Hivemind: Surviving Market Chop, Is Crypto Bottoming & Reasons to Be Optimistic in 2026

Transcript

Nothing said on the hive mind is a recommendation to buy or sell securities or tokens. This podcast is strictly forformational purposes only and any views expressed by anyone on the show are solely our own opinions, not financial advice. Hello everyone, welcome to another episode of the Hivemind podcast. I am your host Cedus. I'm head of research here at Deli Digital. We've got uh Yan who is managing partner at Deli Ventures. Jason, head of markets at uh Deli Research and Flip on the Defi team

at Deli Research, also kind of like our purp uh expert. So, we're recording this 4:15 PM. We're recording this aftermarket close for like the first time I think we've ever done it, which is nice. Normally we start these podcasts and we lose a few thousand bucks on Bitcoin throughout the the first hour that 10:30 a.m. Eastern time spot. It's usually a pretty a lot of selling in that one usually. So um yeah, I mean BTC 66K ETH uh 1942 soul 81 hype 2870.

um been more the same where the last couple weeks stocks are kind of just like it's kind of just grinding or like chopping around alltime highs there. Um obviously there's a lot of these are ran rumors. I don't know how much this is weighing on everything. Uh but yeah, how are people really feeling about markets? Like from my perspective, it kind of just feels like apathy, I guess. I don't know how other people are feeling about markets right now. Uh yeah, I mean I think like the uh the oneliner for me is kind of just like I don't for like allocating to risk in general at at this point in time. I I would be like there's no real rush. Um I think

uh I'm pretty cautious, right? I think you you mentioned right crypto down bad equities you know within you know one and a half two and a half% of all-time highs and you know we're clearly seeing some losses in in momentum in tradi right like equities aren't making the the strong impulses higher they're kind of just like chopping around maybe a little bit of distribution going on you're seeing some like kind of like cracks in in certain sectors and equities obviously we're seeing software names uh trading like our altcoins and it's probably not just like, you know, it's not like a it's not just a pullback. It's more of like a reperic now that everybody's kind of realizing that software is commoditized with cloud code and everything going on there. It's

like how much are you really willing to pay if you can just recreate most of it pretty easy, quickly, and and cheaply. Um, so you're starting to see stuff going on there, right? Um, Scott Marcus and I recorded a a market matters thing earlier um as well and we were kind of talking about how Like if you look at things from like a a liquidity standpoint, like it's cautiously optimistic, but it's not like everything from like you know price of liquidity and and quantity of liquidity are really like screaming go super risk on right now. Um a lot of the proprietary like leading indicators we've built are kind of like showing like volatility is super mispriced, right? uh we're thinking it should be

trading much higher than it is probably like you know mid20s upper 20s versus you know 17 18 uh given a lot of things we're looking at um obviously you have the Iran stuff for you know the crypto Twitter just like the Twitter war experts right all of that stuff I don't know [ __ ] about it but it seems like it's accelerating and not decelerating um so you have like all of these things and it kind of like with equities trading at you know all-time highs there's not much of a buffer or you know margin of safety there. And so I'm just cautious of kind of like a V spike nuking equities a bit based on you know whatever it is. Um and then crypto kind of taking its its final leg lower. But

like again like a V spike is ultimately kind of like what I'm waiting for to um start tacking on like meaningful risk again. I'm kind of just everything I've bought pretty much except like hype at the yearly open has just like not done well and I'm just like not really in a position at this point where I'm like super super uh excited to to tack back on some risk until I see some some other things go on. >> Hey, it's kind of interesting with the Iran thing. This is probably the first of these war rumor things over the past two, three years that I feel like I'm just totally >> numb.

>> Detach numb. Yeah. Like I just I see people talking about it all the time and I'm like, "Okay, whatever." I guess like it's very hard for me to this that's what I said like the whole apathy thing. Um, I don't know. The markets in general just feel to be very slow right now. Almost like a dog days of summer feeling, but it's like, you know, mid Q1. And kind of like an interesting thing is like when you look at um like what is driving a lot of the buying um at the end of 2025 and 2026, it's a lot of it's like it's it's been mostly

like retail positioning for the most part um more so than than anything else. So like I don't know. I'm just cautious like given where equities are uh and and where crypto's trading um that you know equities could pull back 5 10% be completely fine, right? end the year higher uh and everything would be fine which is exactly kind of what happened in last year at this time. Uh whereas crypto um you know was just in a tougher spot. So like even if crypto started looking like kind of bottomy I would still be like kind of benchmarking to equities because we're clearly just not really correlated to upside right now and just strongly uh mirroring downside.

So that's kind of my take. It's like I'm cautiously optimistic for the back half of the year. You know, I still think we or the administration tries to run it hot, but like I think there's some short-term things that I'm just like not trying to buy some crypto and then wake up on the weekend if like Trump nukes Iran or something and be down 10% immediately. Um so yeah, I'm just kind of like waiting for that V spike like I was talking about. Like V's clearly inching higher. Um clearly something to me at least feels like it's on the horizon at least uh with respect to that. And I I would use that as an opportunity to to buy the things that look good to me. Whether or not that's some equity names that I didn't get exposure to last year like I should have

or uh you know a few of the the crypto names that I I like. >> Yeah. And why why do you think V hasn't spiked? I mean I think you both kind of hit it on the head and Jason with we're all kind of numb to it. Like we're we're numb to the geopolitical risk at this point. I mean, you had the NASDAQ up 80 bips today and you still had Bitcoin down almost 2%. Like, that's that's a tough pill to swallow. Like, yeah, I'm curious. Like, we still haven't seen a crazy VIX spike. Like, a few weeks ago got up to 23 intraday, but still closed around 20. So, it's like >> we're not seeing crazy moves in the VIX either.

