Why Is Crypto Crashing? | Weekly Roundup

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Unlike other cycles, like we've never had this amount of adoption. Like an option's all-time high. Prices are at two-year lows or approaching two-year lows. And that's that's what hurts the most here. Like in in a scenario FTX, you're like, "Yeah, there's a lot of dumb that we did as an industry, you know, certain players that just it's warranted, but now it's it's uh it's harder to reconcile the adoption with the price action." Nothing said on Empire is a recommendation to buy or sell any investments or products. This podcast is forformational purposes only and the views expressed by anyone on the show are solely their opinions, not financial advice or necessarily the views of Blockworks. Our hosts, guests, and the Blockworks team may hold

positions in the companies, funds or projects discussed. Ladies and gentlemen, welcome to Empire. I was late. Um, it seems like every 10 minutes Bitcoin's going down by a,000 bucks. Rob and I are not market oracles. Maybe Rob a bit more than I am, but we brought in Josh because Josh is here to tell us if Bitcoin's going to hit 60,000 by the end of the conversation or if it's going to rebound at 100K by the end of the month. >> That's right. And then uh yeah, if it does, I might I might disappear forever. You might never see me again. But >> there's a lot of that happening in this space. But Josh, for for anyone that's been under a rock and not doesn't know who you are, why don't you give us a quick background and then we level set the conversation. Yeah, absolutely. Glad

to be here. Uh I am co-head of markets at FalconX. FalconX is a prime broker trading firm in crypto. Um we service a lot of hedge funds, institutional counterparties in the space. Um we do a lot of things from OTC trading spot and derivatives. We're swap dealer regulated by the CFTC. So we do a lot of options activity uh on crypto underliers. Um and then we also, you know, facilitate direct market access to various exchanges. um provide financing, all that kind of stuff. >> So you're basically from your standpoint, you're seeing a lot of the flow, a lot of who's selling, who's buying, you know, who's stepping in, who's leaving, all that stuff.

>> Yeah. Yeah. It's it's a privileged position to be in, you know, like the sort of centralized dealer seat. I think a lot of counterparties do rely on us for liquidity, for access, um, for market commentary and, you know, an aggregation of a synthesis really of like what's happening across the whole space. Um, and yeah, like we we get to kind of help distribute risk, right? That's sort of like the function of any dealer is just like um help concentrated positions get distributed to the market in the most efficient way possible without disrupting things. Um these days there's forces bigger than us, right?

There's uh just a lot of retail rotation away from crypto. There's all this sovereign flow and all that kind of stuff. I'm sure we'll get into it, but um yeah, we we try to stay, you know, front and center for our counterparties. >> Josh, is um how big is Falcon X uh on a relative basis? Do you think you're the biggest dealer, the third biggest dealer? Like how how big do you are do you think you are relative to the space? >> Yeah. Yeah. I mean, look, like unfortunately, compared to traditional markets, crypto is like pretty opaque, right? There's no like public reporting on this type of stuff. Um, I I think we're generally considered top three at this point. Um, we uh we do get involved in all the major kind of um derivative flows at least on on blocks. And uh there's there's channels on Telegram.

You can search for them and you can kind of see like large blocks that are printing on chain between dealers and um and large funds. And so that's uh that's probably one good way to track and measure our market share, but we're usually in the mix there. >> Awesome. >> Uh well, maybe maybe we should start like Josh, just give us the state of play. Like what is happening? I think Bitcoin is down 25% on the year. It's down another 7% today. Silver is down uh another 10% today. Gold's down 2%. NASDAQ's down 2%. Uh we were just talking about this, but uh Blue Owl uh is down uh I think two or six% today and is down uh significantly over the last couple of weeks. Seems like there's a lot of things that are both

cryptospecific and non-cryptospecific that are flashing red lights. Uh and so I'd love to hear like from your perspective what's happening. Well, how much of it is crypto specific? How much of is related to like October 10th? And then you know how much is you know maybe more macroeconomic or you know other types of you know uh extrinsic factors. >> Sure. Sure. And you know, these are the types of um kind of bombardments of negative news and catalysts that usually result in bottoms, right? Um we're seeing just a cascade of really really bad things. Um from everything from like really notable people and market participants leaving the space. Um there's just general kind of negative sentiment around um you know,

technologies that have been built in crypto over many many years. uh you know the the Ethereum road map for instance and like even questioning you know the fundamental um architecture of things like Bitcoin right like with with all of the questions with uh quantum computing and things like that. So, um, on top of that, you have just a series of negative flows away from crypto. You've got retail that's generally packing their bags and leaving for, uh, greener pastures like equities and, uh, metals and really chasing that really parabolic run that we had last week. Um, at the same time, the sovereigns, right, you look at China just stacking, you know, thousands of tons of uh, tons of gold

basically, right, in reserves. Um and then on top of that you have Tether which is really a crypto native institution also buying a lot of gold right um in favor of of uh gold in favor of uh Bitcoin right so that's uh that's really what's driving the dynamics and it's um it's a combination of flows it's a combination of these um fundamental overhangs like the quantum question um and yeah I it's it's weighing the entire space I think liquid managers that we trade with are positioned very defensively at the moment. There's really only a handful of names that can be held in these portfolios with any duration at the moment.

>> Um, hype has been a notable outperformer. I think you know just you've discussed on your podcast many times with guests that um there's this rotation to revenue, right? the revenue meta um tokens that can be sustained through buybacks or other means that uh revenue revenue generating means um there's only a handful of names in crypto and everyone's hiding out in those names. That's what we've observed. They're very concentrated but at the same time um they have been actually performing uh relatively well relative to even the majors.

>> So um yeah that's that's kind of what we're seeing. everyone's kind of pointing to like high 50s as a point where they will dip their toes back in and start accumulating long positions. Um >> it's probably that that probably means that we'll bottom ahead of that. But uh so maybe maybe you know low 60s this podcast will get there. Uh >> yeah, >> for some of for someone that's not in your seat of seeing all the flows, um what are some of the indicators around like options or implied ball or that you can say like we just said okay that the low low to mid50s are something that the market's kind of looking at like for for a retail guy like what can you look at to understand that?

>> Well, yeah. Yeah. I mean um crypto options are a reflection of just market demand for protection and and the uh the fear that's embedded in the market right so we've seen V levels rise from historically low levels um in the last two to three weeks all the way up let's call it like 10 points uh 10 15 points in the front of the curve. So the front is implying something like mid60s V um and the back is still let's say in the mid50s but that's coming off like a very uh low level of you know let's call it like 40 V flat across the curve um prior to a lot of these recent sell-offs um and the the low level of implied V prior

I think is just a good indication of um lack of retail interest low levels of all the basis spread between Bitcoin futures and um the funding spreads on pers relative to spot price were all at very compressed levels, right? So that all indicates there's just not a lot of people still trading levered instruments in crypto. Um all of this is obviously on the back of what happened last year in Q4 where just a ton of leverage got blown out um on Binance and Hyperlid and and many other levered venues. So um it's still we're still dealing with the fallout of that I believe.

