Markets are pumping, but is it a true recovery? Kyle Reidhead on fundamentals

Transcript

GM good morning welcome to the milk Road show The Daily crypto show that hits harder than a coffee fueled Sprint to the bathroom I'm your host Jay Hamilton it's Monday March the 24th and some days you just wake up and you think it's all and you know what you're probably right 99% of tokens are even on green days like today which we're going to discuss in a second but here's the thing when you look back at the start of any great technology there's always a lot of a lot of there's a lot that don't make it but here's the thing out of every new technology there is some of the biggest companies in the world that are created think about it there's only seven in the

Meg seven and this is where crypto is at Today Gone are the days where everything just goes up always and endlessly up only and now we're in a transition from Vibes and pumpamentals to fundamentals here to discuss this with us today is Kyle rehead co-owner and head of research at milk road now before we jump in guys we got a big week coming up tomorrow Tuesday we've got Yano coming on the show to discuss the D takeaways Wednesday we're going live with hi partner over at dragonfly Thursday we got the legendary Arthur Hayes on the show so if you're not subscribed to the show you're going to want to hit that subscribe button and tune in because we've got some amazing episodes coming up for you today's episode is brought to

you by definitive Advanced trading on every chain it's also brought to you by coin shift powering top pop crypto treasuries with their stable coin CS usdl Kyle welcome back to the milroad show that's a hell of a lineup you got going over the next week here what am I doing on this podcast I don't even know that's a crazy lineup I'm excited you're you're the you're the celebrity man you're the one everyone comes to see H okay we let's start with we got green candles this morning are we back uh no and anyone who says that I already said is getting blocked on Twitter uh so don't even ask that question don't even say don't even look at the candles right now uh I think um look I think there's nothing in the charts that show we're

back you got to remember that look I don't think we're in a bare Market I've been on here and I've said a bunch that I don't think we're in a bare Market I know there's some that do but even in bare markets when you have down only markets look at 2022 for example or back in 2018 the worst bare markets we've had in crypto there were days or weeks or months where like you have massive pumps during during these times um and uh look it's very nice to see green right here but it doesn't mean that the trend has changed or that we're going to vshape recovery here and go up only um and uh yeah we'll pull up couple charts here you just shared my my screen here and I've got the ethereum chart up and I tweeted this one out this morning because I Sor every I'm getting super

bullish and uh you know you've seen that chart or the picture where there like it's so back it's so over it's so back it's so over that's basically the stage that we're in right now you see it all the time um this is kind of the zoomed out look of ethereum for those that are listening um I'll try to explain it to you but you might want to just pull up YouTube or or watch on Spotify but I've got a chart of ethereum uh it's a daily chart all the way since 2021 and I think I've shown this range before but we've been ranging between 2150 and basically like 4,000 or 4100 whatever it is for like five years okay four years uh it's it's been a tough go obviously and I'll get to Bitcoin in a second don't worry but um we fell out of that range with

this pullback which was a little bit unexpected when we called for a 30% pullback in markets um didn't necessarily think it would go this far back right um but we've been out of that range and below it for a little while and so that that 2150 acts as or has acted as really good support for us for the last two years right we've came back we've hit it a bunch of times we've never gone below it and we finally did go below it and now we're sitting at as we record today uh 2084 and so when you look at this chart here I'll just zoom in a little bit we're not even back up at the old sort of support levels and likely what's going to happen and we'll see is these support levels often turn into resistance levels so when we hit 2150 what's going to happen is there going to

be a lot of sell orders there are people going to be selling uh are we even going to hit 2150 like I don't know yet but until we are like fully Above This 2150 Mark and we've closed at least a daily but this is you know more likely a weekly even a monthly like I'm really not fully confident in any pump that we have or any Market structure here because this still doesn't look that great um okay I'll come back to this in a second but even if we go look at Bitcoin same thing we also fell out of the range that we've been in now we wasn't a fouryear range thankfully uh but a range since since like November that we sort of fell into with 91,000 or 915 as the as the support levels and we broke below that back in in um in the