>> Yeah. I again, I don't like again, I don't know what would cause it. Uh, it's usually what causes it is something external, right? If you look at like the just like an S&P chart over the last two years, every time you see like big VIX spikes, it's clearly like back in like 2023 was like, you know, the the banking crisis followed by, you know, liquidity issues, then yen carry trade stuff, and then, you know, uh you it's it's usually precipitated by an event of some kind. Um I don't know what that would be. I mean it could be a you know a a contagion from I don't know SAS names to other things. It could be um could be you know retail capitulation

>> on that on that topic the the SAS thing there is >> PCC correlation is uh yeah >> I think that's more coincident than anything um just I think like SAS have been some of the bigger winners as of late and drove the market and Bitcoin was just kind of an equity proxy for a while. So, I think it's more coincident, I guess. And then they just made up a decent chunk of of the index. Um, yeah. No, Bitcoin's in a in a in a in a tricky spot. It's it's getting minimal bounce on positive equity days. Um, if you kind of look historically, it's usually touched the 200 week moving

average, right? And so that's kind of um, you know, your fouryear cycle proxy to some degree. and and all that. Uh I think four week 200 week moving average at like 58. >> Yeah. >> And it roughly goes up I call it a grand a month. >> Right. So at some point the two would converge. So um but I you know it's been a very known thing historically. So to some degree when you see these things and they're and they're really known that you know there's probably some degree of front running. Um, I I do think you kind of need a a bad blow up probably. I don't like if you

look last time it really broke through was the the FTX situation, right? And so I I don't really see something like that happening here because you know Sailor's fine and and he's really like the whale that that can kind of nuke it. Although you're having a lot of these OGs cash out for green for like uh to to shift to you know for whatever reason different to get AI exposure quantum. So you know to some degree you could have a bunch of them kind of come together and uh some of the parts be a comparable selling a comparable amount of selling to some kind of an implosion. But um yeah that that seems to be a bit of a magnet I guess. um you you're definitely seeing some strength in alts when things go

well and and so you know there's there's there's this hot ball of money kind of bouncing around but with each lower high on on these alts I think um the apathy increases and and the rush to bid goes away and and that's super reflexive. Um you know historically BTC's kind of front ran pain and the bounce. So if you wanted to go glass half full, you know, you you can assume that in in a world where um things kind of dip, maybe the dip has mostly been felt here. Although I I'd be surprised just because I think, you know, selling can come into a thin order book and you can still have the price

move considerably uh if there's just not a lot of appetite to bid. But yeah, it's it's it's this kind of choppy market where if you historically in the past couple months, you've been rewarded for just playing the chop and and so that kind of will continue as a strategy until it doesn't work. So, and it becomes kind of self-reinforcing, right? People are just trained to sell these five 10% moves and and kind of wait. And so, um, that combined with not a lot of excitement to bid, I I don't know if there's any any rush, but at the same time, you know, you have these situations where it can run very aggressively in in a short amount of time because so many people are sidelined and are forced to chase. So I

think with some of these revenue generating protocols you can uh bid somewhat BTC agnostic knowing that you know the floor isn't that far away just on on these multiples like yes it can go lower but ultimately if you think those revenues will stay or increase then then it is a good entry and and realistically when it bounces you probably won't have the time unless you're sitting at your desk to get that entry, right? So, it kind of depends on how active you are and >> monitor.

>> I think there there have been a few things recently that kind of show you how quickly things can move to the upside if they actually develop like and some of these are just pure short squeezes for sure, right? But like bear chain went from like what 50 cents to a$140 and then now it's back down to like 60 cents. You've seen >> Initia had a pretty initia had a big spike. Helium's done done well over the past week. Um >> I mean that's generally what you kind of look for, right, for at least like bottoming time periods is like generally shorts start closing and you get these little short squeezes. It's not like doesn't usually, you know, it's not usually the pico bottom, but it's it's

generally a good indication that you're starting to churn through positions and you know, people who are shorting, you know, like like Yan said to uh earlier like a lot of people have been rewarded for like it's it's the same in bull markets, right? Like you you you long breakouts in bull markets and you're generally, you know, rewarded for it. Like even if you get a pullback, you're probably fine unless you're like super degenerate. Um, and it's kind of like the same in in these like bearish markets where like you can short breakdowns and generally be okay and get away with it because it's like the predominant you know trend is generally your friend, right? And um generally I think when you start to get these inflection points building is when the people who got rewarded for thing

like you know lazy execution is the way I describe it. Um tend to get punished before like you you see less of rewarding of shitty execution and more punishing of it. Um as you know shorts you know don't get rewarded for long or shorting you know selling the the breakdown for the 50th time this month. It's usually it's usually the end of a trend. So like we've been we've been turning sideways sideways down for the last four to five months. So it's usually the first sign of a end of a trend and then the next thing is you you hope to see the high quality assets start to move. Um but this bottoming process takes time, you know, >> like it it takes time. It's not you're not going to it's not going to wick today up back. I mean maybe it will, but you're not going to wick back up to 100K

in the next week or two. Like it's a it's a bottoming process. It takes time. And I think I think sentiment to to Yan's point earlier regarding FTX as like being the bottom uh last cycle. I think this cycle's really tough for crypto natives because there really hasn't been like yeah you had 1010 but there there hasn't been like a huge event to like mark the bottom. 1010 was you know closer to the top than than the bottom like >> Yeah, that's crazy. >> Like >> you could have sold after 1010 and you'd be so happy. >> You'd be doing great. >> You could have sold you could have sold the wicks off the bounce. 1010. There was a big bounce afterwards.

