitcoin like >> yeah we saw him outside I was like wowed chill from Luke honestly I need more of that energy >> Luke Saunders >> yeah I mean cuz Zcash >> made Shane sell all his back [laughter] >> the thing is the Zcash team is like really smart team right um and that is bullish. But yeah, >> wait, what happened? >> Solo is Bitcoin for Zash. >> Wait, today? >> Yeah. >> Amazing. Cuz he's getting shown by Luke. >> Yes.

>> I hope for his sake he goes to 10. >> Hope I hope for all of our sakes. >> Yeah. He was in pure alpha during the bare market. So he got torched [laughter] following like all the random meme coins and [ __ ] that were put in there. He's like, >> "Dude, it all went to zero." >> Yeah. It's pure alpha right now for reference. We have an internal work chat called pure alpha. >> Yeah, >> it was not pure alpha during the bear market. >> Yeah, he got kicked like just as the bull started. [laughter] >> It's like brutal. >> Thank you for your donation. >> He was kind of happy to get kicked. He was like, "Fuck it."

>> Yeah. [laughter] >> Cost me some money, lad. I think a good place to to end is is there anything like what is the what is the biggest question mark you guys have right now? Like is there anything that I mean if you had a crystal ball and you could get an answer to like would help would help your thesis trend whatever it is like is there a big outstanding question mark that you have now that can be going into the end of the year that could be something for next year but like I'm always curious just to hear like what is what if you were to be kept up at night what is that thing >> for me the the most the important we talked about is the Frontier Labs >> that that is everything

>> that every single asset in the world basically. Um, and then if it's within crypto, like I'm still really curious to see how like the SEC and CFTC how this goes now that like Clarity's gone and SEC's talked about bringing like ICOs back and stuff and are we going to get a big ICO cycle again, right? It's possible. That's something that was like unthinkable a few years ago, right? And like what would that look like and who's going to be what kind of projects are raising and all that, right? Um, and then again, like how does Hyperlid really get entrenched in um the US and you're seeing like Kraken come in there. Um, >> yeah, he just kind of stole my thing.

>> So, but what keeps me but but those things don't keep like the C like those things the crypto things don't keep me up. >> The thing that would keep me up is Yeah. Frontier [laughter] >> dates. Yeah, that's been Yeah, that's been keeping me up [laughter] >> in way. Sorry. >> It's tough. It's tough for a >> We'll keep that in. [laughter] >> Um >> but yeah, >> I mean the hyperlquid thing does kind of keep me up. It's a huge It is my portfolio at this point. So I'm just keenly watching everything that comes out like, okay, is the thesis validated like completely played out? I don't think it has, which is why I'm

still holding. But >> I mean like a big exploit of something like Hyperlid is something I would like. Yeah. But I feel like the the thing is it's they've derisked >> it's been derisked a decent amount with like circle coming on board and the bridge not being as like you know as uh integral as it was in the past right so and the whole industry I think >> uh a lot of the industries behind it too now right where there was a period of time where hyperlid >> it was kind of hated >> had a lot of money in it but it was still very hated and if that bridge got like exploited most people would be like [ __ ] it like yeah it's it's toast right but >> that wouldn't totally happen and um any and this is like any it's but that's

not just a hyperlquid specific thing too. it's any kind of like catastrophic bug in any blockchain, right? We talk about the Zcash bug. Every single these are still very complex systems that can have zero days that can essentially like nuke the entire system, right? Um and even some like a catastrophic bug in Salon, it would still affect the entire crypto market, right? Or in Ethereum or you know there's like a handful of protocols where it would, right? So those are always sketchy. And then again like ledger a critical ledger bug would take down the industry, right? That's like kind of the biggest thing out there where it's like if ledger was ever exploited.

>> Do people still use ledger though? I feel like everyone's >> tons of money is secured. Tons of money has been kidnapped at this point. [laughter] >> I mean, but but just think but think about the cold card thing. Think about the cold card thing and now it's on the scale of ledger, right? Yeah, >> ledger is what like the value that is stored on ledgers is probably at least like 10,000x what was stored on cold cards right? >> Like that would just be totally catastrophic. >> Um what for me I guess in crypto is and I'm I'm still very bullish here is that this is just like one big short squeeze momentum thing and like this is just yeah really big bounce and and it just we kind of melt back down. Um, there's a lot of reasons why I don't

think it'll happen, but there's like if if you told me it happened, I'd be like, I Yeah, maybe [laughter] >> it would be obvious in hindsight. >> Very obvious. Like, god damn it. >> There's no new use case. There's no like reason right? >> Maybe the bag in the bag. [laughter] >> It pays you in stocks. >> You tell me. I hold shitcoin, I get goodcoin. [laughter] If you just upload your receipts, you get stock tokens. I don't know what the complication is. >> Go to the store and take a photo. >> Yeah.

>> You like as as stocks go up, it's going to drag the meme coins out. [laughter] >> They're compared to the stock. You don't get it. >> It's called an AMM. >> We're going to get a board seat. [laughter] >> Yeah. >> We're going to take over the company. >> I had as one of these as one of these potential questions 12 months from now. Do you think actually a meme stock accumulates enough stocks? I think one will actually think one will of like a small like you're some of these some of these stocks that they're putting like Salana put 1800 flowers on chain like I don't know what the market cap of that is but it's probably pretty low.

>> Then you just turn it into a DAT for the memecoin. [laughter] >> That's that's inception right there. >> That is the innovation we want to see in crypto. democratize access. >> I think the most important is is the aggregate spend on tokens. It's like if you had one crystal bowl, if you had like the truth social pipe to that, you know, rather than like [laughter] Trump's Trump's like dumbass post, you had like a a truth social pipe to that, that'd be pretty awesome. But other than that, maybe just like the war like this Russia >> doing stuff with I bet it's probably nothing burger, but if it wasn't, it would be bad.

I'll keep fing geopolitics and eventually I'll be wrong, but I will continue fading it. Hopefully you make enough by then. >> I do think if if it did break out like we would say that World War II had started like a few years ago, you know, if cuz there's like enough fronts of in hindsight. Yeah. You'd be like, "Oh, it started, you know, here." Because there's been like, >> you know, >> it's why it's so hard when you read history books, right? Exactly. There's like, "Oh, it started on this day." But like if you actually were alive, >> you would not think it started like like Yeah. Exactly. I don't know. There were some pretty >> blatant starts. Like sure, you could say there was like a buildup and and and Germany was not being honest about how much artillery they were manufacturing and all this stuff, but like when the

war started, it was pretty clear like blitz graitive crush. Yeah. >> Yeah. >> But like >> I don't know though, even still like Hitler was kind of going into different regions and kept pushing the boundaries and people kind of were just letting him for a while, right? >> A good like year or two. Yeah, like contain they're German. They want to be German. It's like the whole It's the Putin thing, too. >> Yeah, but that was >> all right. >> They're just in no position to do. >> For some reason, nukes started flying and it was World War II and we didn't go to zero and everybody lived somehow and we wrote books. Like, yeah, it would probably be like nuclear war.

>> It started before >> this, like before now. Like it would that's when it was >> a long if statement right there. >> Yeah. I don't know. It's just like >> would hype still be at 90? You know what would do well is my meme coin paired with uranium. That's what would do well. >> You're adding cigarette coins on hype [laughter] cigarettes on >> artillery on on hype. >> I got my macro hedges and uranium. >> Yeah, this is great. >> Yeah, before we dive into a long form history lesson. I think that's a that's a good place to end it. I love doing this in person. We hopefully can do more of them. Appreciate everyone who uh stuck around and we'll be back in our normal schedule. [music]