end of February and so again I know we have some nice pumps you know we went all the way down to like 76,000 or whatever it was we sit at 88,000 right now we still are not back at that same sort of old support level right probably that support turns into resistance again just like I shared with eth um and so like what happens when they hit that I don't know I imagine we're not just going to like plow through it unless I don't know the FED comes out tomorrow and it's like hey emergency we're printing $6 trillion do which like that's not happening that's not gonna happen yeah that's not happening so like I just um I don't see a region to be overly bullish now again my long-term Outlook we're still in the bull market we still have a great year blah blah

blah blah blah um but I'm not I wouldn't be like Levering up on these numbers or anything I think we got to get through some critical Market structure some some critical numbers before I'm like overly excited by any means I'd say what about if we look at the NASDAQ and what's going on on the on the stock market side yeah I mean NASDAQ hasn't had as I mean it's had a good day today but it's up 2% um but I it's still in a pretty good pullback here like let's see what we're at right now we are down we down a total of 14% man wouldn't it be so nice if that was crypto uh not really though because then you wouldn't get the upside but get the to buy the dip opportunities yeah yeah but like 14% And people are afraid that the world's over

like we're up six% off the lows we're up six% today just in Salon or eth probably but uh so anyway again nasac doesn't look like it's in it's still kind of in no man's Lane just like Bitcoin and E so there's nothing too exciting on any of these charts at the moment now can these continue to go up and like that will change everything sure like here's the one in interesting thing I see about ethereum for example is if we go to the monthly chart there's a chance that if we get above 2150 by the end of March so we've got what seven days here we're actually going to close back in the range so technically we just have a wick in the range and that would just basically mean that this whole scare below ends up being like a nothing

Burger you know you think about how scary this has been the last couple weeks people are losing their minds we've got people on our Discord that like I I'm thinking about leaving like this has been terrible and if if we just go up just $1,000 more and close by the end of this month it's like it never happened which is kind of wild Bitcoin I think though happened in February they did have a close below let me just check here real quick so we can see uh yeah so Bitcoin did have a close below so like we we're not disappearing from that that's some work to do which again makes me believe like I don't know that we're just going to go up and have this V shaped recovery to me it just doesn't really make sense on the technical side of things uh and then

like again if you just look at the way the world's looking and the way sort of macro's looking I'm not going to get into detail here but like doesn't seem like we've decided much yet right like we haven't really figured out the growth scare we still don't know are these tariffs happening or not like there's still just a lot of unknowns uh in the in the world um which just means like why would markets rip from here just I'm not just it doesn't really make sense because I want them to yeah yeah yeah yeah look I want them to too and I hope that they do I just um it's really important as an investor especially if you're going to try to like if you're trying to time things in the sense of like putting more risk on or adding L average like this just

because it's exciting to see green on a Monday this is not a time to do that right and I know a lot of people in this space some people did sell into stables and unfortunately what people do is like the moment there's any green they're like okay we're back we're so back and they just like they buy back into their alts and it's like guys I don't know this is the time to risk on we're not we haven't confirmed anything yet it's like you're still trying to catch a falling knife you might want to wait until we actually get confirmation that we're back in that range or we're breaking through that and we're on to our next leg up and we're just to me there's nothing to say that we're there just yet okay so uh how will we know when we are back and and better question is like

when is that gonna happen yeah uh look you'll know from from uh a bit of the market structure kind of like what I just showed here on price like do we get back in that range do we can we beat that 2150 on eth can we beat 91500 on um on bitcoin um and then like ultimately what's happening in the policy side in the macro side when those things get a little bit more clear then we'll know honestly probably Trump's just going to tell you like Hey we're back and then it's like okay here we go right um I'm going to do a full in terms of like the time frame of that I'm gonna do a full breakdown of that on Wednesday um for milroad pro members so we do live amas every week or every month and um I'm going to spend the

first 20 30 minutes of that uh for All Pro members um and that's in our platform so you have to be a PR member and you have to be logged in to see that in our community um and I'm going to break down my thoughts of like timing of this pullback here um and kind of how we're positioning for this so if you guys really want to get the insights there go pro if you're already Pro I'll see you guys on Wednesday we will record it so you can see it afterwards um but I'm not going to touch on that here because I got a little bit more work to do on that before I kind of put that thesis in action which will be on on Wednesday if you're only trading on centralized exchanges then you're not going to make it the best Traders know