>> Yeah, like soul got back to like 190 or something. I think >> there was there was a massive bounce for like the week or two after and >> it's just but I think it's really tough on you know the people who have been in crypto for years because with FTX collapse and Celsius and all that stuff it was just like you know not your keys not your crypto and now it's kind of like well this sucks like we can we don't have anything to blame like it's just it's just painful. >> I mean so technical industry. >> It's it's so tough like this this one was tough, right? Like there was a lot of qualitative things going on at the time like I think Jose you know did a good job you know explaining like back then like why like he was generally not

super bullish. Um but like when I when I think about you know prior cycles right where which you know preceded big big draw downs in Bitcoin there's there's like a very clear reason outside of crypto why risk was getting clobbered like 2021 2022 cycle Fed hiked rates 450 basis points in a very short period of time. The end result of that is pretty inevitable right like it's not immediate but like it's probably pricking the rick the risk asset bubble from 2020 until that point. Um whereas like this time around it's just like okay like 1010 happened nuked crypto completely crypto by itself and then equities just continue to grind higher you know

staying within a percent or two of alltime highs and so like that had like that that was like the tough one for me it's like when I looked at like everything outside of crypto I was like all right well like it it's not amazing but it's not you know it's not justifying what I'm seeing here and then it you It's clearly crypto is trading on its own for its own reasons. Um, which has made it tougher, right? Like it it didn't allow me to, you know, get my bias in order as fast as I would have liked. It took me way too long personally.

>> Yeah. Yeah. I think also like you've seen this whole SAS Bitcoin correlation we talked about a little bit there that people are bringing up. Um, there's been rumors of uh what like Brevin Howard selling IBIT or something. I don't know. There's been everybody because everybody I know because everybody just like we need something. We can't bottom until we know. It's like we got to know and then we can bottom and I don't know if we're ever going to know like >> it's okay not to know, you know? >> Yeah. Ignorance is >> Who's the the one dude? Is is Garrett or Jyn? I forget the the name of the dude.

>> Bullish Garrett. >> No. No. Recently he's like this BTC and ETH whale who's been sending hundreds of millions if not like and he has billions of BTC. um he sent like a couple hundred million bucks the other day and and we obviously moved um to Binance uh forget his name but yeah it's like you're still seeing kind of whales pop out of the woodwork um and and there's just like selling to protect margin and it's just you know your your standard kind of force selling which usually is what marks the bottom when people are selling because they don't want to.

Yeah, you generally speaking want to be buyers when other people are forced sellers. You generally speaking good entries even if we haven't bottomed and you know we've got six to 12 months of a bottoming period. If you're buying from people who are forced to sell usually usually a good entry but similar to Jason like I'm not necessarily super eager to deploy like right now like yes I'm I'm bidding but like not not you know full porting by any stretch of the imagination. like small bids on assets I like with cash flows and a few, you know, small cap onchain DeFi tokens that I think are interesting and I use their products. Other than that, it's kind of like stick to the majors, bid the things I think are interesting and that's it.

And you slow slow slow DCA, like old school, nothing sexy. >> Yeah, I agree. Um, yeah, I don't I don't really have any, you know, too many more interesting takes. I don't even know if those were interesting. But one thing I was thinking a little bit is that like you know Yan was talking about things like the 200E moving average and you know there's just like a ton of things that people look at right that might have some kind of predictive edge when you back test different things and like the more I think about it with like Claude and all of this [ __ ] I have a feeling like I mean I mean my gut feeling is probably a a a lot of I guess maybe like edge or info asymmetry there probably just like

goes away over the next couple years and I I don't know like my my gut feel watching everybody build all these really cool dashboards all these cool tools building you know leading indicators and trading strategies is easier than it's kind of ever been now and you know testing and back testing things and I don't know like to me it kind of feels feels like we might be moving back towards more of a valuation kind of um or not like that value investing is going to you know be as big as it was back in its heyday but I think we're probably moving back towards something like that um in a sense it it kind of feels like that not just in crypto but in um >> in too I don't know

>> it's also like all the so many people doing all this cloud code stuff and building their own agent networks and everything. It also feels like in six months you'll just download like the claude app and just like you don't you won't even need to know that level of stuff. You know what I mean? Um >> yeah I mean like so on that note you kind of seen the the agent narrative pick up a little bit in in crypto and so you know there's a world where it like previously it made sense you built a useful agent and you can somehow monetize them by allowing others to use them and and um problem was they weren't that useful but I think you know we're

getting to a point where they are increasingly so and and and that should kind of continue. So you know there is some argument to be made where uh one of the better ways to monetize them will be through crypto and and I think agent to agent interaction will is is best done through crypto as well. Um just in terms of like how payment processors are set up versus wallet like there you know they're set up for real people and crypto is kind of set up for agents with with just a wallet is the only thing that you really need. Um so there there's some growth that can happen there. Yeah. the the uh the value versus growth thing is interesting. I mean, equities wise, it's turned into a stock picker market, right? you've had like uh

never have you seen this many names um do like well while the market's kind of topping because you've seen you know the mag seven fall off and then some pretty big seismic shifts in in narrative where uh Daario came on you know he he kind of it's been said before but I think he really brought it to light which was um this proposed degree of capex uh inundates these companies with massive amounts of debt and if expectations are off not materially uh you you do have obviously not going to be solveny issues but you you definitely get into a tough position balance sheet

wise and and so you've seen as a result Apple kind of pick up right they've historically been slow mover and and now they they do kind of own the end user um through their devices and and so and they have just this gargantuan balance sheet They spend nothing on capex and so they're like not by virtue of skill. This is that I think they lucked out that they didn't just chase the the capex spend but like yeah they're in a great position. So you kind of see rotations happening and and these things that were it's crazy how quickly narratives or or confidence changes in in some of these massive companies where you think they're pretty derisked but um yeah expectations and and all these

things change so quickly. Um I saw this chart the other day which I thought was just like super crazy that kind of just shows the market. You've had like um basically you're getting stocks that are falling at the most extreme levels that you would only see at bottoms, but the index is like not moving from all-time highs. Um like 115 stocks declined by 7% or more in a single day. This was on February 12th and the S&P was like 1.5% below. And if all the other draw downs are like bottoms basically and so