I mean, I started writing about like my bare like just being very defensive in October uh and then November and I've just been not I don't feel like I'm getting paid enough to take this amount of risk on liquid side. Um but you know from from your standpoint like coming into the year like is was there anything positive that would have compelled you to take on put on more risk? um what would have to change for you to really meaningfully like go out of on the risk spectrum cuz you're seeing a lot of value destruction not not just in crypto like you know silver is more volatile than a meme stock um you know SAS is massively der like rerating

like markets just are very jittery right now and want to go down um negative headlines carry more weight like why why take on more risk when you sit in treasuries and just, you know, you know, hide there for a while. >> Yeah. Well, I mean, not even just treasuries. Almost every other asset class has outperformed gold or Bitcoin in the last couple of weeks. Um, I mean, if we just rewind towards the top of the year, like you'll remember some of the key talking points that people had for Bitcoin, right? one one being uh you know turn of the year there will be um a alleviation of the redemption outflows of 2025 and there would you know be a

new influx of capital subscriptions into funds. Now, I think some of the recent headlines that we've seen like different liquid funds um you know spinning out or you know reconfiguring I think that kind of like speaks to some of the challenges right now in the space in terms of fundraising and being able to kind of like deploy into these discretionary liquid strategies. Um so that point is sort of off the table. Um another big point at the start of the year was this idea that you know the DATs which had been a big driver of flows in 2025. Um there would be a lot of pickup in activity from um well either you know MNAPs improving uh or uh some kind of like activity across these stats um

maybe M&A type activity or activism activity. I think that has been slow to play out so far this year. Although you know you can kind of see that a lot of smart thinkers are thinking about it. you saw the Matt Lavine uh article this morning did the tape um just talking about the the potentials for activism in the space. So there is capital looking at it but it just hasn't materialized in a way that people can buy. Um, another area that people uh point to is just this stark stark divergence between Bitcoin and gold. Um, and actually Bitcoin and um global measures of liquidity like central bank liquidity, right? Um, that is obviously all benefiting and flowing into gold and not into Bitcoin. And just like we've said

in the last couple minutes, like it's it's it's really widened um now and not really compressed. um it's not uh played out the way a lot of fundamental um macro guys are thinking respect to Bitcoin. So, um, >> there on that point, there's all these like now trying to conspiracy theories come out when prices don't do what you want them to do, right? Tom Le of the world says that this is a feature, not a bug. He's lost billions and billions of dollars for his investors. Um, you know, believe me, bro, this thing is going to go up. Moon math, all this kind of garbage comes out. uh Novo comes out saying, you know, hey, there's like uh there's like suppression uh by the old guard that doesn't want to see Bitcoin, doesn't want to see crypto thrive

because it, you know, stable coins are hugely destruct, you know, going to eat into their interest income. And so there's all these kind of weird things that no one can quantify that are suppressing prices. There's also like the more kind of probably cynical view here which is dude crypto continues to be a very like farther out on the risk spectrum and people feel pain in their portfolio. The marginal buyer is not there. So just assume that there's a ton of ball. Write it out for 10 years. Anyone that's written this out for 10 years usually comes out ahead.

And don't make it 100% of your book. like you know as much as Rob is you know an investor in the space he personally has stuff outside of crypto and that allows you to be a better investor but anyways >> I I invest only in dragonfly funds so that's it the only thing I invest in >> insert clip of I bought ET last week but no I mean like you always said like all these what's your take on all it's like you know and give us >> you know >> and Josh I'd like to understand one thing from your perspective too is We're talking like you're talking a lot about a lot of like very I think like you know uh like trading specific like you know quantitative type measures right but like if I just like zoom out for a sec right like you know if puts out ify uh

who's the founder of of winter mute puts out a post yesterday that you know he essentially says that you know talking about like economic activity on chain is pointless because it's not really big enough for it to matter to anybody. He's like I he doesn't think stable coins matter because like you know again it's like really small relative to what's happening in the broader market. I think he's being pretty unfair there but like you know >> 10 trillion of stable coins >> that's more than master combined like you know that's not nothing. >> Yeah he's he's being pretty unfair I think on on the stable coin side. He talks about how like CME doesn't matter.

He thinks Bitcoin has lost you know any reason to exist other than number go up. So he comes out with this like extraordinarily bearish post about like this. He's like he thinks that the market and like the the space is in a good position for like you know adoption of certain things but also he's just like extremely bearish on like all things token prices and you know there's been a lot of discussion around that and there's been a lot of discussion also around like just like micro structure like did 1010 and like the blowout of leverage just like completely screw the micro structure and that's the problem and so like how do you think about it from like what is like structurally fundamentally that something wrong is is happening here or it's just you know to Sant's point like it's high risk and you

know we're it's a more volatile industry and like where the whole market is kind of you know showing signs of weakness uh during this you know kind of volatile period. Yeah, look, I mean this happens every cycle. Like I think people are doomsayers at the lows always. Uh and yeah, of course he's right on many points. Like um our industry is still relatively small um compared to the broader world of traditional finance and payments and all that kind of stuff. But um yeah, that's not to say we should be dismissive of it, right? Like I mean just Rob like you and I have followed some of these trends in the last couple of years that have become like huge world changing um phenomena like

everything from prediction markets which were broadly dismissed by the general public you know five six years ago as being completely irrelevant and like with no volumes and now just you know being plastered on every um CNBC and CNN screen um >> and grocery stores >> and grocery stores everything um A lot of crypto bros are going to be walking out of that grocery store. >> Yeah. Yeah. >> Got liquidated. >> I I mean, we've all been in the space long like we we remember like I I remember, you know, talking about like Arthur back in the day when he was trying to pitch BitX and perpetual swaps as a tradable instrument in crypto. And everyone like would, you know, was extremely skeptical. I was like, well, we there's a liquid spot market. Why do

we need this thing? And >> I mean, everything just takes years and years and decades really to play out. And yeah, we've we've we've all seen it happen many times in crypto. And and and by the way, like I do think that >> um >> all of this stuff will be an overhang in the short term, but as soon as you know like uh price leads narrative, right? We all believe that in crypto and crypto is the most reflective reflexive asset in the world. Like once price starts to turn, like all these things will pick up again and then we'll all be believers again, right? In in the tech. So >> it's it's funny because I um we didn't talk about this at the beginning but uh you joined Falcon X through an acquisition of your prior company called Arbellos uh which Dragonfly and myself

led the investment into and I sat on the board of your company >> and I remember you and I had lunch. It was January of 23 I think >> in uh uh and like a like a taco stand or something. Uh, and it was like right after FTX happened and we looked at each other and we were like, is this space like cooked and we were like, no, we believe that the space is is still it has a reason to exist like we think that there's a lot of, you know, secular tailwinds here. We think that the technology is going to be used for tokenization and stable coins. We talked about all this stuff back then. Uh, and you're like, I want to start a business that just, you know, is a better institutional transparent dealer than what we saw with FTX and and otherwise.