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talk about the crypto growing up crypto moving from you know a kid to a teenager to it feels like we're having a bit of our adult hood moment right now uh really highlighted last week we had John deino head of institutional over at coinbase come on the show and the overwhelming bullishness that came from him and this recent survey they did surveying 30 352 uh institutional investors all managing an average over over a billion dollars it was just it was off the charts bullishness but then at the same time you have all this bearish Vibes in crypto well a big part of that is

because the bearish Vibes are tied to pumpamentals and the bullish Vibes are P tied to fundamentals let me pull up I know that this is a big deal because Kyle changes pin tweet Kyle's new PIN tweet KY what's your new PIN tweet what is the most important thing in ky's World these days I just think so it just as we are transitioning from a Vibes Market to a fundamentals Market allocate accordingly and there's a lot of reasons why I think this and and I think what you just said um with last week uh of the guy from coinbase that came on it just shows it like if you look at sentiment right now for retail investors sentiment is terrible if you're a meme coin Trader if you're in altcoins if you're just retail in general it's bad everyone is actually like it's so over

and if you speak to anyone in the institutional world and I know you're going to have um Yano come on I think you said tomorrow um who just had the Das digital asset Summit um conference in New York which was all about institutions in crypto and they said it was like the most bullish thing ever the takes from that were insane and I think it's very clear that the institutional world is really actually coming into crypto for the first time uh and they're finally being allowed to because of things going on with the stable coin Bill the market structure Bill we'll talk about that in a bit but like we're seeing the grownups come into this space and at the same time that actually we have apps and things in crypto that are grown up and they work and they generate revenue and they like have found product

Market fit um and so I see this world now where everything's always been about Vibes in crypto it's like hopefully we're going to get to a million TPS and hopefully we're going to have a trillion dollars in stable coins and hopefully this app is going to have a billion users and blah blah blah blah blah but we've never actually had any of it and so like for the last 15 years in crypto let's call it everything was just speculative it was like maybe this thing's going to change the world maybe ethereum is going to become the supercomputer of the world maybe Salon is gonna do this blah blah blah and we're now fining at a point we're like actually they are doing this stable coins are beginning to change the world right Bitcoin is a reserve in the US uh sky is giving the best yields in both in

crypto and in trafi like there are things finally now in crypto for the first time that like are actually coming true and making and that are better than the traditional world and we're starting to see institutions come in massively to do this both in terms of like integrating into their businesses like Robin Hood and in terms of like allocation which we'll talk about in a second as well so I think um we're starting to get a world where we're out of The Vibes market and into the fundamentals market now before we go into that there's another reason why I think that this is happening and um and why I have this pinned up it's not just crypto this is a thing that I think is happening let's call it maybe in the US I was going to say globally but probably more just in the US which is for the

last Also let's say 15 years since the the um the financial crisis back in 2008 we have been in pretty much a Vibes market right we've just been in a world where all we do is print money and we we go into these massive deficits and that deficit just gets worse and worse and worse and worse and worse right but we still have bull markets and we still have things that do really really well uh and a lot of that's just because we print a ton of money now that's not stopping don't get me wrong but when we look at what the new US Administration is trying to do and the reason why we're in this pullback now and why everyone's kind of so uncertain and scared is they are trying to shift from Vibes the vibe session you heard Scott bessent say this we're trying to get away from Vibe

session and we're GNA get into like a real fundamental economy and so one of the things they're trying to do is balance the deficit okay instead of spending trillions of dollars on nothing and wasting all this money like governments have done in the past let's try to lower our expenses via Doge and let's try to generate more Revenue this is through tariffs but it's also through trying to push a lot of the market from uh the like public market or like the federal government Market uh and and into the private market so right now a lot of the growth in the US comes from printing money hiring a ridiculous amount of federal employees that do all let's call it uh and just putting a whole bunch of money into initiatives at the federal government level which are a bunch of useless initiatives that don't

actually matter and so they've said Elon come in and get rid of all the things that don't actually matter let's get rid of all the employees that aren't actually doing anything and are wasting money and let's start to shift and let's deregulate let's start to put good rules in place for crypto and for Tech and for AI and let's try to look I know people are mad because they're firing a bunch people on the federal level but what they're really trying to do is move these people they're not just trying to fire them and like like that's it we don't care about American people they're they're giving them like nine months of of severance and helping them get into the private sector so their their goal here is let's stop spending all this money on the federal government let's shrink the government right and let's