I think that chart just kind of like it is a stock picker market, right? And also like I don't know the things to avoid seem it's kind of like crypto. In crypto it feels like the things to avoid are almost more important than like the things to buy in a sense. Um, and it kind of feels that way with equities too right now. Um, >> yeah, I think with equities though, it's it's pretty positive in the sense that, you know, you you've basically seen value capture from AI trickling down to a lot of these other names, which is which is great. I think that's how you get broader GDP growth, less concentration around names, like you you want that value to pass through the rest of the economy in in the form of like

margin expansion and and just higher productivity. So, you know, I do think this is kind of the story you need to support largecale GDP growth. Um, but at the same time, you're seeing, you know, like I forget what Walmart and some of these names are trading at, but that's it's massive highs relative to where they were before. So, there is a certain amount of growth already priced into these names rather than, you know, it being ahead of us. I mean, breadth increasing is a good thing. like it's kept the index up and you know we've seen distribution among the the mag seven who had carried the index over the last two years. I mean this is something uh asset managers and and multif family offices and all those types of guys have been talking about

for the last three years is it's really hard to to own the index when you're that concentrated in a few names. It also made it really tough for active managers. If you weren't overweight, those names, you underperform. And now you're seeing th those managers actually outperform because the they're to to Jason's point, like their deep fund fundamental analysis, like that stuff is starting to pay off again like as breath is increasing, really holding the index up because I mean you had, you know, Meta up 60 pips today, but you had the Nasdaq still up 80. You're seeing you're seeing breath increase.

>> It's also interesting, right? I think Duck had uh his 13Fs recently reported and I'm pretty sure he's um like rotating essentially out of Max 7 into equal weight S&P, right? Um kind of capturing that sentiment a bit. Uh >> which is what a lot of people were trying to call for a year and a half ago, two years ago. >> Yeah. >> Yeah. It's it's not just about being right. You have to be, you know, your timing needs to also >> absolutely >> also be right. >> Um but yeah, just a lot of interesting things going on right now. Um, tough tough environment for sure. Definitely.

I think pro I don't know. I think this is the tough probably probably the the toughest like market environment like for me at least uh in I don't know recent memory. Like I said with with 2022 bare market like I had like a very easy reason for why it was like building up for months and months in advance, right? like this one like I don't know just this I don't know tougher tougher environment across the board for me. >> Yeah. Morale morale has never been lower I think from crypton natives. I had a conversation with a buddy of mine who's been in crypto longer than I have and he he didn't hold any crypto at the moment like none and he hasn't held some for some time. He's like I'm just done with the industry. There's no innovation anymore and was just tapped out and he

started well before I did. So you're starting to see signs of those guys tap out. >> A few more a few more of those and then up only. Right. >> Yeah. Yeah. Or bag holding >> back to tradi >> back to the suit and die. >> No, I mean I'm I'm still I think yeah, some of the core primitives have been established, right? And so it's it's harder to to find obvious plays, but I I do think you still have this tsunami of capital that kind of comes on board just through increased utility of existing assets, right? Bringing equities on on onchain.

uh opens up the universe of of buyers, right? Because it's it's just harder to own them and you unlock liquidity by using them as collateral. I think, you know, kind of a lot of these areas where where crypto adds utility to existing assets that are already liquid will force more of them on chain. And so, you know, I think stable coin supply will continue going up. Um, but yeah, you don't have these, you're not gonna have as many of these very clear zero to one moments for sure. Um, but I feel like the space does tend to periodically surprise w with with new development. So, um, yeah.

>> Yeah. I mean, I don't know. Maybe I'm just a perma optimist, but I'm It's pretty clear to me there's going to be a period where stuff just starts trending well for a while and everybody starts jumping back in. Like, this is just the way this goes all the time. And >> you you can kind >> I'm not saying everything is gonna go, but like there's going to be Bitcoin's going to come back. There's going to be some new meta that everyone's going to convince themselves of, right? Like everyone who quit crypto forever is going to see stocks doing nothing, you know, or like it'll be like 1% is boring again now, right? Like 5% yearly returns or 8%. Um I don't know. We just need a

new thing and who knows what's going to come. The thing is timing that of course is very hard. Like just holding stuff, waiting for that to come. You can bleed for a long time, right? Um, so >> ask your ask uh Miad who how believing is going. >> Yeah, >> it's tough. I I still don't think I don't necessarily think we need a a a new thing for things to really get kicked off again. I think we just need to compound on what we've already done. >> Like wins compound like we saw them really have their moment in 2021, 2022 and it wasn't until 2024, 2025, 2026 that they really started to take off. I think I mean I'm biased but I think Per Dexes and exchanges are kind of at the

same moment like they just had their their year this past year. Hyperlid led that and you've got others coming along that are leading the charge and now they're going to go through the next you know two to three years where they're they're going to look a little bit more uh centralized in some manners. You'll have a little bit more permission markets KYC on some of these exchanges as well. And I I mean I think we saw that happen with stable coins too like they they became more permission. they became more KYC and I think we continue to see that with with perex especially in the US you saw it with with Hyperlid today coming out uh kind of announcing they're stepping into the US in a way um and so I think that's that's massively beneficial for the entire space I think them and lighter here in the US

architect as well I think there's there's some great people here in the US moving that forward uh in a good way so I think I still think we're I don't think we need a you know zero to one moment I think we just need to keep compounding on what we've built so far and then things will come from that. >> For those who aren't aware, do you you want to quickly explain what hype recently announced uh in the US? >> Yeah. Yeah. So, they've kind of got a hyperlid policy center, HPC is what they're calling it, which is a research and advocacy nonprofit institution that's just kind of, you know, really pounding the table for for hyperlquid and and fair regulation in the US.