Um and you know that kind of played out and now it feels like we're having this like same exact discussion again like you know four years later three years later um because of how volatile that the space is. So I I I do to your point like for those of us who have been here a long time it does seem a little bit like deja vu uh it just happens with like Bitcoin being at a higher price. >> Yeah. >> The the the the thing that I I I feel like is going to be more painful is that you're seeing adoption, right? I mean you have 10 trillion of stable coins settling in January. I mean that's amaz on real utility you're seeing a lot of enterprises you know we've talked about at length here so unlike other cycles like we've never had this amount of

adoption like adoption's all-time high prices are at two-year lows or approaching two-year lows and that's that's what hurts the most here like in in a scenario FTX you're like yeah there's a lot of dumb that we did as an industry you know certain players that just it's warranted but now it's it's uh it's harder to reconcile the adoption with the price action. Um Josh, I want to ask you I I was thinking about this uh yesterday and even today like you know Google posted like record earnings and it's down 6% entire SAS like in a prior life I was a SAS analyst and like just looking at that just makes me wonder about like how do markets react to new information like like software as a service being totally

repriced because of the AI risk right you're taking uncertainty if you thought a business was going to compound at 10% a year you feel like you can you know that business is durable AI comes along and no one really still has priced how much does this change the game for software as a service. And by the way, not workday is not the same as HubSpot, but the market in this moment where it reads the the quant reads a headline SAS uh disrupted by AI runs through it in their model adjust the growth and then says oh trim risk and because it has really tight parameters and I think a lot of it the market's in index like it's just passive.

So you have these like violent movements in the market. I I feel like the market is just becoming more violent. Uh it's more connected but it's more violent. Uh and it's at this moment like in SAS for instance the market is still trying to work through like what is the implications of AI and by the way that might take a couple of quarters. And I think where the most amount of money is made is when you have a strong view of like look Snowflake and Service Now are not going to go away. The market's like treating it like trash. It's not. I'm going to put in step in and buy. translating into crypto like what are the catalysts like you know are there particular catalysts that you've seen um or people that are really smart in

understanding when when stuff like this happens they just really step in uh Bitcoin whales like there's a there's an address on Twitter that just tracks Bitcoin whales right and they're like oh Bitcoin whales like oldtime Bitcoiners are stepping in to buy what is it in crypto market structure that you say okay that's a really smart buyer like They they and what are those guys doing right now? >> Yeah. I mean, I think the smartest buyers in crypto are the crypto native players with the deepest balance sheets, right? Like, and a lot of those are players that have been in the space from the very beginning and, you know, maybe did token sales or whatever. They accumulated huge cash balances and they pick very selective points um in price

action to like start accumulating again, right? Um, I mean, I think one one name we can all agree is like relatively smart money is like Tether, right? Um, we, you know, we kind of follow like what they do and how they're thinking about crypto markets. Um, and they have a lot of assets to deploy into the space. Um I think they've uh yeah, you know, I think more recently they've sort of thought about maybe diversifying their holdings across to RWA, but um yeah, those are some of the players like I mean there there's others in the space, you know, like the um uh like the block ones, like those types of players who've been in the space forever and kind of seen multiple cycles. Um yeah,

it's it's those folks with like billions of of of capital um to deploy and are are aren't afraid to kind of like take swings on liquid. >> Um >> when you say when you say liquid, is it historically well to what degree is it now just concentrated in Bitcoin? Uh because that you know I think the marginal buyer for Bitcoin is stronger and but the marginal buyer for anything else other than Bitcoin is weaker. >> Yeah. because it's retail or momentum shifted to AI and >> and like and like other instruments maybe that or crypto like crypto equities. Just trying to think about like where the marginal buyer is today where it would have been in prior cycles

that would come on chain is no longer coming on chain. >> Yeah. >> Or is that just an over extrapolation and like the the buyer eventually comes on chain? >> Yeah. No, no. I mean, I was actually thinking about what your your thesis around um software names and I I actually think that the story here is um does the availability of substitutes um of substitute assets outstrip the growth in uh capital and liquidity. Right? We we can all agree there's a lot more money slloshing around because of expansion of of uh balance sheets, central bank balance sheets and um you know fiscal and monetary policy across

the board. I would say uh does that outstrip the availability of substitutes? And when you talk about software names, what that really means is like is AI increasing the ability of companies to replace and substitute vendors with, you know, something they build with claw, right? Or or something like that, right? Um for crypto what it means is like uh everyone's there's like you know a million new meme coins that launch a year right and everyone is you know there's a million there's you know let's say 20 new major token launches that are sucking capital out from uh their competitive set every year and um the question is is that dilution and then let's not even forget the dats

right the dats like the hundred of data hundreds of dats that launched last year as sort of like substitut utes for um uh deploying into the token markets themselves. Um so now there's this mass dilution of investor attention across so many different things and then you have macro phenomena like gold ripping and silver ripping. Um you have you know very compelling narratives in equities like rare earths uh and you know quantum and uh AI you know what what have you all of these sort of major themes happening that are really going to change the way uh global power is distributed and all of that's just

sucking attention away from crypto. So there's only going to be a handful of things that can really retain investor mind share. And so to your point like Bitcoin has to be >> the one that that wins in that category, right? It has the longevity and the ubiquity. I mean anyone in the world can trade it now. It's accessible through every investing platform through every sort of like mode and medium. Um and then yeah and then the you know then the the the main questions are like what is the set beyond that that can really like also have some durability through the next cycle and it's probably things like hype with with with of revenue. It's it's maybe things like Ethan Salana that have had branding uh and awareness around them built up over many years of

market dollars and all that kind of stuff. So yeah, I think that's but but you're right. It's not going to like all coins are fundamentally broken. We all agree on that. And um the >> well there's nuance there but but but but like like I I do agree like uh Jenny's observation is something the reason why I started in version like we just don't have durable demand for anything other than speculation and um you so I want to brute force that by acquiring stuff uh and integrating the tech but like you know you could also argue like hey how do I go along the stable cocoin thesis Rob you think about that every day right I mean you're seeing you're seeing a ton of stablecoin interest and growth And uh you know on the private market side like pretty

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blockchain technology involve risk, terms, and conditions apply. I mean, I think there is like to to the question you asked earlier, you know, is there dilution happening? I think there's no doubt about that. I mean, Josh has kind of said that, right? But there was this um uh there was this Jason Choy tweet yesterday that was like showing like developer activity and like AI versus crypto. And basically um crypto developer activity kind of peaked right around right before FTX and has basically been kind of like down since we had a little bit of blips or whatever and AI developer activity has basically went straight up and to the right and they actually crossed the more people were you know committing code in AI

applications and um the more than crypto starting around that period of time when FTX went under and like I look at that from like a venture capital perspective and like it's very clear to me now that marginal person at Stanford does not care. The marginal kid at Stanford does not care about crypto anymore. The marginal kid at Stanford, he cares about AI, right? The marginal developer cares about we've had um a number of like, you know, high-profile defections out of crypto. I mean, there was um I believe just yesterday u uh Nater who who was at um I believe he he was at uh where was he at before this? He was head of growth at at one of the big ETH protocols, >> Celestia. Uh no no no no he was at um uh he was at IEN I believe right before