let the companies in the US let's let them Thrive so they can hire a bunch more we saw coin bases hiring I think it was 3,000 Americans over the next year something like that um and they're opening up all these factories with open AI to try to do stuff with um with the AI side of things like they're trying to bring a lot more jobs that's what tariffs are doing too bring a lot more jobs into the US and so it's like let's move people from the government where we just fund this through printing money and let's put them into real companies that are not zombie companies that are building real things for the world and that is your like let's get away from The Vibes and let's move into the fundamentals and so if we're doing it from a government level an economic level a macro level let's call it what

does that mean for where people invest and I think what's going to happen here is earnings which already matter quite a bit in stocks they're going to matter even more here right um because you're going to have there's still going to be liquidity by the way I know everyone's all stuck on the liquidity chart chart that'll happen but it will happen because companies in the US are going to be taking out loans so they can expand and grow and buy more facilities and buy more factories and hire like crazy Etc but it's G to come from the public sector where they're actually going to make use of that money and so I think what's going to happen is instead of the the gme and GameStop stuff where those things just go to like $50 billion or whatever it was I can't remember the numbers back in 2021 that was your Vibes

market right everyone's kind of hoping for that to come back and I think what we're going to get instead is the companies that are actually doing really good and making money and like pushing their uh industry forward they are going to get higher valuations right we're going to Value based off earnings and it's very clear that that's what the the government wants they want to get rid of this Vibes market and like they just want to build and it's funny because that's happening at the same time that it's happening in crypto right like you can see a lot of people are just pumped about building real things generating real Revenue like we're starting to finally get to that point here in crypto and again with the regulation changing we can actually drive that value back and have real earnings to these protocols to their tokens so I think

we're shifting into this like from Vibes to fundamentals on an economic political level also from like a structural trafi level and then I think it's actually happening in crypto too um so I think for me it's a very exciting time and it's something that we've kind of been calling for a while we've always said look at revenues look at fundamentals look at token BuyBacks blah blah blah blah blah that stuff starting to finally play out um and even some of the strongest assets over the last month or two during this pullback have been things like maker right things that are making in a a has like been one of the best um look they're still down everything is down don't get me wrong but they're not down 90% some of them are actually even up like Maker's up 50% since the those February lows I was

talking about so we're seeing it in the numbers as well which I think is um to me is very very exciting I love the uh The Meta thesis that you're bringing today Kai uh you mentioned maker Sky we we really we really got to start start calling it sky and stop calling it I I we just need to make that accept that that trans I was fighting it for a long time because I thought that maybe it wouldn't actually go through but it's pretty clear that it's it's fullon now uh which which areas in crypto which sectors or which businesses other than than sky or we can talk about Sky uh are showing you real earnings and showing you real

fundamentals well first let's just think about this if we look at the last month and I think actually you have the chart you have the chart of the price for stable coins so when I start to look at what's going on in crypto right now we obviously in this very big pullback right 30% in Bitcoin uh 50 60% in you know kind of Majors like Ethan soul and even more than that in mcoins and everything else uh and at the same time it's like well what's actually happened here though if you look at the stable coin Supply it's gone up by like I don't know billions of dollars in that same time frame right so we can see that we still have like real adoption if you look at real world assets this number is up only as well it's not going as fast as stable coins are but Jay's got this

this chart up on the screen here and real world assets are almost hit 2020 billion here this is real world not including stable coins so like black Rock's bidle fund has jumped more than double in the last like two weeks right meanwhile prices are you know so bad in that time frame uh Fidelity just announced that they're launching a money market fund on top of ethereum and so what we're starting to see here is um we're starting to see real assets move on chain that's like you know in the last seven days we've had more than3 billion dollars US dollars go on chain right that's huge we've had billions of real world assets so private credit money market funds Etc start to come on chain and so what's happening here is real stuff is coming on chain forget