That's the That's the TLDDR for you, which um I think is I think is actually really really good. Um you know, as >> well, they don't have any friends on they don't have anybody lobbying for them right? >> Not in the US. >> And so and I think like a lot of lobbying is like kind of directly attacking their their blockchain and stuff too >> trying to help them out. Yeah. >> So they kind of need this as like a defense right? >> Yeah. And I think it's good for them to have a voice at the table, too. I think it's good for the the leading per decks in the space to have a a voice in DC. I think that's net positive. I think over time, I mean, similar to stable coins, you start to see these look a little bit more permission, a little bit more KYC

at least aspects. I think uh the way in which it goes is you'll have uh essentially like an HLP like E for equities and LLP for equities where uh as these guys can start to talk to spot market makers here in the US they're going to need a a compliant counterparty uh which will be like an LLP which is everyone who's KYCed. Um and I think that's how it'll end up playing out. I think that takes time but I I I think that's the way in which it goes. You'll have permission and permission list. So you have an LLP and then LLP and I think that's the way in which it goes and I think that's actually incredibly bullish for the industry like everyone's like oh no uh permission markets that's not you know crypto's ethos I think that's not bullish these businesses though

incredibly >> no I'm with you I I'm still very bullish on the space not just from a Bitcoin up price up everyone speculates perspective but I I just think assets will flow here right you know two of the bigger reasons why people come into crypto are like to make directional bets that you can't really make elsewhere and then or just exposures in general and then and then yield right so I think on the exposure side you'll have more equities more RWAS on chain um more of them can operate as collateral and unlock liquidity against them whether they're private or public assets and I think you know that's just a major draw over time for for users and something that you don't really have

access to unless unless you're, you know, like private banking um and and doing well kind of situation. So, there's that element. Um and then the the unique like, you know, the experimentation that happens in crypto yet two of the bigger by byproducts have been prediction markets and and memes. But the whole premise is I want to get unique exposures that I can't get to in Trafi and whether I want to speculate on the attention of something increasing or the probability of an event. I think there will be more of these uh protocols that enable unique exposures or or people to kind of speculate on them and so I think that'll kind of continue to draw capital into the space and and something you can't really do much

elsewhere and then on the yield side rates are going to come down right and and so in in Tradfi most yield is just uh credit spread on treasuries right so as treasuries come down the yield opportunities there will come down I think in crypto you have through the the tokenization of of these productive assets yields that are a function of utility. Right? If this asset is used as as uh an HLP or if I'm if I'm operating as a house for something or if I'm providing liquidity, you can have these unique assets that provide a yield. Um, and so I think you've actually seen this element kind of chatted about on CT, but like the the whole premise of recursive uh borrowing being actually a pretty

meaningful feature and and I definitely agree. And then the whole premise is, you know, you you use collateral with a higher yield to borrow cash at a lower yield and then you transfer that cash into the higher yield asset and you it's just looping, right? And obviously you don't want to do that with an asset that's volatile, but I think you have a lot of these pretty low vall products and and assets um that that generate yield from uh some form of utility uh that that you can loop. And then if you do the effective yield, you're kind of getting it's actually going to be pretty material relative to uh what you're getting elsewhere. And then you have, you know, pretty decent net interest margins that you can get good good

lending, uh, rates at. So, um, we actually have we we did a seed deal for something that we we'll share later on once the the the project goes public, but it's like along that vein, and I think it it can do really well, particularly in an environment when when yields start to come down. >> Yeah. I mean just think about you know once we get equities like onchain in efficient manner with good liquidity you introduce the basis trade on a lot of these platforms and let's say you know lighter partners with citadel someone in the US to do spot equities you can run hedge funds can then run basis trades there let's say markets get super efficient let's say you're collecting 6% there treasuries are yielding three if they come down a bit so all of a sudden

that's a a much more advantageous strategy for these guys to do yes there's risk there and you know more risk more or more yield more risk, but I think it gets super interesting on the yield side. >> Yeah, Athena's doing that um on the equity side with with Hyperlid. >> Yeah, they're crushing it. Wish I could buy their token. >> Do we want to talk uh about this A thing? >> Yeah. Uh so basically A Labs came to A and um they have this proposal that like we're going to redirect 100% of the protocol revenue to the A token, but we want um what was it? They want like a bunch of the treasury upfront, right?

And then there's also a clause where like um it's the profits after the labs employee salaries are paid and everything. Um, so it seemed like kind of mixed reactions on it. Um, seems like Mark Zeller from A was like pretty against it, pretty loud. I didn't realize how bad of a relationship him and Stanny have. I only came to realize this over the past like couple months or so. Um, but yeah, I don't know. uh like the market I don't think is totally at first it seemed like the market liked it but then once they kind of went through and digested it more it wasn't as interesting. I don't know what you guys

think about this. like obvious been trading all right since um relative to the rest of the market I guess in particular but it yeah it's a it's an alignment issue you definitely run into when when on the investing side especially at like seed stage where you know you're trying to figure out where value will acrew and and how the two can exist and so I think this is a cleaner system um for sure and and it and It's one where, you know, you're not forced to to buy back or or send value to the token, which uh I think a lot of these projects have to do as a way to

signal that they're going to continue doing it. Whereas um because they kind of sit in this in this weird limbo where, you know, where does the value actually go? And if we're not immediately using it to to as a yield or buyback, then then the token won't get it. And so here you have the scenario right where like net income goes to the and then you can either choose to distribute it as a dividend buyback or into retained earnings and um uh decided by the token holder. So I think it's it's it's interesting. Uh, I think like part the the more interesting element is probably if it plays out, I haven't really dug too much into it, but it seems like where their next opportunity could be is is they're trying to do a lot of this um solar financing. Um, basically like bringing