this. >> Yeah >> and yeah yeah and you know he just left cognition right and you know this is somebody who has he basically put his entire life into crypto for like you know like a decade right and we're seeing like a lot of that happening so there's dilution there and then there's dilution on the the public markets because you know all of a sudden you look at what what's happening with like trade XYZ on hype right and that you know the you know one day silver did a third of Bitcoin's volume you know all of trade.xyz at XYZ and the hip 3 markets did a third of all hip uh hyperlquid volume in a single day. Like there's more people even in who have capital on chain trading commodities than and that's where like retail interest is right now because like people have been excited about these

other reflexive assets like like the reality is is like these retail investors sort of don't care what the asset is. They care about the refle reflexivity, right? And they care about leverage. And so like if the reflexivity and the leverage is is able to be had in commodities like they won't trade the meme coins right like they will trade what they think they can get um where they can get that and so I think it's both the retail but bid it's happening at the private markets I think we should talk a little bit about there's a couple posts around like basically the death of cryptovc we should talk about that a little bit and then there's um just you know now the institutional interest is okay we'll buy and hold Bitcoin ETF but it's you know Maybe it's Salana, maybe it's ETH, like to to Josh's point. But

like, you know, you look at a I was you look at a lot of these other altcoins and like there's even if they have ETFs, even if they have DATs, there's not really like an institutional bid at the moment because it's not clear what that story is. And I think it's even happening. I want to make one last point, which is like I was on a board meeting this morning with with one of our portfolio companies and um they were actually asking me around like should we still launch a token, right? And this is a company that um they're you know in the stable coin space. They're actively um have revenue. They're uh you know doing you know hundreds of millions of dollars of monthly volume. Uh but the story was always around being more of a protocol and having decentralizing and having a token and they're looking at me

and they're saying we don't know if that is the right move anymore for us to go like raise new venture capital. Like should we you know like who is the right you know capital partner for us in the future and like should we even have a token? is that actually bad for us, right? >> Um, and I I think there's until I I think there's a really clear story or or a clear reason why people think that. And there we have to get some sort of regulatory clarity act type market structure bill passed that says, hey, a token can have some sort of, you know, equity type or like at least going to acrue value type of of structure for um we to get like a mass like institutional type bid in a bunch of these altcoins.

And I think that's a, you know, kind of what's overhanging all of this. >> Well, the I definitely agree on on the on the, you know, clarity on regulatory stuff. Josh, I think you mentioned um I think the market's not dumb around like uh let's talk about like deepen. For instance, we're talking a lot, you know, with with EV3 guys and SL, there's a whole overhang of tokens that just have codified their tokconomics and those projects are not going to necessarily catch a bit if you have a new project launching with like a cleaner slate of tokconomics. And so if you kind of um look through that, you say, well gosh, like you know, you definitely don't want to be exposed to legacy tokens that just have broken tokconomics and need to restructure it on chain and maybe it's

not going to be as easy and needs to pivot and stuff. Um there's there's a couple of things that you mentioned, Rob, that I think uh be worth just double clicking on. um the developer interest and deflections like it's a little bit like LP like fundraising right people want to give you money when you shouldn't be investing and they don't want to give you money when you should be investing um we've talked about like fundraising is always extremely hard it's only getting harder across asset classes um Josh maybe from your standpoint like are you seeing new signups on the desk like new institutions come in and be like hey where'd that guy come from they never traded crypto they're coming in um because because often times like a a

working theory that we've had here as a group is there's now new smart money coming in on the private markets. You have fintech investors like participate in rounds like Rain uh and others that we haven't seen since prefx. Uh so clearly interest in in in getting behind the stable coin super cycle. Uh but on the liquid side just from your standpoint not the fast money cuz dads I think were just hedge funds like you know arbing away and even the Bitco book was like very much hedge funds like just kind of momentum driven but are there characters that you haven't seen in a while show up you' be like huh that's interesting that that's that's a very

strong signal of people stepping in not the tethers of the world that have always kind of stepped in and are smart money but like just new players that you haven't seen >> like Have you seen any new player in the last six months that is interesting? >> Yeah. Yeah, we we have we have it's not it's not a complete wasteland over here. Um so I would say this >> that's not what I was suggesting. >> Uh I would say the actually this is maybe a little surprising like the category where we're having the most constructive conversations and where we think there's actually a real path to uh growth uh in in the business is in the banking sector. So, but this is you have to understand, right? This is like after

four or five years of conversations with major, you know, G SIBs that are now starting to move in a meaningful way towards setting up custody, you know, setting up like trading lines with firms like us. Um, they want to start expanding the product set beyond um, you know, just trading cash settle derivatives uh or CME futures. they really want to do meaningful things like putting it into um their private bank portfolios uh and you know distributing it through um warehouses and RAAS and stuff like that and I think all that took a very long time because obviously we've only had ETF approval for what a year year and a half right and that was

always on people's minds is there going to take like it's a it's a sequential path to getting this stuff into people's portfolios and now we're at that on that path like we're we're basically ically getting to the point where product sets are getting more complex. um the choice and variety of things is is becoming more um interesting and because the profile of the risk profile of the asset class has changed too right it's now no longer this sort of like I only want upside linear you know it's got upside convexity all that kind of stuff now Bitcoin is like okay well it has had some upside convexity it's also come in quite a bit it's now rangebound maybe I want to get yield on this product like black rockck just announced this sort of yield ETF on Bitcoin

where they're going to sell options on iBit, which is their own linear product. Um, so the variety of things is just is is picking up enormously. Now, if you're talking about just like smart money in crypto, what are they doing? I I don't think it's come in yet where they have started to pick the bottom and accumulate Bitcoin again. Um, in fact, I think it's a little bit still a defensive um trading posture for most of them. like we've actually seen quite a pickup in across the board of um liquid funds trying to do spread trades. So that would be things like you know long Bitcoin short alt an alt basket. Um that has worked really well uh actually in Q4

of last year obviously worked very well. Um now it's starting to level off that trade but it's still something that people are thinking about. they're being conscious about asset selection and really picking what they think will be winners and being short other things against them. Um now the and then the other thing I would say this is like a natural evolution of 1010 if you think about it. Um this migration towards like more regulated players um more exchange setups that are not autoquidating, right? So like that was the the crux of what happened was there's just embedded in crypto this sort of weird thing that doesn't exist in any asset class which is like a major operational risk which

is that if you have a flash crash if you have an oracle uh update that's a really bad print uh you could get liquidated on your entire position without any recourse and without even the ability to step in and meet a margin call even if ample funds available somewhere else right so >> uh that risk is being mitigated across the board and I think that in migration towards like dealers. Um so maybe that's kind of why you have a pickup in interest with banks and stuff like that. Um it's it's also a migration towards more transparent platforms. That could be that could mean a CME, right? Or it could mean like >> or it could also mean like hyperlquid, right? Which is like arguably more transparent. Yeah. I think the

