Is the Cycle Over, Portfolio Psychology, & Prediction Market Alpha

Transcript

thing. Trump is like 100% tariffs on China. And the market like sells off a little bit less the second time. Like sell all the optionality you can, which basically means buy Bitcoin when it when it pukes because of something that's obviously not going to result in the end of like global commerce, you know? >> Yeah. >> It feels like a screaming fade. And the only thing that you'd have to believe in order for it not to be is that we're in a four-year cycle because it's happened three times. It's forever now. And uh Okay. So, it's about four years. So, let me interpret anything. >> That's the right thing. Every single sign is bullish right now. >> Yeah, >> except that we're on year four of what is a fouryear cycle.

>> This episode is brought to you by Block Damon. You'll hear more about them later in today's episode. Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is forformational purposes only and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Block Works team may hold positions in the companies, funds, or projects discussed. All right, guys. It's good to have you.

Welcome back to another ThousandX alongside Jonah, but also special guest, my boss. >> Let's go. >> Jason Yanowitz. Daddy, >> welcome. Welcome to the podcast. Let's not Let's cut that part out. Jonah. >> Jonah, you're not allowed to call me daddy at 1 p.m. That's later. Later. Yes. >> I I I might never do that, but you know, I'll leave that to Jonah. Um >> Jonah, so we were before we hit record, Jonah's like, "Yeah, I got to get you on the pod. You got Riz." >> Only Jonah. Only compared to Jonah do I have RZ.

>> Compared to no one else at Block Works do I have RZ, but >> Jonah, you just you going to take that lying down? I that's what I've been doing lately is taking things lying down. And as the boomer on the podcast, um I'm trying to use words like RZ. And I sound like the uncle in the room, don't I? RZ. >> No, no, that's how you know cuz I actually don't say uncle, I say. Now, we we had a we had a we had a guy I was going to call him kid, but I feel like you're not allowed to call people kid. Um but you know, we had a mature adult here and he was 22 and he would or maybe 23 and he'd always be like, "Yo, Jana, he like you got movement, man. You got you got movement. I'd be like, I don't I

don't know what to do right now. I'm just gonna keep walking past you. >> Like, do I do I keep moving? >> Do I say thank you? Do I say like, get back to work? Like, >> yes, I got movement. >> Got movement. >> He just chose to ignore it. >> And he's not he's not referring to dance moves. >> Blew past blew past that. No, he's not. >> Wow. >> Well, you know what else has got movement? The crypto markets this morning. >> Great transition. >> Yeah, I I I tried. I'm practicing that one. >> But it's it's amazing. And we brought we brought you on here because you have uh I think I think you always have an an interesting angle and good and good questions, but basically the trade of the last three weeks has started to unwind. Gold's down 5%, Bitcoin's up.

Kind of crazy. >> Yeah. I mean, can we start there? Like this is actually the most confused I've seen market participants in in in many years in crypto. like the least consensus just you know in in the group chats which I'm sure you guys are in a lot of these things it's like I feel like a lot of the markets the last couple years have moved on these big consensus trades like okay >> not hot enough too hot and it was not saying markets are ever easy but like there have been some easy thing this feels tough right now like this feels yeah I I would say at least the market participants that I talk to on a daily basis are I think when you see people like Chris Berniski or these like big, you know, quote unquote big names in the

industry, Ciao and Berniski talking about the cycle being over, you can't help but get a little bit spooked. And so I'd love I'd love to maybe just hear your guys' take on just where how you're thinking about right now with like the big overarching topic I think on people's minds is is is the cycle over. I'll start uh by saying I really respect Chris Berniski. I think he's one of the greatest investors in crypto. He's a phenomenal fundamental investor. I think people are overindexing a lot on the cycle. >> When I think back to 2018, uh it was very different. Obviously, the the composition of market participants were very different. 99% of people in 2018 when the market cycle ended knew

what a four-year cycle was, right? It was technically only the the second coming, but people were talking about the having cycle that that became it was very cemented in people's minds. Everyone that owned Bitcoin knew about this. >> You remember the having watch parties? I remember being posted up like po poker games, like late night streams. >> Yeah. >> And then 2021 comes around and everyone's like, "Okay, it's happened twice. It's definitely going to happen a third time." And in 20 and in 2021, I think a lot of people still probably 80% maybe 85% of people that owned crypto knew and subscribed to the four-year cycle theory. They knew about the having argument. They knew about all this and so it became a self-fulfilling prophecy.