the crypto assets that we all love for a second like all these tokens and things like real valuable things are coming on chain I think that's really excited and then we see that institutions obviously like this are using this so a lot of that Capital lot of those stable coins are probably coming from things like Robin Hood which are using stable coins to like settle things in their business right um and so again with takeaways from from Das what happened last week to me it's clear that one institutions are coming on not just to like invest in this stuff and buy Bitcoin because the crypto Reserve they're coming into to actually use this stuff now most of that is going to be stable coins and then tokenizing their own assets right Black Rock tokenizing bidle fund that's just tokenizing things they do in the real

world right I think you're going to see tokenized stocks coming we've talked about that a bunch right so it's a lot of the trafi world is coming and saying I've got these assets I want them to be Global I want them to be permissionless I want them to move 247 right uh and so they're coming and they're putting them on chain and so we've got to rethink what's happening in crypto right now right because we're about to have this onslaught of new assets but not I mean we're also going to have a lot of Crypton native assets but we're having a lot of like existing real world assets come on chain so it's going to change the Dynamics a little bit here and so then the question is is like who's prepared to capitalize on those things right and as I think about it it's like

defi defi is capitalizing on crypto tokens right it has for forever but it's had to rely on bitcoin and eth and all these things right and those things are obviously fluctuate a lot and so defi revenues go up and down along with the price of Bitcoin and eth but now as you know stable coins and real world assets and eventually stocks all come on chain I think defi is also going to be there to capitalize on that because what is defi basically it's there's dexes which is the ability to swap and so of course when stocks come on chain or more stable coins come on chain you're going to use a DEX to swap those things right obviously a what's that for well it's to lend and so like am I going to be able to lend out my Tesla to get stable coins in return probably very likely right uh

and and then Sky which is your your stable coin provider with yield that is basically wrapping a trafi like yield and crypto yield together and putting it into one token into a stable coin it's like all all of these things are set up to capitalize on this like massive inflection point or ma massive influx of traditional trafy Capital that's coming on chain and so if I look at what are the what are the protocols and apps that are capitalizing on the crypto world and crypto adoption that's defi right they are the ones that have generated the most Revenue up to to date right before all this like trafi Capital comes on and it's like who are the ones to capitalize as the new capital comes in well defi again right and so you have these apps with product Market fit that are

generating real revenues and not only are they going to actually capitalize on like utilizing all this these new assets that come on when an institution comes in to actually allocate to the space where are they going to go what are they going to buy and maybe it's infrastructure maybe maybe it's meme coins but probably not but it's probably going to be the things that are generating real revenues right that they understand that are buying back their tokens and that they can use their own traditional assets with like you have up on the screen here Dan tapiero um who's who's commenting from stonie st's the head of a here's his tweet I'll just read it out real quick here but he says the biggest opportunity exists now for liquid funds with fundamentals based thesis less downside risk and their are

defi protocols with significant revenue and it's very early less than a tiny fraction of finan is on chain opportunities are fully democratized deal flow is public and D tapier who you had on the podcast I don't know maybe a couple weeks ago he's launching the 50t fund is that what it's called 50t yeah 50t so uh he basically says the same thing one of our focal points going forward in my fund five which is investing in liquid assets that have fundamentals and so I just think we're we're really reaching this inflection point for defi specifically because it can capitalize on the crypto world and this new whatever is going to happen in this institutional world it's going to capitalize on both and if institutions are going to use those things right like when I tokenize my stock and bring it on chain I'm probably going to go and use a

or what ever they're going to be familiar with it because they're going to use it also if you look at who's building the products for institutions it's like a just announced and they've just launched their new I forget what it's called but another protocol to go side by side with their a len protocol which is specific for institutions right you look at what coinbase is bringing in with these verified liquidity pools that's on Unis swap right so it's like it's on these existing protocols already and so um the other key thing I want to point out there is the there's lower downside risk is what stonnie said if you look at D5 protocols right now some of these are making hundreds of millions of dollars a year right and they're worth like a billion a billion dollars market cap some even lower and to me

what St is saying is there's not much room for these assets to go any lower there's no one left to sell these things it's not owned by it's owned by like a few funds that they're not selling and then like the teams and you know the founder that's been there for forever like these guys aren't selling this stuff and that's why maker when we put out a call to buy it at 900 bucks I was like there's there's just no one enough to sell this thing can only go up from here uh and and I think that's true for defi it's been beaten down long enough as all this capital is coming on chain I think defi is just set up to explode from all this so I'm really excited to see to see where this goes here which tokens and I mean I'm G to