uh these assets on chain and then using them as collateral and and so creating, you know, ways for people to to to do RWA lending on their platform and and expand their asset base outside of a lot of these cryptonative assets. Um, which I think is kind of where a lot of these markets really need to go if they want that next 10x in in market size growth where they're not purely, you know, dependent on just the uh market caps of of BTC and others going up. It's it's it's not cheap if you look at like I think they're doing 10 to 12 mil a month, right? So, it's like trading at 120. It's like two bill FTV with and and doing 120 in topline. Yeah, like trades him upper 30 times. Like that's that's

pretty expensive in my opinion for a an asset I would consider less not necessarily a growth asset the same way in which I view the exchanges like hyperlquid or lighter like they don't they don't grow at the same rate. And I think Yan and I we talked about this a little bit offline. I view the exchanges a little bit more like the tech companies in crypto high growth high margin businesses and obviously still a high margin business but it's not that high growth tech company. It's more of like a a financial uh business. Probably trades something you should should probably trade at some sort of premium to book value is kind of how I view it.

I haven't I need to do more work on that, but that's kind of how I see it. >> So the the only counter would just be that financials kind of trade there part of because like their growth is just from you know user deposits and and banking activity. So like they just can't really get much growth. So here if they can find new avenues to bring a lot of assets onto their platform then they can potentially experience a good amount of growth and and you know you can if this is the only place you can do this kind of financing probably be a bit more extractive on the fee side and um >> some pricing power there.

>> Yeah. So that like they would need to really lean into that and pull it off but I'm sure that would take a long time. Um, I think they were estimating the because they they basically also said they're going to be sending credit card and other sources of revenue to the token, but I I think that totaled up to somewhere in like the 10 to 15 mil a year range, right? So, that adds call it 200 mil of market cap or of FDV. So, not not a meaningful amount, but but definitely something. Um, yeah. I mean, the end goal, I think Jeff was I forgot what what Potty was on, but he was just he was basically talking about, you know, the goal for Hyperlquid is just to be the everything app and and kind of doing everything in one place

and and owning the consumer that way, which makes sense. Um, I don't know if a is trying to do that, but they do have some of these consumer products that they're trying to lean into. I don't have an a position. Um, for what it's worth, yes, this isn't me talking my book or anything. Uh, I kind of had like a like a question for you guys a little bit. Um, not really related to the abundance article. Um, but kind of related to like their uh av4 kind of like trying to move into like more of a fixed or stable rate lending, fixed rate lending kind of thing for institutions. Do you think there's uh a huge demand for that? And do you think like that V4 will actually like be

a needle mover or or not? It's something I've like thought about and obviously, you know, like fixed rate lending is a big thing in in Tradfi. So, I would imagine right there's probably some demand for things like that, but I'm kind of kind of curious since you guys might be a little bit closer to these things than than me. I'm not super up to speed on it to be honest. I I need to dig in. But I think it's probably more straightforward to do than or or more scalable at least than uh retail lending because the idea here it has to be under collateralized, right?

Otherwise, it's just not going to be capital efficient to do these. >> Yeah, I'm I'm kind of like looking into into it more. It's supposed to be launching later in 2026, I guess. So, >> it's probably like a Maple type product. Yeah, I think it's it's similar to to how Maple does it. >> I mean, it's like a clear thing that like you need in, you know, a >> a financial system, right? Like an economy, these types of lending. So, like it it makes sense. I'm I'm just like really curious like what that traction looks like.

>> Yeah. I have no no temp Jack on demand there. >> What was that? >> I don't have any temp check. Like I have no idea what the demand is there. I mean, these things have always kind of run into adverse selection issues, I guess. So, or you're just lending to like crypto hedge funds. Historically, that's what it >> Yeah, exactly. >> was for a lot of it. Um, >> it's uh No, it's interesting product line though for them to try and like worth tracking everything. And >> if it gets more institutions boring on chain, they could be good. If they're like very creditw worthy could be a good place to like I don't know, work stables, I guess. I don't know. It's hard for me. All these things are cool, but they're like they just don't get me like crazy excited. You know what I

mean? Um, and maybe that's just something maybe we're just crypto in general is becoming a bit more boring in that sense, right? Um, I don't know. >> I mean, I think a lot depends on the type of asset, >> the yielding on that asset and things like that because >> I don't I don't think you'd want to go out the risk curve and say, "Hey, I want 12% on Hyperliquid." Like, >> yeah, >> big straight. I think that's quite risky.

>> I don't know. Doesn't get me super excited either. I think it'd be great if you you could do that. I think there's just a lot of risk >> and it's not my area of expertise either. So, >> yeah. What if you can borrow against your HLP and expand it with some USDC that that you borrow for four or 5%. and then your effective yield on the HLP is much higher until yeah there's a big draw down. Um yeah, it's like these lowvall high higher yielding products that that I think you you can't really do that outside of crypto and I I like I do think that's a pretty meaningful thing. It's funny. It's a basically just a product of DeFi summer experimentation that stuck around um and and wouldn't

have been possible if or like wouldn't probably wouldn't exist if it weren't for that period. >> Um have you guys been keeping up with this base stuff? So Zora, it seems like they're full pivoting to Salana. Um, and also they're moving beyond the content thing and they're doing these attention markets which I think are just like memecoins, are they? Um, not totally sure, but it seems like pretty big pivot there. Um, Bass is moving on from the OP stack.