>> Now, four years later, it's happened three times in a row, which obviously is a data point that we need to look at. But I don't think the average holder of Bitcoin or crypto maybe of Bitcoin. People that own crypto probably do, but Bitcoin specifically, they don't know about the four. They don't care about the four cycle. >> They didn't invest because of the >> My uncle who bought the Black Rockck ETF is not doesn't know about a four-year cycle. He doesn't even know what the having is. >> Yeah. He doesn't even know that there's 21 million coins. He he he bought Bitcoin because people are like, "Oh, Bitcoin is a great it's a it's a comp to gold and it's going to go up and it's a inflation hedge and all."

>> Yeah. There there all these other reasons. I mean, >> basically what I'm trying to say is I think the four-year cycle is giving us an amazing opportunity to get in the market. >> So here here here would be the counter is that there are far bigger sellers than there are buyers, right? So the big sellers right now are OG whales. Yeah. who are um again going back to the group chats. I think you can learn a lot in these group chats. There are guys from 2013, 2014 who are now selling for the first time. They're selling because ETH hits 4K. They're selling because Bitcoin hits 120. And there's just these big sell orders at some of these all-time high numbers. And I think that's why like like I've never seen Bitcoin's price action do what it's doing now. It it can't break. It's really struggling

to break past the all-time high. And I've never really seen that. >> Yeah, it's weird. It actually it violates one of my core principles which is that when you lose momentum, you should probably get out of get out of Bitcoin, >> right? >> Like my my entire framework was built on this value versus momentum theory where you buy Bitcoin when people view it as a at a bargain price or you buy it when it's ripping. And right now we're going sideways. But I do still think that I'm I'm violating this based on my understanding of what's going on, which is that there are large OGs exiting, but the market is absorbing their cells.

>> Okay. >> And we're not breaking down lower. We're managing to trade sideways. And I think we've traded sideways >> for a long enough time that we're not selling to actually be bullish. Me, too. I mean, I think, you know, you said that there are bigger sell orders than there are buy orders. Um I think the price action might you know respectfully I think the price action suggests otherwise because we are stabilized in in a range so somebody's buying it and I think you know you have OGs who are selling there are new whales who are buying your uncle is part of the big whale called IBIT that's buying there's tradfi buying there's you know the whatever the 30 to50 trillion wealth transfer from boomers who are dying to millennials and Gen Z who are inheriting that money you have a no coiner

generation passing money to a very Bitcoin generation, crypto, they're buying gradually. And then you have institutions as well. Like let's not forget that crypto was illegal 6 months ago. Um, and now it's legal. So the rails are all there. You know, I was telling you before the podcast my my sort of thesis that crypto has already disrupted tradi back office and payment rails and the movement of value. Like Abby and I talk about this on the pod all the time. Like if you want to move dollars from me to to you, I can zel you. That's easy. That's been solved.

But if I want to move dollars to Somalia or if I want to move a share of like the S&P 500 ETF from me to you, that's like bizarrely difficult, cartoonishly difficult. Um, but like with crypto, it's instantaneous and easy to move like non-pegged non-stable value around. So like this this stuff is already disrupted Swift. It's already disrupted back office. It just hasn't been allowed to proliferate. >> Did you see Ripple's recent acquisition? >> Yes. This went really under the radar. It they they bought a company called G Treasury. >> Oh, okay. >> Yeah. They bought a company called G Treasury, >> billion dollar acquisition. G Treasury has been around for 45 years. It is a old school out of Chicago treasury management uh and FX management solution for Fortune 500s, Toyota, Subway.

>> That's kind of smart. Ripple's doing amazing things with their acquisition. >> Yeah. So, I mean, I've been I've been saying this for a I think Ripple's going to buy their way into a real business here. And if you look at what they've done, Hidden Road acquisition, what is Hidden Road so good at? They're a Tradfi, they can cross over between Tradfy and crypto. Um, and if you look at like you mentioned sending money to Somalia. >> Yeah. >> I don't know how many times you're sending money to Somalia. Probably not that >> often. Hopefully never what the next big thing in stable coins is going to be B2B.