make your make you repeat yourself a bit here but if if you believe in this fundamental thesis which tokens have the best opportunity obviously you mentioned Sky yeah look I think it's OG right now it's OG eum defi tokens right I'm not going to get into any names but anything that's like that's been around for a while that has product Market fit that's generating Revenue uh that H either is buying back its tokens or as potential to buy back its tokens like these are the ones that are best suited to capitalize on you know this whole onslaught of trafi people coming in and institutions coming in so I think that's a big thing salana defi we're actually putting on a pro report I think in maybe about two weeks from now um because they've actually had some good growth and they've got some amazing products

over there and um but they're they're more undervalued than ethereum and yet they've been growing faster than these ethereum OG defi products so like maybe there's some potential there but obviously more risk um so we'll have to see the interesting thing I think that's happening with these D5 protocols right now is they are becoming the next version of banks so like if you look at a for example it used to be just a like lending protocol but now it has its own stable coin it's got this like institutional arm that it's building for rwas like they're starting to Branch out and do so much more than just the one thing that they were good at and so I'm actually starting to see a world where all these different D5 Protocols are actually going to become the same thing they're just they're just going at it of

different ways maker started with a stable coin well they started with um let's say collateral right collateral for Bitcoin or eth and now they've kind of branched out to doing more now they're collateral with rwas and doing all this other stuff uh a was basically just a lending platform with eth and now it's again got a stable coin doing so many more things I think a bunch of these D5 protocols um are going to start to create more and more things and they'll end up becoming like the new version of a bank or a financial institution but it's all going to be on chain which to me is very very exciting and super cool and where there's just so much opportunity now most of them won't succeed at that but there's a few that will um and so again you just got to look for what are the ones that have

real traction here and why are why are these D5 protocols positioned to beat banks in the long run because the easy thing to think is to say well banks are just going to do it themselves and they've already got the consumers they've already got the large distribution yeah look obviously banks have an upper hand on distribution distribution is is probably the most important thing but I think um what what defi has is this like um liquidity right so they have liquidity and this robustness of their protocols that it's very very hard to replicate right like it's hard to build what a has built and then let it go through multiple ups and

down Downs with FTX collapsing and like all this stuff and show and have proof that like hey our code still works this protocol still works and we've continued to grow and we now have billions and billions of of liquidity in here right um and what these defi apps are building right now is they're becoming kind of platforms where Banks or fintech companies or other things can actually build on top of them they can integrate into them right they want they want to use that liquidity and that robustness of the code and that permissionless where Banks they're so far behind on that so like maybe they will I bet you some banks will try to do it some banks I think will integrate in and if you look like coinbase as as the best signal here they didn't try to build their own they instead just integrated into Moro

right I imagine we're going to start to see that with more fintech companies first and then probably bank companies second um but the problem is I think we need more um and this is what again obious trying to build Unis swap building Etc which is they need their own separate liquidity and so they're going to have to build verify like they need to make make sure that the people trading in the liquidity pools on uniswap for example or on a is not terrorists is not people money laundering right because there's rules in the US and maybe those rules change I don't know but ultimately um I think what's happening is you're seeing all these defi products start to build the the verified liquidity pools for these Banks and for fintech companies and for big funds to start to use that instead so I think that's where they're going to

go I think banks are going to really struggle to build their own a or their own sky like these are things where you need to move move fast you need to build you need to ship and it's like that's not what banks are known for right so um and then also the other thing you can think of is and this is more longterm is like you know baby boomers obviously are never going to use a okay most of them but their capital is beginning to transition into the younger generation into the 30-year olds right baby boomers the largest demographic in the world they have all the money they have most of the money but they are all now like 70 80 and working their way up right and so they're beginning to die off and so they're beginning to give their money to their children or their children's

children right and where are those people putting their money they're not putting it in Banks I don't have a lot of money in a bank right and I'm 35 but not most of my money is not in a bank it's in finex like wise for example or in like Quest trade or in my crypto wallet is where most of my net worth is right um and I think most 30y olds and younger are going that way it's in PayPal it's in you know whatever and so I think um Banks aren't going to have that distribution for for much longer uh and so yeah we'll see what happens maybe one day these uh these D5 protocols buy Banks I don't know we'll see for the distribution let's uh let's clip that uh that projection right there and celebrate that a decade from now Okay so