They're going with their own they're building their own tech. So, I think that'll be like a few year transition thing. But it's interesting how like Opto token didn't react to that at all. It's like Bass makes up 99% of the Optimism chain's revenue and they just announced that they're leaving and the OP token didn't even really sell off. It's like who's holding this token at this point, right? Like nobody no like that just shows me that like no liquid funds or anybody is really holding that token at this point. That's why it's it's one of those like it's tricky to use as a uh I know Flip had this great piece on on pair trading, right? But I think if you

pick the wrong ones that are consensus shorts, like you you can actually just get wrecked pretty decent. Like an an op that uh doesn't sell off on news like that means you probably don't have many natural sellers left and maybe it's better to use something else. >> Yeah, it's probably time to move on to something else. Yeah, >> good time to move on. Or or you use a basket. You still keep it in your shorts. You got OP, Ian, arbitrum and and you know, call it drift and you you use that as your basket short leg.

>> Yeah. >> You've got less denominator effect or like it's it's distributed and then you you your scam wicks don't don't hit you as hard. your volatility can actually still be quite high depending on what what asset you're long uh and actually can can hurt your sharp ratio but it's uh baskets baskets can help once once uh >> okay actually it was a bit of a delayed reaction it's down 10% now >> there he goes >> to be fair alts have been dying since we started this bit Bitcoin's been chilling alts have been dying since uh >> the report things go down when we go live just so >> but no like even even pair trading in

crypto like yeah I just wrote a report but it's like one of the few things like actually interesting right now to me like actually doing pair trades and and running that with truly like hype soul like as an example I don't have that position on but like as an example I think that's that's quite interesting >> what do you uh what do you use to put on your parids Do you use like pair protocol or like what? >> Yeah, I use pair protocol. Yeah. Yeah. Big fan of Huff. I think that they've got a great product. I'm a big fan. Big fan. >> Yeah, it's definitely a >> And you can do baskets. You can adjust positions in live live time. I think it's a good product. Really good product.

>> You don't think um I mean I would expect exchanges to probably eventually implement that. Yeah. >> Yeah. I don't know if they want to be an OEM though. Like I think they just want to run run the exchange and not actually be like an order management system. I don't think they necessarily want to do that. Like I think a likely outcome is like acquisition probably. Like I feel like that's a good acquisition hire for for one of these teams would make a lot of sense to me at least. I don't know if they want that but like I think that makes >> like I don't even know what the overlap is like most people who don't really care about you know >> I know I think it's it's it's an onchain like in silicone type of product.

>> Yeah. Yeah. Yeah. So, I mean, they could be a standalone. I mean, it depends how much they're able to charge on like institutional product, mobile app, like what what kind of what kind of fee they're able to charge. Is it is it going to be like similar to Silicon BIP on everything? Probably. I think that makes a lot of sense. I think it's actually probably like a decent business. Just it's just tough because it's it's got no mind share right now whatsoever. The product is is great though. Um, and it's it's a bare market. So, I think it's tough tough for them, but I think they continue to ship. I'm excited for their institutional product that's coming in their mobile app.

>> Yeah. Pair protocol. >> Yeah, I've used it. I like it, too. It's It's definitely good. Um >> same. >> Yeah. >> Oh, yeah. You guys have all used it. It like It's good. Yeah. Yeah. >> You're the one who recommended the the the pump uh Monad trade for me. It's been my best trade all year so far. >> Even it's good. It's really good. I mean, the token isn't going anywhere or anything, but it it's a good product. I think most people don't know there's a token either, like to be fair. >> Yeah. >> Like I think it's it's one of the the few products very few people also know about.

>> Well, yeah. Right. Like what's a surface area of crypto dgens that are like, you know, meticulously thinking about a pair trade to put on. >> Yeah. Not not many. I think I think when they simp give me a basket of def of Dpin tokens and let me long helium against them. >> You can do that. Ask they've got AI parrots in Telegram. You can actually ask that bot that and it'll create the basket for you. >> Oh, that's kind of >> I just feel like I feel like I feel like shorting deep pin tokens is so expensive though. >> Oh, you pay a crazy amount in funding, I'm sure. >> Yeah, like uh long a short ETH is probably a good pair of trade here.

>> Yeah, like I would probably own a over ETH here. I mean, I think I definitely >> That chart looks pretty bottom too, but yeah, we'll see with uh I mean, we're talking about base. We kind of left it, but that's okay. There's not much to say there. I don't think Bass is like I've seen some people say like Bass is like going to shut down and abandon shape. I don't think any of that's true. Obviously, it's not with this a new announcement. They're moving to their own stack. Um >> yeah, I but I just kind of want to touch on the pair stuff because Jason made a good point. It's like I don't think there's too many cryptogens looking around at pair trades. I think the big unlock is one that an institutional type product and the other one is a stupid proof product where it's

it's mobile friendly and it looks a lot like prediction markets. It's hey XYZ is happening next week. Which asset do you think outperforms over that time period? Is it Bitcoin or is it a hyperlquid? And you tap hyperlquid. Okay, you put that pair right on like you put that bet on. I I think that that's a big unlock for whoever can do that. I think it needs to be stupid proof and then people get interested and then they start using a more robust product. >> I makes sense to me. >> Yeah, I think I I want it to look a lot like the DraftKings UI. like that that's what I want it to look like. I was like over this time period which asset performs better give them a pre-anned basket, you know, maybe it's Bitcoin Cash versus Bitcoin, you know, and and run that.

>> Apparently, Bitcoin Cash is a quantum hedge. >> Yep. >> I'm joking. I'm joking just in case people think I'm serious. Um, >> train though. >> It has been for every once in a while, Bitcoin Cash goes on a nice little run. I remember in uh 2020 before COVID before Black Thursday, Bitcoin SV and Bitcoin Cash were just ripping to start the year and I was like this is not good. This is something's probably wrong here. And then yeah, pandemic it was in the charts right?