It's not it's not you sending money to Somalia candidly. It's, you know, Toyota sending money to their supplier in China, right? And that's all going to happen with stable coins. And I think Ripple's going to try to win this game. So anyways, not not a conversation about Ripple, but it's a conversation about like, yeah, the adoption is really unprecedented right across 30 plus networks and 180 endpoints. Block Damon earnst stack unites staking and defy into a single institutional toolkit for crypto rewards with multi-layered security, full asset control and 247 support. Block Damon Earnstack is built for scale and regulatory clarity. Non-custodial staking and seamless DeFi access allin

one stack. Direct access to DeFi with no intermediate smart contract or vaults. To book a demo, make sure to click the link in the show notes or head over to BlockDamon Earnstack to find out more. Thanks to BlockDamon for making today's episode possible. Shout out to today's sponsor, Katana. Katana is a DeFi first chain built for deep liquidity and high yield. No empty emissions, just real yield and sequencer fees routed back to DeFi users. Incubated by Polygon Labs and GSR, Katana is launching with notable ecosystem of primitives, assets, and partners like Morpho, Chain Link, and more. Katana's 1 billion CAT campaign is live. Bridge and deposit directly into vaults in one simple click

and start earning immediately on your Ether, Bitcoin, USDC, and more. Follow the link in today's show notes to get started. As always, investments in blockchain technology involve risk, terms, and conditions apply. >> And that all of that adoption, I guess the point I was trying to make to put a bow on it is that all of that adoption results in inflows, right? Like it's all coming into crypto because it's of these rails proliferating. So there I think you can think of that as like the new whales. Tradfi and the wealth transfer is basically the new whales and also just you know your uncle buying IBIT.

The other thing is like, you know, no disrespect to Chris Berniski, I'm he's probably way better at at doing this than than I'll ever be, but like just because, you know, not talking about him, but in general, an OG, just because you were early to Bitcoin does not make you a good trader, right? It doesn't even make you a good investor. It means you had a great call on something. And so, if those OGs are selling because they're worried about a cycle ending, that doesn't mean that there's a cycle ending. it just means that they they're sitting on so much money and it no longer represents the sort of an Randian ideals that maybe they invested for back in 2011 or whatever. Um that that doesn't mean there's no opportunity or upside left in Bitcoin. So >> I'm kind of dismissing those people and their views frankly because they got in

for different So if you look at the data, >> OG's sold a ton of Bitcoin post the BCH fork in 2017 and then also all the way up through Bitcoin going from $3,000 to $10,000. OG's were offloading and offloading. >> Well, that's because half the there was the big big battle with bit like I mean half the industry was on the Bitcoin Cash side. People don't like to talk about that, but >> half It's true. half half the industry was in fact um I I I I still have my qualms over whether we made the right decision there. >> Yeah, I think many people do >> you know because I do think that there was there was some value to the idea of actually speeding up Bitcoin and uh because decentralization I think is going by the wayside right now anyway. Um a lot of conglomeration

among miners but putting that point aside also happened in 2021. OG sold on the way up like past the all-time high of 20,000 uh 30,000 40,000 50,000 you were seeing old coins from like 2011 2012 start to offload. It doesn't necessarily mean it's the top. It just means it the market needs to digest. Kind of what happened in July of 2021 after a large selloff. You go sideways at 30,000 for a while. A ton of people get out. People like Suzu get short 10,000 BTC and then and then the market rips up rips up in their face. I mean to me I just try to look at the flows where what is the largest pool of capital that's buying Bitcoin retail institutions and micro strategies of the

world are they still buying? Yes. Okay. >> Yeah. You know I'm I I'm I'm sanguin. 2021 was a bit interesting because it almost I don't know if you guys feel this but Bitcoin almost feels like mystical >> in some ways like like everything sometimes lines up so perfectly. So, for example, post having at the end of the four-year cycle, the Fed is like, "Ah, yeah, by the way, guys, inflation's real. Let's we're going to start raising Yeah. raising rates." And that happened like at the exact right time to confirm the four cycle. Yeah. >> So, there's like a little bit of mysticism there. It's like, >> you know, there was this huge exogenous shock that just so happened to confirm the four-year cycle. We don't have that.

We have the opposite happening right now. Yeah. >> So, I'm just not as worried about it. I I think this is the easy I think I take the opposite view of crypto Twitter on this. I think that this recent sell-off and stabilization or chop or whatever you want to call it is the easiest trade I've seen in crypto in a while. I don't think it's hard at all right now. And I think the reason why is um you know I have an analog from trad. So basically when I was the dollar yen trader way back in the day um dollar yen used to rip meaning that the yen would nuke whenever uh Kim Jong would send a like test a new rocket.