we've we've got this we've got this overall shift happening where we have real fundamental businesses in crypto that have real Revenue that are not getting the attention that the pumpamentals The Vibes businesses get and they have real buyers coming from Dan tapiero of the world the large funds that are looking to that're they're fundamental based funds look these funds one of the numbers that really surprised me from uh the coinbase episode was that uh 30% of these um institutional investors hold Doge currently so it's not like they're not investing in meme coins but they they're fundamental based

funds they have they have certain mandates in how they invest and what they invest in and they can't just go they're not like you you or I and we can just go invest in whatever we want they have to be investing in things that have real Revenue because that's the way they invest and so that shift is happening those buyers are coming and what does that mean for if if you're a crypto investor right now what does that mean does it mean you need to step back and look at your portfolio does it mean you need to learn more about Defi and these more like boring companies I'm going to put boring in air quotes and start to understand that well so first this doesn't mean that the Vibes Market is going away right if the fundamentals

Market does well there's going to be people that then make money from that and they're going to go punt it and dumb so like The Vibes Market will never leave so everyone who's saying memec coins are dead that's that's completely wrong right that's a lot of people as investors they they're either black or white and it's like we always are in the gray Air there's never black and white so like there's no it it is or it is isn't it's it's just in between right like meme coins are here they're not here that's not how it is they're just they're either overhyped or they're underhyped in the moment but they're still here and they're always going to be here right um so I think that's like a clear thing everyone needs to understand it's like when I say this people are gonna be like well look

freaking fcoin went up you know 50% yesterday so you're wrong and it's like no like it doesn't mean I'm wrong it's just like I just think we were so far on the memec coin World in whatever that was November December whatever it was and I think fundamentals now are going to have their moment and they're going to be more long-term they're going to have less volatility likely at some point here but you'll still have these meme coins that are you know you can probably do things with now um as an investor you probably want to learn the boring stuff too right um I know that maybe that's not exciting to you but boring is actually better for investing you want to go in the boring world because the boring World means you have a lot less downside um and then it's also like when I think about where is

the next amount of capital coming into crypto right everyone's waiting who's the next buyer I say this every time on the podcast and sure there's going to be some retail that comes in but if we're going to have trillions of dollars come in from institutions that retail doesn't have trillions of dollars right so like where do I want to put my money I want to be ahead of that trillions of dollars of institutional Capital that's coming in and I'm sorry but that's in the boring stuff it's not in fcoin so and especially now when everything has gotten crushed back down to these low levels it's like if you're starting from the very bottom which ones do you want to be in and for me it's those that are generating revenues that are doing you know that have strong Network effects already and a product Market fit because

again that trillions of dollars institutional Capital that's where they're going right uh and so it just makes so much more sense now you can still probably gamble in the in the mcoin world and you're going to do fine uh or I don't say You're Gonna fine you could do fine if you happen to nail it uh but that's just a lot harder world and I don't know does it does that memec coin world come back to what it was before that I don't know I don't have a strong opinion on I do have a strong opinion and I do know for sure that defa is changing the world and it's changing the financial system so I know for sure that there's something there do I know for sure that mcoins are going to have the big comeback or is it going to be like nfts right now again nfts are not

gone either this is not black or white as I just said nfts still exist but if you were here in 2021 nfts don't exist like they did then and they probably never will right um they will exist in different forms there'll be little mini pockets of nfts that will do well same thing with mem coins will we get what we just had last year not sure maybe I don't know but maybe it's just Pockets maybe it's just small things of of the the gambling people right like I don't know so for me I want to go to the for sure thing and for me that that's that's the part of crypto that's actually building and like solving you know problems in the real world I want to finish on uh this uh I gotta find this this this tweet from uh from chth because I think this really captures

the what you should be doing as an investor which is in this tweet he says uh that he shows a chart of large cap domestic Equity Funds underperforming the S&P 500 underperforming so these are full-time professional investors and funds who spend all their time trying to to get great returns and in 2024 65% of them underperformed the S&P 500 so what does that say it says that go trading meme coins is you're probably you're going to try to be a Trader and you're going to try to find the next big hit you're probably going to fail it's probably not going to work what's going to be the best take