>> Um I don't know, man. this miss market is like I feel like the last few podcasts have been the thing is I know a lot of people are depressed and stuff but I really I think I just have like the blind optimism that we are making like a lot of good progress in a lot of uh sections as you said there are a lot of interesting protocols like this pair protocol is interesting a lot of the RWA stuff we're doing um >> and then also like in the in the option world like derive like derives liquidity I think it's not great but it's like the best product today and this would be a great conversation I have with LTR

>> um because I know he's close with the Cayenne guys like and then maybe maybe Robin Hood chain who knows but like options at some point get a lot better and there's there's more yield too you put those in vaults you run basis trades and all of a sudden you let these these sophisticated traders run vaults and you're going to have yield you know ranging from 4% to 25% you know you'll pay for that risk risk, but I think those things get really interesting. I don't know. Thrive is an interesting one. Liquidity sucks, but >> yeah, options are still like it makes way too much sense for Robin Hood to kill that, but who knows if they're actually going to go hard at it.

>> Yeah. >> Um seems like such a natural natural fit for them. Yeah. Overcome the perm. >> Yeah. Yeah, >> I don't know. I like options more, but I also don't trade per options really. But when I ever do when I ever do speculate such gamble, I've always liked options more. >> Can't get licked, which is nice. >> Yeah. Hey, it gives me it keeps the hope. It keeps the hope.

>> Yeah. You can go from you can go from a zero to a big winner real quick with options. >> Yeah. >> Yeah. I've had an option come back from the dead, you know, and it was like I would have been liquidated. >> Volatility. >> Yeah. Man, >> it is a different expression. >> It's also just cleaner. I don't know. I just find it cleaner. It's like easier to express what I want to do. >> I think I think you're a rare like rare like subset of the people because I think most people would say the the linear perpetual future exposure is easier for them to understand. But I agree. I I like options because what I want to express, I can actually do that.

>> Yeah. >> In like a more pure way, if you will. It's also some good way to like pick up yield on the sell like I'll buy this thing if it comes down here regardless. So I'll sell some puts and pick up some yield or whatever. Yeah, >> that's what I'm saying. The vault strategies be pretty fun. The worst thing about last cycle is all the vaults and options that that they advertise their like APYs and they were just running like blow up strategies. It's like >> that's also what happened to like most hedge funds like options.

>> No, I know. I know. Like that famous video of the guy right in front of his desk like he starts the video like Jerry, we go so far back. Jerry, I love you, man. >> Stop. 10 minutes in he's like, "So we blew up." Um, >> yeah, that guy also wrote the book. It was literally he literally wrote the book on like selling options. >> When people get greedy with options, that's when it hurts you. Like you can hedge really well, you can collect yield well, but when you decide, hey, >> well, people are doing this on Poly Market. They're they're calling it bonding, and it's the same thing. It's basically buying sports games that are

already over, but it's like 99.9% on the poly market and they're like, "This is a zero risk strategy." I'm sorry, but there's definitely a risk there that like some weird [ __ ] happens one time where like a game gets something happens, the resolution is like goes it's like >> some dude gets done for doping and they forfeit the match afterwards. >> Yeah. It's like you just need one of those right? >> I don't know. I'm excited to see all these DGEN vaults and strategies pop up. Options are always really cool. I've always, you know, generally sucked with them. Um, you know, I kind of jumped into them before I knew what what I was doing. So, I was mostly a uh, you know, a tuition expense.

>> Yeah. I've always felt them to be like they're what I find them what I find them interesting for is like if things really get crazy >> on the euphoria side >> you can kind of just like sell most of your stuff and then you can buy some options just as like a hedge in case it gets even crazier and then you don't feel bad about like being on the sideline. I guess you can do a similar thing with putting like x% of your portfolio on like a leverage trade or something but >> yeah but then you have liquidation risk there. >> Yeah. It's also, I think, nice if like, you know, you there's been a big runup and and you don't want to put on a short like you don't want to sell because, you know, like tax risk or or whatever.

You're still bullish on the asset, but you think there's going to be a pullback. You don't want to put on a short because then you have to make sure you have a stop on it. Otherwise, you're just like it just runs away from you. So, you can buy puts and if they expire worthless, like you you're fixed downside, >> some temporary, >> you sleep better at night. Yeah. You don't overthink it at that point. >> Sleeping better tonight's important. >> All right, I think uh we're coming up on an hour now. Um so yeah, thanks everybody for joining. We'll probably end it here. Um two weeks from now will be March, which is nice. Spring is around the corner. Um and with spring weather comes spring prices, right? That's >> Yeah, spring. You know what spring is?

It's another word for bounce. Yeah, it's true. >> Dead pout bounce. >> The problem is like we're so dead and then summer's always dead and so we what we get maybe like a month or two act really >> usually gets some bounce in the spring every Yeah, the clarity act. We haven't talked about this stuff yet because >> it's hard to like us, I think, to have any real good insights on like the chance of it passing, but >> those are um still potential upside cases that I think have been like pricing pretty aggressively to the downside. Uh like people are not really optimistic of this stuff passing.

>> I mean, it kind of has to pass before midterms. Now, >> if it doesn't, it's not that's not ideal. So, like, yeah, I guess the closer you get to midterms, the the the bigger that becomes an overhang because post midterms, you would expect house and stuff to to flip or, you know, be more even. So, then you're probably not getting [ __ ] done on that front, right? >> Yeah. >> So, >> yeah, >> I guess I guess it's on a ticking time clock right now. We'll see. >> We'll see how it goes. Anyways, we'll wrap here. Uh, thanks everybody for coming on.

and uh we'll see everybody in a couple weeks from now. >> Awesome. Thanks, guys. >> Thanks, everyone.