He'd be like, "I'm threatening Tokyo." And he'd like drop something in the sea of whatever of Korea or Japan, whatever is over there. And the yen would nuke and then it would slowly grind back up after the world realized that Kim Jong-un was not going to take out Tokyo, right? And then he'd do it again. And he'd be like, "I test bigger nuke." And the market would the market would go down less, right? And you would, you know, all the newspapers would have images of like concerned Japanese people looking at like large television screens or concerned South Koreans, but like every time the yen would move less and then after his like whatever 15th missile test, the market was basically just like unchecking nuclear war and I'll and I'll sell off

again, right? And as a yen trader, the first time I was like, oh my god, oh my god, the world's over. Like the yenv exploded. And then after every single one of those, I would just sell options and make money. and it was easy. And crypto is doing the same thing. Trump is like 100% tariffs on China. And the market like sells off a little bit less the second time. Like sell all the optionality you can, which basically means buy Bitcoin when it when it pukes because of something that's obviously not going to result in the end of like global commerce. You know, >> it feels like a screaming fade. And the only thing that you'd have to believe in order for it not to be is that we're in a four-year cycle because it's happened three times. It's forever now. And uh Okay, so it's about four years. So, let

me interpret anything. >> That's the right thing. Every single sign is bullish right now. >> Yeah. >> Except that we're on year four of what is four year cycle. And we're in Q4, which is the scary time of a four year cycle right? >> Yeah. And I I think it's by the way, it's not just >> it's not just the Berniskies of the world who I think are short. I think there's a psychology that happens with obvious when you came into crypto maybe around the same time as me like in into it in 2015 16 like really active in 2017 and then like full full-time starting 2017 I think. Um, there are a lot of people from like our class who didn't sell in 2017, then they made a bunch of money in 21, and then for the most part, they didn't sell in 21, and they wrote it all the way down.

And they're like, at this point, they're like, >> I should be worth way more. I don't know if you guys saw Kobe's recent tweets this week about like >> money and lack of money and like how I think a lot of >> I think a really old Kobe tweet from many years ago was most people overestimate or underestimate nobody actually knows how wealthy people are on crypto twitter they but they always for certain overestimate by 10x or underestimate by 10x and I think >> I think mostly overestimating >> and most and yeah I I think mostly it's overestimating like I've you know there's so many times like oh yeah that guy you know that guy That's worth be worth like 800 million.

>> Yeah, >> maybe 20 million. Doing all right, but it's not 800 million. And I think there's a lot of people right now from the, you know, our our class of 2017 who are just like, I should be worth more than, you know, $10 million at this point. And right now, they're trying to lock in some gains. >> 100%. So, it's not just the OG whales. It's like, >> yeah, just >> I I think there's a lot of PTSD, which >> I mean, thankfully, >> so not to pat myself, I'm going to pat myself on the back a little bit. I avoided a lot of that in 21. I think my my my greatest call ever that I'm most proud of is uh I pegged the change in market dynamic in 21 to the fact that there were larger people in the market.

So I didn't I I basically said before when Bitcoin was like 25 30K I was like I don't think we're going to get a blowoff top. I think it's going to be more of a rounded it's going to take a while for this thing to to actually come off. And so the moment Bitcoin lost momentum >> I got out of the market. H >> um then actually the Fed raised and I was like, "Okay, like now like I'm I'm out >> fully out." >> And so I think I I I just personally have a little bit less PTSD >> uh from from that. But I do think that there were a lot of people that got zeroed out in FTX like post. So that >> people instinctively when they make a lot of money, they actually want to sell a lot of the time. and what keeps them

in the trade is greed and okay, I don't wanna I don't want to miss out on on what's going up. But if you're like up if you're up a significant amount of money this year, you're and you've been through two cycles where you've already lost it all, you're scared. >> Yeah. >> You're like, "Okay, let me let me get out of this thing. Let me let me just finally not make the same mistake that I made the last two times. >> Let me lock it in." And the greed disappears because they're not making money every day. That's what happens. Bitcoin goes sideways, altcoins are going sideways. It's been effectively three months of this. You haven't made any real money in three months. You're still like kind of near the peak. Okay, let me get out. I think that's a lot of what's happening right now and why we're

not going higher. But I think that once they're out. >> Yeah. You know, crypto is such a tough space because you're making a venture bet on the next decade in a in a liquid asset class. Yeah. It's so hard. Like >> um Okay, even even let's remove Bitcoin. It's um like Robin Hood. Tell me tell me what to do with my Robin Hood position, right? because I'm up, you know, bought bought a bunch of Robin Hood, like that was that's my best investment of the last year. Bought a bunch of Robin Hood like somewhere between 20 to 30 bucks. Now it's at 135. >> I got a take on this. >> I both think that that you should take profit when you're up like 6x and Robin Hood is a generational financial brand that and you guys might disagree with me on this, but I think Robin Hood will be