there's always been a convenience premium in the space uh in you know uh grayscale you could argue you know there's a whole slew of players that said I don't want to take the technology custody risk you know can't do it but uh I'll I'll buy it and and there's a massive premium then that you know got figured out to some extent and with the ETFs but I think they're still in a state whether because Rob, as you're saying, the regulatory piece or some other thing like there's players are just going to continue to benefit from the convenience factor. Um, one of the things that uh, Rob, you said earlier that I think it's just worth also double clicking on is um, like um, there's a pocket of crypto

that has been I mean with crypto's been in a tough spot before, you know, you know, since 1010. Um I don't know how much Josh you have insights into theories of 1010 and you know there's a lot of interesting posts coming out of that trying to do a postmortem but Metallic had a pretty interesting tweet on L2s that was kind of something that people kind of well understood and people kind of were talking about it was broken value acrruel L2 tokens haven't performed that well um is there any have you seen anything interesting percolate over the last 24 48 hours around L2 tokens or just in general that you know is there an irrational player out there

that is bidding L2 tokens? Uh maybe an A16Z out there who just wants to defend the position. >> Did did you hear anything about uh L2s after Vitalic put out this post? Like >> did I what? Sorry. Oh, for Josh. Yeah. >> Yeah. >> Uh yeah. So there there hasn't I mean we we just haven't seen it translate into into major flows in such a short period of time. Um but yeah I mean we we're obviously following that very closely. I mean it's it's it's shocking just to see like uh what a U-turn in thinking there from the leadership but uh you know I mean and it's also you know it's like one of these things it's like price uh

price leading narrative right? Um, if you've got this type of um, price action on on ETH and on L2 tokens, it's inevitable. >> Josh, what is the last time you saw real buyer interest come across your desk and, you know, one of the major relatives? >> Um, >> never. >> No, no, he's definitely seen it before. >> There's some there's some. It's It's not Look, I It's not just LT like I don't want to single anything out, right? It's just like there's not a lot of interest in going be beyond like let's say the top five tokens really just across the board.

>> But let me ask you a specific question on that. Right. So there's >> Rob, may may I remind you that you have L2 exposure and for the sake of my bags, your bags and the state of the industry. No more questions of this nature. >> No, no, no. I I have I have exposure to everything. Number one. Um, >> no, but I I guess the question for me is a little bit more around like I guess is there something I can pick out of this, right? So, yeah. So, you don't have the there's no interest in the L2s. Okay. Well, um, I think Vitalic basically said like the L2s should go and become L1's like in some sense. I mean, he didn't quite say that, but like he kind of said that, right? And like I think there is some story here around like he he even

talked about the app chains and how he actually like it kind of likes the app chains, right? And that's like something that I think people for a long time have been um uh very against in a lot of ways like oh we have to be decentralized and we have to be not um opinionated and I I've long said uh that being opinionated as a chain is actually a very good thing right because you to now compete you have to be able to build an actual business on top and and we've talked about this a bunch Sante but like you know Salana runs like a business right like their BD team like their executive team they run like a business Ethereum doesn't have that right because it's very different type of organization.

>> You mean Tom Lee is not the chief marketing officer? >> Not Mr. Mr. Beast is the chief chief marketing officer. So, uh, number one, >> not a bad >> No, but but but then there's also So, there's that story, right? But then there's also like the story of like, okay, well, like Athena did $350 million of revenue last year, right? And now it's trading at $2 billion FTV. The token hasn't performed well. We I, you know, we're we're the largest investors in Athena. I love Guy. I think it's a it's a great project. Um, and now I look at that and I'm kind of like, well, now it's actually kind of trading at like a SAS multiple, right? And like, is it that, hey, there's no interest in these things at all? Is there no interest in these things at the multiple? Like, is

there an idea that like, okay, well, things with revenue will do well over time, but they need to rerate. Like, I'm just trying to figure out a little bit if it's just like, hey, like people are just like closing their eyes off other than I guess Hyperlquid because of how much trading volume it's doing to the whole space. and it's just like, okay, well, I look at Coin Gecko and there's like here's the top 10 and like I pick those things or if there's like people are actually like going down and like picking names uh that are like these are actually things that deserve to catch a bid and that we want to be long-term invested in. >> Well, they they will I think those investors will come back, the fundamental guys in token liquid token space, but this isn't the be doing that.

>> Well, that that's something interesting you said there. This isn't the part of the cycle to be doing that. There's a lot embedded in that statement, I guess. But the I think the again, the markets are not dumb. Um, I would say, you know, I got a lot of a lot of heat for just coming out with like price to, you know, P ratios and price to revenue ratios and comparing that against SAS stocks. Look, no metric valuation metric is like perfect. It helps you diagnose like certain inefficiencies in the market saying hey why why is a free cash flow yield on SAS like four and MX7 and you know how do you make sense of that and what's the growth and it's just a useful comparison uh I I will say like on there's certain

apps like like the L1 is in my mind just cooked like it's just it's way overvalued like um and and you can't justify the fees and you're just paying like for for it's very lofty multiple uh and the valley cruel is broken but the market still doesn't care right I mean like Ripple as an example just probably the smartest of the L1's because it just has never showed revenue so just keep it like that and just you know keep keep selling the dream um but um but one of the interesting things is like if the market's not dumb and I don't think it is like should we see if you think about a pair trade like if you want to go long middleware or long DeFi short L1s because like most of the revenue is

actually being produced at uh like an Athena, some deepen protocols, some uh DeFi projects, hyperlids of the world like that's where like the real activity is and they have you know stronger connectivity with the user but like other than hyperl it's like been nowhere. Defi since I left Parapi has just basically been down only relative to ETH um with some notable like rare exceptions. Um, is is there like is that just a generational setup that in 5 years time you're going to get paid handsomely or is the market just saying wait a minute here I get it but not all revenue is created equal and this revenue is subject to speculative flows and speculative flows are just not going to come to F Jenny's point. It's just

like the momentum is elsewhere. It's an AI and I don't see it shifting anytime soon. So at least the L1's have brand and mimemetic power and just you know people like the the convenience factor is is easier. You can buy L1s, you can buy Ripple pretty much everywhere and not everyone can buy Geonet or Helium or Hivemapp or like putting aside just the tokconomic piece. Uh I my my view is uh you know there there will be a sharp uh dichotomy between tokens that have real ties to revenue and that mechanisms to create um you know positive price action from that

I would say like buybacks or whatever whatever else you have um or even just staking yield right something that passes value back to holders um I don't think like I and Rob hates this analogy when I when I use it. It's just like I I do think that this kind of like an NFT moment for all coins generally, right? Because like most balls are really just like some kind of NFT. I mean, it's it's really like a fractionalized NFT of some idea. It's like an idea is like, okay, uh we need this high throughput chain, right? We need something or you know, we we need like this privacy enabled uh perex or something, right? It's just an idea. All right, I like this idea. I want to own a piece of this idea. But

unless it really generates revenue and it funnels that revenue back to the token, it's it's broken fundamentally. And like I don't know if NFTs will ever come back. So then why would any of these like fractionalized NFTs which are called altcoins come back? Um that I don't know. That's that's kind of my >> Josh hates venture capital. That's what I'm hearing right now. He's he's decided venture capital is a bad business as and and Josh and you know just so we're all clear Josh that you two might be the two most active angel investors maybe with like one other person that we know in crypto history. Okay. So like >> how many investments have you made?