the simple way and be patient and what does the S&P 500 move off of earnings so there is a chart I don't have it up right now and I don't know where it is but there's a chart that shows like S&P 500 earnings and S&P 500 price and it just follows it perfectly right and so as long as there's more earnings in companies the S&P 500 goes up that's just how it works works right and so again if you just think about you know the way this works if you want to hold longterm which I know a lot of our our audience does you've got to hold long term in the things that are going to be here long term you hear a lot of people say just hold just hold just hold but like just holding xrp or just holding fcoin might not be the right case but

just holding things that are generating more and more revenues month over month or more like quarterly or yearly over year and continue to build and continue to like create new things those are things you just hold right the things that keep getting adoption but the Mad thesis of just hold cult tokens like memes I don't think that that works I don't think that plays out you can't compare that to the just hold of the S&P 500 in the NASDAQ right it's th those things have moments but they're very short-lived but if you find things that are actually building real fundamental products and they keep iterating keep growing then those are things you just hold like the best thing you could have done to capitalize on the internet and

the adoption of the internet was just hold the good companies from 2000 to today if you just held Amazon Google uh Apple Microsoft and Facebook you absolutely crushed it just crushed it right but that didn't make sense for most other companies right and that's because most other companies their revenues went downwards at some point they sure they might had a bunch of Revenue when they launched and then it went down from there and if you just held that thing you got wrecked which is what a lot of people do in crypto right they buy something it gets attention it gets some revenues and they think okay this thing's fundamentally strong here some AI thing that whatever there's a

couple people using it and then they turn off their token incentives and it just goes the attention goes down and its revenues goes down and it's gone right and that happens a lot in this space and so if you want to be a long-term investor you got to think of the things that actually are going to keep building and iterating on themselves year after year after year after year after year and I'm sorry but mcoins are not that and so again are you a Trader or you investor what are you trying to do here so that that that idea of indexes outperforming most funds is very very true right and it is a smart way to to deal with investing in crypto as well it just again it has to be the right ones I I tweeted out this thing on um on the weekend I think it was and I

was like you know it's funny for the first time so for you know years probably seven years I'd say actually we have been saying the institutions are finally here the institutions are going to buy our bags and they never actually did they were never actually here they never really showed up right 2017 everyone thought it was gonna happen with the icos they never actually showed up last cycle we were like institutions are definitely here they were not here right we got wrecked and for the first time it's like today institutions are actually here but what's funny is most retail people aren't holding the things that institutions are going to buy and so it's wild that everyone's finally at this point and you can see it by sentiment most of retail is actually like starting to leave they're like I've been in crypto person for a long

time and I'm out because this sucks now I'm not making any money and it's like they're going to leave just as the institutions actually start to buy our bags but I think most people are just holding the wrong bags that's the problem Mike Dro I I got nothing left that's it's is there's no the the fundamental thesis is is so strong right now the opportunity is so clear and unfortunately not everyone will do it I I want to know okay every everybody listening in here's what I want to know I want to know what are you holding and what are you not sure about holding and I don't mean like don't give me your whole portfolio like what are you long-term holding what's your long-term conviction and what tokens are you like yeah I think I'm going to long-term hold this but I'm not sure comment wherever

you guys are watching and let us know and we get a little conversation going on which one should be long-term hold versus which one shouldn't Kai thanks so much for joining us today very welcome I love the thumbs up I love it I love it thanks for listening everybody have a wicked awesome day we will see you guys back tomorrow with Yano talking about D takeaways as always if you liked today's episode please hit subscribe and make sure you follow us you don't miss out on the next one there's also a link in the description to our free five minute daily newsletter where we simplify crypto for you while making you laugh and if you're willing to step up your crypto investing game we're going to also leave a link for milk Road Pro you

get access to our portfolio where you can see exactly what we are buying this is your number one resource to help you invest successfully in crypto one final note this show is for educational purposes only and nothing we say is financial advice investing in crypto or any asset is risky and you should never invest more than you can afford to lose thanks so much for listening in my friends have a wicked awesome day