along with Coinbase one of the largest finance companies in the world. One day it'll overtake Goldman, JP Morgan, all these brands. I 100% agree. So I think so on the short-term side like oh you should probably take profits like maybe market's feeling frothy AI deals yada yada Bitcoin you know whatever market froth but on the other side I'm like if I like I I have the mental fortitude I think to stomach a 50% draw down if that were to happen why don't you just keep holding never sell your Robin Hood and just ride ride it up and if it goes down you just buy some more. >> So here's what you should do with your Robin Hood you should sell a little bit sell 10% and see how you feel. give it a week. And basically like the reason why I think Robin Hood is going to continue

to rip just gas higher over the years with volatility, right? Like in bull markets you get crazy draw downs. Um is >> it speaks to a broader theme of crypto being hard to trade, which you just touched upon. Why is crypto hard to trade? Because the market has changed, right? The the strategy that I'm going to tie this back into Robin Hood. The strategy that used to work for making money in crypto was like be long some Bitcoin and then buy hyped shitcoins on rallies because they rally more as the the momentum and the narrative proliferates right that doesn't work anymore and there's a new you know the paradigm has shifted in gold the paradigm has shifted in crypto I think we're in a 25-year grind higher for crypto and so instead of buying hyped

shitcoins that doesn't work anymore buy picks and shovels assets like Robin Hood that collect fees on people you fooling around in crypto. And I agree with you that it's a generational financial brand. And it's it speaks also to the wealth transfer that we touched upon earlier in the podcast. Like Gen Z is not trading, you know, by calling up their broker at Schwab. They're uh they're trading on Robin Hood, right? So Robin Hood's just going to continue to accumulate mass both from crypto and from trad, you know, unified plumbing. So, I think like the medium to long-term story for Robin Hood is so bullish that you have to hang on to most of your stuff, but like whenever you feel like you've just

made a huge profit, >> you should you should peel a little bit off and then see how it sits in your gut. And if you're like, "Ah, that felt great." Then you do more. And if it if it feels if you feel like stupid or FOMO, then just stop and don't touch it. >> I think that's a good take. I think one of the best, you know, like a lot of people lost a lot of money in this recent liquidation um >> flash crash or whatever we're we're calling that day. It's like, you know, what 10 or 15 or 20 billion of liquidations, whatever the real amount was. It was a lot. Um the the most helpful thing that it did for me was it it it's a forcing function to look at your portfolio and be like, am I happy holding these coins or these stocks? If

everything went down 70%, would I be like, you know what, I'm I'm good. I can I can hold one day this stock will go up and I had some coins and stocks where I was like oh man dump absolutely not short-term trade I was trying to catch a momentum thing and then other things where it was like yeah you know what if Robin Hood or Coinbase went down 70% I'm buying more. >> Yeah. >> So yeah I think that's good good lesson. >> Yeah. I mean apart apart from big macro shifts I think it's just a fool's errand to try to trade those types of positions where you had large conviction >> outside of something okay you know Trump might you know in April for example people got nervous about tariffs maybe maybe you want to make a trade around

that maybe you want to okay let me let me try to protect some positioning buy in because I think there's a short-term inefficient >> draw down and even then you pro you probably get one of like you get one or two of those trades a year most of the time when you're in these position positions. You just kind of have to sit and I'm I'm I'm a a huge fan of Robin Hood. It's my third largest position. >> Wow. Uh in my uh >> Can you share that publicly? >> Yeah. Yeah. I mean, I'm I'm happy to. My My first largest position is just NASDAQ. I'm I'm talking specifically equities. >> Yeah. Yeah. >> Uh my second largest position was uh s silver miners and gold miners, which I actually just sold out of >> uh literally this morning >> class. So now I guess my Robin Hood's my

second largest position. M >> um well no not not Golf Clap guys sold out when they were down I I sold off 3% off the highs or 5% off the highs right now. >> But for something like gold and for something like uh the gold miners and silver miners which are actually down more than I think they're down like 7% today or something like that but it was >> unbelievable run. I mean they basically doubled over the last three. >> Why did you buy those instead of just gold? >> Uh so trade two two reasons. Uh, one, it's like it's crazy leverage actually on the on the positions and it's non-liquidatable leverage. Two, if gold goes sideways, they do better because they have cash flows,

>> right? So, gold gold can go sideways or slightly up and then they can be up 13 14%. >> And so, >> it's actually very it's like >> basically the reason to not buy them is because they go down way more when gold collapses. Yeah. But I was buying gold during a consolidation phase. I wasn't necessarily nervous about gold. Like I bought gold when it was in that triangle of 3,00 to 3,300. That's I was that's when I was talking about it. So I wasn't necessarily concerned about a total collapse. So that's why I bought miners instead of buying out.