>> I I don't I'll say this this past few years not many at all really >> was inver was inversion one of your last. >> Yeah it was one of the last. one of the last things. >> There you go. >> Yeah. >> Well, what I tell people, Rob, is like, yeah, I made a certainly a lot of like number of investments. It doesn't mean like number and ROI, two very different things, ladies and gentlemen. Active can be good, but doesn't mean much uh if you don't produce uh >> point. Should we um should we talk about like what is actually probably the biggest news in the space uh this week which is uh Kyle Sanmani leaving Multicoin?

>> Oh >> yeah. Um I mean Santi you've known Kyle for a long time. I don't know if you perspective on it. >> Well yeah look um I tweeted about this yesterday. I saw the announcement. Um so I first reached out to Kyle I think it was late 2017 early 2018. Um I I'm a competitive type and I saw him getting into a deal and I was like who that who is this guy? Like why get in first? Uh and and I was I was like trying to understand who this was. So I I I go to his site and I start reading his research and uh I learned a lot from him. I was like okay this guy is like is clear thinking like anyone that can write well I think is is just a signal of first rate intelligence and and he's very bold. I remember having the first

conversation. I'm like, I don't know if I love or hate this guy, but he's but he's clearly thinking differently and making me think in ways that I hadn't think before. And back then there was a lot of like what seems obvious now of like, you know, there was a lot of gospel in the space, but not a lot of like actual first principle thinking. And Kyle's always done that, right? There's a couple of key lines that Kyle always says. is like, you know, reasoning by analogy is like very flawed, you know, and um he so so I I I think it was one of an early LP at least in 2018. And it's interesting because for a while there I was like I really questioned the thesis because it you know it underperformed it and underperformed relative to other funds. I was an investor in some other funds too and you

know at the time I started paraphy I'm like you know what like I just I don't I'm not seeing it. Uh so sort of like contrarian for the sake of being contrarian doesn't mean anything if you can't put numbers on the board and then and then boom you know he he had done an investment in Salana and and I think like ultimately I I I hedge my investing career by investing in multi so he's at some point this guy has a higher probability of catching something that I don't and he's probably going to see something and has very different views than I do so it's worth kind of investing and it paid out big that's probably one of the smartest things I ever did. Um, and so I mean he him and Tuchar work very well.

I think they have very different ways of thinking. I think Tushar is going to continue to run or be he's not stepping down. He's going to continue at the helm. Um, so I have immense respect for them and I look I think they they took it if you're a port like now that I'm building inversion like having a partner that I've seen them interact with portfolio companies. constant feedback that I get from founders is like not to make this a multi-coin shield, but it's like these guys stand behind and they will they will just be unwavering support and that matters a lot, right? And and um so I don't know what he's going to do next, but I mean incredible run. They were early in Salana, double down, stuck to it, not afraid to voice his opinions by any stretch. And it's like I think it's like one of those rare

qualities that you need to have I think in investing which is especially in in crypto which is very vocal and stuff is like you know you don't necessarily care to be liked and you're just in the pursuit of like the game and like he I think he embodies that. Um and you know uh but yeah I I haven't reached out to him. I don't know what he's going to do next. I think he's going to stay as the >> chairman of Forward Industries, which is a salon. >> Forward Industries. I know he's been curious on other technology spaces like you know he's a cryp he's a techno curious person though he's invested in like biotech like the mammoth like DNA company health uh last time I caught up with him he was like training for like a

triathlon or something. So anyways um I don't know what he'll do next. I I don't know if this is him throwing in the towel saying, "Look, I've had a great run." Multicin maybe has grown to a point where he can't produce the same returns. Um, you know, a lot of a lot of good investors have like started their own family offices and just transition to a different structure. Uh, I could see that. I could see him going to AI or sail under the horizon, you know, build a family or something. >> Great. He's going to go to AI, too, right? We can just we talk about everybody at AI even even even Kyle Sani. So, um I I think there is um >> Yeah, >> go ahead.

>> No, I was going to say like do you I don't know if you've spoken to him, but maybe >> not since I haven't spoken to him since he announced. Um you know, we Kyle and I probably speak, >> you know, uh I don't know, once a quarter or something. Um I have a ton of respect for him. I I think he's um to your point like very curious. I think the point that you said which is that like he's always been unafraid to be wrong, right? Or just believed he was right in the face of everyone else thinking he was wrong which is something that I I always respected a lot. I think they were probably the one other investor in the space that we felt like we tr we were very comfortable being contrarian. Uh and I think he is he was probably the only investor I would say

is more comfortable being contrarian than us at least in my mind right um and you know that Salana investment in trade is probably the single best venture investment like you know but maybe one of the single best invest venture investments of all time um and so yeah great great run for him. I I do think it was interesting. There was this I actually didn't see it, but then I saw tweets about it that there was, you know, a tweet that he had put out that he got deleted that was basically like crypto is just not that interesting to him uh anymore um or hasn't been that interesting to him uh in a um in a while and blockchains are ledgers. But um you know, it had me thinking again about just the thing we were talking about

earlier, which is that there seems to be a lot of high-profile defects. There seems to be a lot of, you know, early true believers who don't seem to be believers anymore. I I think, you know, there was another post yesterday that um from um like a well-known kind of anon about like the death of cryptovc and it just strikes me that we're in this period where even relative to like post FTX more people than ever seem to be losing like their conviction. Um at a time >> Yeah. But at a time >> adoption is working prices going up. >> Yeah. But at a time when like you know I I I we there's an investor that I can't name but who has an a deal that we just we a series that we just led who literally has not done a deal in crypto

since 2021. Iconic Led Reigns deal right like there are there is more appreciation for what we do in this technology in Washington at the regulators at in Silicon Valley than there has been in years. And yet, >> yeah. Yeah. Maybe ever, right? And yet the all of these crypto people and a lot of them have become rich and so maybe it's just like, you know, they want to do other things are seem to be losing faith in a way that they hadn't in a long time. And I >> um and it and for for myself as someone who's been here a while, but hasn't been here as long as as either of you guys or or or Kyle was, um it's it's very interesting thing to see. uh especially

as I see these people as also competitors and my my competitors seem to be kind of >> you know moving in different directions. >> Well, this goes back to there there's two like I love sport analogies Kyle. I'm going to have to make an analogy if you're listening. >> Yeah, I never agreed with him on that. Like analogies >> by the way because people understand it through analogies, right? So, but Kobe Bryant um said something that it it rings true, right? which is when he joined the NBA, he said he understood that he was going to win championships because he said, "Most of my other peers were checking out. They had signed multi-year contracts and they're they're in cruise control. They didn't care. You know, they hedge. They're they're set for life or maybe not because they spent a ton."