>> And I was, you know, uh, with most of most of my positions, I mean, my portfolio basically looks like NASDAQ, I own Tesla, I own Robin Hood. >> Yeah. >> Um, I own R I own a bunch of rare earth mineral companies. uh like I'm just holding on to these things. I'm not >> You have to and that's what that's what's the beauty of crypto trading is that it gives you a mindset of thinking big over the long term. And there's this huge ARB in publicly traded equities like Robin Hood and sometimes in commodities like gold where even the most euphoric industry analyst like equity industry analyst who works at like City Bank, right? They're not incentivized to make bold calls. They get fired for those. But if they just are in line with or maybe on the upper end of the band of the other estimate

analyst estimates, they keep their job no matter what. These are very riskaverse people. So the industry anchors itself to industry analyst estimates >> and you as a retail trader who's familiar with crypto mooning over the years, you can have a you can have a medium to a long-term bull thesis on something like Robin Hood that is just reasonable but still way above the incentive structure of the equity analysis industry. And that's your edge, right? You can be like Robin Hood is an amazing brand. It's going to 10x over the next 10 years. The people that that study Robin Hood can't even freaking comprehens

half the time. So like that's your ARB. >> And the the other beauty is like and this is for any in inexperienced trader out there. It's very tempting to like buy when the thing's up and sell when the thing's down and just get, you know, finicky and panicky about that. But like if you have a long-term thesis about something, you can cling to that when you're having a draw down. It's an object objective framework that can help you retain confidence when the market's, you know, serving you. So, you know, one thing about that, just a piece of trading psychology that I've personally worked on that I find very funny looking back at myself and like I can't believe I acted like this cuz it was completely irrational. Basically, when things are up, your brain naturally sees green and gets filled with dopamine and you feel

safe. >> Yeah. And when things are down, your brain's dopamine goes away and you get this fear and you things feel very unsafe. But the reality could not be further from the truth. It's actually much safer to buy most things when they're down versus buying them when they're up. Like just generally if you're if you're fundamentally investing, it's actually safer. And so what you need to do is you need to get addicted to buying like you you need your dopamine to be produced when you buy when something is going against you. Like that's actually like crazy. >> You you you need to train yourself. I call it the it's the castanza rule, >> right? You do the exact opposite of what your body naturally does. And guess what? You become and and the people that

trade the best just look at things super analytically, right? No emotion involved with any with any sort of trading. You go, "Okay, I like this thing. It's cheaper today. I'm gonna buy it." >> Yeah. >> That's how you have to think about it. That's how I felt about Bitcoin on the sell-off is I like this thing. Nothing has changed. Yes, there was a liquidation run, but nothing on my 3, 6, 12, or 18month outlook has changed. So, I like it better now. This is better. >> It's not worse to buy to buy it at 109 than to buy it at 114, you know, buy it at 125. I still fall prey to this, by the way, sometimes, you know, like not everybody. So I'm I'm as guilty as an expert and if still every now and then trying to buy the breakout and then get

into face but like you know you got to train your psychology here so hard >> across 30 plus networks and 180 end points. Block Damon earn stack unites staking and defy into a single institutional toolkit for crypto rewards with multi-layered security full asset control and 247 support. Block Damon Earnstack is built for scale and regulatory clarity. Non-custodial staking and seamless DeFi access allin one stack. Direct access to DeFi with no intermediate smart contract or vaults.

To book a demo, make sure to click the link in the show notes or head over to Block Damon Earnstack to find out more. Thanks to Block Damon for making today's episode possible. Shout out to today's sponsor, Katana. Katana is a DeFi first chain built for deep liquidity and high yield. No empty emissions, just real yield and sequencer fees routed back to DeFi users. Incubated by Polygon Labs and GSR, Katana is launching with notable ecosystem of primitives, assets, and partners like Morpho, Chain Link, and more. Katana's 1 billion CAT campaign is live. Bridge and deposit directly into vaults in one simple click and start earning immediately on your Ether, Bitcoin, USDC, and more. Follow

the link in today's show notes to get started. As always, investments in blockchain technology involve risk terms and conditions apply. >> Jonah, do you own anything outside of Bitcoin? >> Yes. >> Like cryptocoin? Crypto? >> Yeah. Yeah, I own um Aerodrome and Hyperlquid right now. >> Um I ju I just rebought Hyperlid around 35 on this crash cuz >> it it was like the Kim Jong-un nuke story. I saw the market nuke for technical reasons, not fundamental reasons. I'm like, "Okay, this is my chance. I sold Hyperlid at 45. I feel naked. Uh, I feel short. I feel awful.

When can I get back to gut feel? Listen to the gut feel." Yeah. Yeah. >> Yeah. Yeah. So, like I just felt >> Yeah. dumb for having sold it all. I I was like kicking myself when it traded up to 58. And then when it traded down to 35, I'm like, "All right, this is my chance. Probably my last chance getting back in." So, I bought Hyperlid. I've been long Aerodrome for a while because I think that Aerodrome and Hyperlquid are kind of the only two defensible um products with attractive tokconomics in crypto that I can wrap my head around. Not saying the only two that exist, but like they're kind of the best two. Yeah. >> And I think every other altcoin >> for the most part is just a meme.

>> And I think the meme era is dead for reasons, you know, previously discussed. >> Yeah. A drum is great. They're just uh Aerodrome has terrum's tokconomics have no bad token performance has nothing to do with their tokconomics. It's that they get comped to unis swap which is >> uh just a t I mean that it's just a tough coin. >> Yeah, unisoft has had so many chances I think to >> do amazing things for the world of crypto valuation if they just return some capital from fees. I mean, we know we we don't and this horse has kind of been beaten to death, but that's also why I personally like my portfolio is comprised of things that make money that also return money. So, actually,

we've talked about this on previous podcasts, but I have a good position in Shuffle, which is a online casino that's actually >> they're booming. >> They're booming. >> We've been talking about this since 20 cents. >> Yeah. >> Um, it's like and it's going to keep going. I think it's what 400 $450 million valuation right now. It's going to keep going. I mean, this thing is printing money like nobody's business, and it's actually returning money to investors. I still own syrup. >> Mhm. >> So, I'm I'm ve I'm still very bullish on the institutionalization thesis, which is that you just want to buy things that institutions are involved with because >> those are the people.

>> Ale Maple. I don't own any A. I view Maple as like my >> Yeah. Yeah. Yeah. >> My my Don't bet against Sid Pal. >> Yeah. I I I agree. I really like Sid. >> Yeah. >> I I do like a A. They just think that syrup's a better riskreward and they have a similar They're going to >> Yeah. Same. Yeah. It's kind of same same. Yeah. >> Basically, you need you need good tokconomics because I I feel like such a dork saying this, but like the retail universe of shitcoin buyers is tapped out, right? So, you need somebody to buy the token. Otherwise, it's just down only when VCs sell. So, why not the token project buying the token? Like in the case of Aerodrome, Hyperlquid, and presumably this shuffle thing, like there's a buyer when when the online Dgens are either.

Yeah, exactly. Like that's what you need. There's no other reason why these coins will be capital to shareholders. >> Yeah. Or token holders, not >> Do you guys use prediction markets? >> Yeah. I've been getting a lot more active on prediction market. >> I am so addicted to these things right now. >> It's really fun and there's actually a good amount of edge. >> Yeah. Yeah. Yeah. >> Really? Did you did you Obby like is like googling something and putting into chat GBT and being like they don't line up edge or like uh no no there um if you just had taken the no on all if you bet if you bet on uh or predict or whatever you want to call it uh if you predict all of the Trump markets like will Trump say this and you would just picked no

for all of them it's an average return of I think 13% and if you just picked yes it's an average loss of 20%. And the market psychology there is if you're going to poly market to bet on a market that Trump will say something you are overindexed on him saying something. >> Wow. >> So if you just pick no I think 71% of polyarket markets resolve to no. So if you are just betting no on a lot of these markets >> the you made money. >> The the the other >> there's also so the la the last thing I'll just I I will give away free free money right now. There are markets right now where if you use chat GBT deep research or pro or whatever the the 200 a month version is called I forget and

you just plug in the market into that like it it it is it will reanalyze the odds for you and do turn on the like web search so it gets all recent information. It'll it'll reanalyze it for you. So um >> yeah like I know what I'm going to be doing this afternoon. >> No no there's there's a lot of edge. I mean again not to give away alpha but if you speak a different language there's huge edge. So I speak Hebrew and so any time anything comes like anytime there's a market on Israel >> Israel Hamas ceasefire the information will always come through Hebrew channels first >> and there are not enough people aring aring versus poly market.