Uh, and he was like, "I I did the opposite. I worked harder. I showed up at the gym twice a day. I'd stay true to discipline because I love the game and I'm not doing it. In in fact, when you remove the obstacle of I don't need to do this to put food on the table and I could I fix that part of my livelihood, I can play the game in its purest form and you never retire. I mean, I've seen so many of my friends in crypto since the early days that thought that all they wanted was just to make that their number and then just say, "That's it, man. I did it." and then they they check out for a bit and then they want to come back. And I always tell them it's almost like when you're in middle school and high school, you feel like you can't

wait for summer break. Two weeks in, you can't wait to go back to school because you miss your friends and but it's hard to get back in the game and you lose relevance. You lose sometimes lose your mind around this process. Um but other people have done it really well like you know you just develop an interest in photography, just bird watching or whatever. Um there's another post uh uh about Jookovic who he hate like he came to a point like tennis I think is like a very psychological sport and I think at one point his co he was like I hate this game and his coach like reminded him of the early days of him in his childhood of like why he picked up a racket and every time he plays a game he now goes back to that childhood memory of like

loving hold a racket and he developed a love for the sport. All this to say is like crypto investing is extremely hard and anyone says it's easy it's like dude it has so many other layers of complexity like liquid venture just think about that for a minute it's incredibly complex um and how do you value that and the cost and the security risks and so I got to hand it like someone like Kyle probably is like listen like you know it's am I getting paid enough to do this or can I just do it with my own book I'm still going to invest in crypto and you know but I just want to do it through my own capital base and pursue other interests. And I could see that happening and I I respect that. But Josh, as someone that has been around

the space for a long, you you know, you've been successful, like what keeps you in the game? >> Wait. And when was your first when was your first crypto job? 2016. >> Uh 14. 14. >> 2014. >> I worked at back in the day. Yeah. Um well, yeah. First, I I did want to say a few words on on Kyle and um Tushar. Like I think I mean they're they're two um investors in crypto. respect enormously. I think a lot of people don't know but I mean those two guys both like my career and a lot of people who have worked in the trading industry in crypto like a a lot of us owe our um longevity in the space due to them you know both because they are you know one of the largest active counterparties in the space um but also because they are extremely

generous with their time and um you know sharing ideas and thesis and um they're always like really committed like Rob said to the space. Um I I I remember in you know post FTX like in 22 I mean I think that their venture fund was maybe one of the very few funds in the space that were willing to take bets on Salana Entrepreneurs right like with with Cheeto and a couple other deals in that time in that era and um that paid dividends for them enormously. So, um yeah, it's and you know, if I can if I think back on all of my conversations with um Kyle and Tushara and the team over there, like the one thing that

always struck me is their optimism for the space is always like how can I structure this trade to be more convex, right? Like I want to capture more upside. And it was never it was never about hedging. It was never about downside risk. And maybe that's just the nature of like my dialogue with them as an options guy, but it was always um it was always how how can I structure this to get more convexity and and then over time right it became like well the fund is this big I needed to make an impact on the fund returns like what can I do to to to have it be more meaningful and maybe that's to your point too is just like at some point you know you get to a certain scale um you've been so successful that you kind of have to sit

back and think like is you know if I want to make a big impact act or hit a big trade. Uh how how can I do that more effectively in maybe a different seat? So yeah, >> I was looking at uh the the just on that point on on fund size, I was looking at uh I think it was Sequoia India vintages and the first fund was like 68 million. It their DPI is like uh 8x or nine. Every other vintage like the the AUM and I think it's five or six different funds after that like grew an order of magnitude. So 600 million or so and of course like timing of course some of these funds are still harvesting or will begin to harvest but there's a degradation in returns and a fund like benchmark has stayed consistent in 300

million and I don't know if that's the right number for crypto. I don't know what the right number is. Um but I certainly just it's it's the laws of physics. Uh the fund the larger you are it naturally comes with a return degradation. Um, and especially in crypto where I think the opportunity set may not be expanding as much as we probably thought over the last seven, eight years. Rob might disagree with that, but I >> I do disagree with that because it just it's more specific, right? The opportunity the amount the opportunities are narrower but larger.

>> Fair enough. like I I I would yeah I I think you could say maybe some of these funds their competence is not in that specific vertical and so therefore if you were managing 500 million for a generalist fund that invest in L1's only or historically that and you miss stable coins then and or you don't have fintech knowledge then what's your edge you're just going to underperform. I I appreciate you um continuing to to make this an advertisement for Dragonfly.

>> God, that's just a layup, not just because you're a lead investor. God, Rob, every opportunity is is every everything just comes there's Josh Fish play a game in this pod of like at what point does a conversation come back to inversion or come back to Dragonfly and like I don't understand why people keep listening to the pause, man. >> Call you out. I mean, this whole podcast is an ad at this point. >> Yeah, I hear. Um >> um Josh, so you didn't you didn't actually answer the final question and maybe we maybe we need we need a little bit of optimism here which is like >> why have you stuck in in the space? What keeps you excited getting up every day?

Yeah, I know you don't have to go to work. >> Why do you still I had a draft week that was going to go out, but Kyle beat me to the bunch. >> He's like he's like I'm literally quitting tomorrow. This is my final thing I'm doing. the the uh the joke that I always make is like I'm unfit to do literally anything else. Like I I've lost all of my marketable skills being in crypto for this long. Um but I mean the real answer is like uh I I don't know if you guys know but I I actually did spend some time like outside of crypto uh post circle. eventually went back to work at a bank to do like some systematic equities trading and I just realized like that market is so slow and oified and market structure doesn't really change that much uh yeartoyear

um sure there's like exciting things that happen and pop up once in a while but it's like once in a decade right um changes and in crypto the industry that we're in it's like the way that um we make money as a firm actually today is is different than it was 6 months ago and different than and that was different than 12 months ago. Uh it's it's always a new thing. It's always a new category. And I like being in seats where I'm always operating at the frontier of what's happening. And that doesn't mean we don't build like a durable business by backfilling, you know, things that are becoming commoditized with automation. But like what I want to do is actually just service, you know, the very uh frontier of what's happening in crypto. And

that's that's also why I'm optimistic in the face of um you know banks trying to build crypto practices and stuff like that. Um I just think that there's value in having like a nimble dealing desk trading firm that you can interact with, people that you trust uh that you know can give you access to things that no one else can. So yeah, that's that's my advertisement for uh Falcon X. So >> loved the advertisement for the space. >> Yeah. a lot of things to still be excited about.

>> We talked about earlier, >> not to not to squash the optimism, but look, I always I've been playing around with Claude and I whipped up this idea that I've had for a while. Rob's like, "Jesus Christ, why are you not spending all your time with immersion?" I am, but in the I I I did this little experiment that will be my content of the week. And I want Josh, since you're the guest here, I want you to run through this exercise. It would take 45 seconds, but I think it forced the discussion. Rob, >> you and I played this game sometimes during this podcast. So, I figured it would be something along the Salana Western Union trade that I'm so much up here.

>> So, Josh, you're going to answer a series of questions here. >> Okay. >> And you're going to tell me which one you pick. >> It's like a Tinder, but like what would you rather own, Apple or Tesla? >> This is what you're spending your time on. Is it Tinder for equities? I got it. >> No, it's private. Privates, too. Crypto, too. >> Oh, privates too. Okay. All right. >> I like this. Uh I I think just Tesla for the sheer uh uh addressable market there. >> 100% correct that you're consensus. Visa or or or JP Morgan? >> Uh uh JP Morgan.