>> Oh wow. >> And so for example I just like subscribe to all these like Hebrew >> telegram channels that will get me like three four minutes before >> any English channel will report on it >> which is plenty of time. uh you just look at it, you bet. Like for example, will will there be a ceasefire? Uh will will the ceasefire break trading at 80%. You buy it because you just got news that to you know something happened and >> yeah, >> you know, you don't even need to speak Hebrew. You can just Google translate that stuff. >> Well, it's it's it's Yeah, it's it's much easier if you speak a language. Fair enough.

>> Of course, cuz like cuz like new >> cuz like you don't know cuz like you get >> 50 headlines a day in these things and you like don't know. You're not hockey. You're not in like hockey. I mean, you could write a bot to do it, right? But >> yeah, it feels like I I did a lot of sports betting in college. Um lost a ton of money, but it I actually it's the same feeling. It's it's just gambling. Yeah. It's instead of I'm not buying coins that I have conviction in, I'm just gambling. But it is a lot of fun. Um but I do think unlike sports betting back then, there's there's some areas of real alpha.

>> Yeah. I mean, yeah, there's there is I think also if you're a subject matter expert, >> Yeah. you know, there's there's good alpha. And also, if you're an insider, which is kind of what these markets are built for, is to allow that information to leak in. >> Yeah. It's like that's what that's what they're good at in many ways. >> If you're sports betting, you're up against like real sophisticated sharks. >> And I guess if you're just like our >> No, a lot of c a lot of capital on sports betting is moving from DraftKings and FanDuel to Poly Market and Cali. >> No way. >> And the reason for this is uh is a tax bill actually. So in big big beautiful bill um so right now or historically you could write off 100% of your sports betting losses.

>> Oh >> and in the big beautiful bill they changed that so that you can write off 90% of your tax loss or 90% of your sports losses. So if you can write off 100% of your losses your odds are like you'll win let's say 51% of the time or excuse me you'll lose you'll win 49% of the time which is still good enough for people to the good guys to make money. But now if you can write off only 90% of your losses, your odds go from like 49.51 to like 4456. I'm making those numbers up a little bit because I don't know it exactly. >> Interesting.

>> But the tax bill made it so that it's less profitable to trade on the sports betting platform. So money is now moving into Poly Market and Cali. >> I wonder what'll happen to crypto when they institute a wash trading rule like they do in equities. uh where like right now you can tax loss harvest to till the cows come home. You can buy Bitcoin, >> sorry, sell Bitcoin at a loss and then buy fight back and you get to report a tax loss whereas in equities you have to wait 30 days or buy something, right? Um, I wonder when they close that loophole if that means that crypto will be held differently or longer or whether there'll be less volume because I bet what what definitely happens is that

there's there's always been an effect at the end of December. Always. >> Yeah. >> Where altcoins that are down a lot will go down even more. >> Like because that's what people are doing. They're they're watching it, right? So like a a large a large VC that holds coin A, they're down 30% on the position, they'll offload the position. Everyone will do that. Thing will go down like 15 20% because there's no liquidity. >> And then you buy, right? But this is what happened. Um I mean this is mostly on years what are down. But I remember this so vividly because it gave me an entry into Salana. Uh like December 30th, Salana went from 15 bucks to $9.

And it was just so clearly like probably the multicoins of the world like tax lost harvesting >> cuz it just boom like suddenly down straight line and you're like oh that's what's happening right now because because Salana blew up and people want to harvest their tax losses. I get it >> right. So I think that will change >> I guess take away one of those trades. Well, I guess until it's changed, that gives us good fodder for an altcoin short trade coming into the end of the year, doesn't it? Look at what's down. Look at the things that are down and and short them on December 30th, I guess. >> Yeah. Whiff whiff. Oh, man. I don't know if the whiff holders are smart enough to be exact.

>> All right. When the when the alt swords come in, that's when I got to jump. I got to go to a meeting. But thanks for having me on the show, though. >> Nice to see you. Great to have you for uh for hopping on the pod. >> Yeah. >> Thanks. Show us the pod. >> That was awesome. Yeah, you got it.