>> Okay. >> Wait. The the majority is coming from where? Like what where is this spooling from? >> Uh so so I trained it. So it's responses. I think we've gotten like 5 10,000 responses now. So it's it it um >> Got it. So this is based on like this is like hot or not basically. Exactly. Yeah. Yeah. >> Yeah. Okay. >> It's called FTV, of course, fully diluted value or a play on Deep >> I love this. >> By the way, I I play this on the desk all the time. >> There you go. So, you know, >> Rob, if immersion doesn't work out, we'll just monetize this. >> Yeah. >> Josh, can I come and sit on the Falcon X desk one day? And >> A lot of people have asked uh for like guest passes, just sit on the desk. I I

think we should do it. We should open up like >> Well, also as a Falcon X shareholder now, I feel like, you know, >> Yeah, >> Rob. Okay. You can always sit behind me on a stool and grab me coffee whenever you want. >> Uh, >> back to the game. Don't deflect, Josh. Stripe at 91 billion or Dogecoin at 16. That's easy. >> Stripe for sure. >> Okay, Stripe. Good. Contrarian, XAI or Chain Link. >> Oh, >> very different valuations. >> Wait, wait, wait. Can I just say something? We We just like brush over the fact that 75% of people that you have given this to said they'd rather own Dogecoin than Stripe. That's >> ski is crypto native. I guess >> that is that is insanity. Okay.

>> I know. >> So on this one, I mean I think I would go XAI. >> Okay. Yeah. No, especially merge with SpaceX. >> Bitcoin or gold? The ultimate >> uh Bitcoin. Yeah. >> All right. This is this is definitely crypto specific because the last one you just did too with with uh XAI and Chain Link like it was like very heavy chain link >> as well. So you got you got like too many crypto people here. Yeah. Al Alphabet or Microsoft? >> Alphabet. Yeah. >> All right. It's down 6% today, I think. Silver or Visa?

>> O. Uh, Visa. >> 50/50. Well, >> Nvidia or AMD. >> I'm not qualified to answer. I'm just going to say Nvidia. >> Okay. >> All right. Sante, I feel like this is like, you know, the type of podcasting we should not be doing. So, like I, you know, >> No, I know. Well, not not none of this financial advice, but uh but we'll run through this quick. Is it 10 more? Berkshire or gold? We'll go first. >> Uh Berkshire. >> Okay. >> Yeah. >> Ethereum or gold? Easy. >> Uh yeah, Ethereum, of course.

>> Oh. Oh, jeez. Thought you were going to say gold. I clicked there. Walmart or Amazon? Got eight more to go. >> Uh Amazon. >> Okay, good. Mastercard or Visa? This is very easy. >> Visa, >> Rob, you you can chime in here. I feel like you feel neglected. >> You can you can help out. Help a friend. >> I mean, V Visa is very clearly like innovating much more quickly than Mastercard is. >> Netflix for Ka. >> I'm gonna say Netflix.

>> Okay. Bra. >> Yeah. Sass. Sass is Sass XRP. Rob, you're gonna have to recuse yourself from that. >> I will. >> I mean, this is hard. I'm gonna say uh I'm going to say XRP. >> Yeah. For the memes, man. Mastercard or JP? Oh, >> 51% Avalanche. Nice. >> Uh JP. >> Okay. Plat or Tik Tok? >> Tik Tok.

>> Four more to go. Tik Tok. Okay, >> back to software here. >> Silver or Bergkshire? >> Berkshire. >> Well, you're still like a Birkshire stand now that you know these guys as old as they are. >> A piece of America. Do you do you believe in America or No. >> Okay. All right. I do. >> Meta or data bricks? >> It's a good one. Probably meta. Bitcoin or Bcher? One, one is rad poison, the other one is not.

>> Wow. Uh, >> Bitcoin. >> Okay, last one. Stripe or silver? Easy. >> Stripe. >> Okay. You're a growth chaser. >> Yeah. >> 60. Is that true? >> Yeah, of course. Aren't we all? You've matched 65% of the consensus view. Only two out of 20. You're against the crowd. Your risk appetite is low. >> Yeah. Listen, I will tell you, I'm in a few group chats with Josh. Having seen how Josh invests and trades. I mean, we're like, listen, we're we're all in crypto and so like we're all obviously chasing some sort of growth, but there's probably nobody who talks about downside risk in any of my crypto group chats

more than Josh >> and who and and he does a really good job of like he's like, "Oh, I'm up 30%. Let me get out of this thing." Like there's nobody else in crypto who like is like, "Oh yeah, I'm up 30%. Get out of this thing." >> May maybe the the ability to be a growth chaser. You have to think about downside. If you truly understand downside, you can really chase growth and just, you know, go at it. >> Listen, you're not as successful as Josh without uh being able to, you know, think about, you know, both both upside and downside. >> I think Santi is a lot more successful than me. But uh yeah, no, I I would say like this last year has been humbling for me because I I think me and like other people who have been in crypto for

quite some time because the convexity is just completely sucked out of this asset class. And so it's like you do have to take profits aggressively. Um you can't just like sit on in assets and wait for a 10x. It's like you'll bleed, you know, because you'll bleed like 90% while you're waiting. So you you may maybe you get your 10x but then you're back to flat. So it's it's brutal this uh this market. I have to rewire myself. >> Truly. >> All right. Should we uh should we do content of the week? >> Content of the week. I did mine. So Josh, >> that was your content. >> What?

>> That's my content, man. You know, >> I'll send it to you so you can play in the spare time and, you know, just share with your non-crypto friends so we can have that. >> I love that. >> I I also I think you can add to that. You could have it like predict your you know, my personality type and all that kind of stuff from there. I'm gonna use it for for hirings. Like I think it was like the tiny guy who created like this like shrink of sorts with like Claude, which that is. >> Yeah. >> Um, by the way, do you guys do I don't know if you can disclose or not, but like when you hire traders, how much of it is a behavioral interview?

>> Because like you need to like weather your emotions when you're like you need to have a strong emotional foundation. >> Yeah. Uh it's it's not like a we don't have an administer a test or anything, but I spend most of my time trying to gauge people's uh response function to different types of stresses. >> Fair enough. >> Yeah. >> Okay. What's the content? >> Oh, uh one one thing I've um it's because of all this quantum quick scare stuff in crypto. I've been rereading some of um David Deutsch's uh books um like Fabric of Reality. um that I mean they're very geared towards lay people obviously um but really uh talks about

like the metaphysical implications of quantum computing like multiverse hypothesis and stuff like that um and also talks about you know like what what are the applicability uh uh kind of how can you apply quantum computing to solve hard problems um and you know I think we were so focused on Bitcoin we're like oh this is going to break everything but it really only can solve like a subset of things, right, that have this sort of like exponential um uh embedded into it. So, and and you know, the the sort of like uh signature generation stuff in crypto obviously falls into that category, but a lot of things don't. So, yeah, it's kind of interesting. Um I I used to I studied computer science in school, but I

haven't put it to real use in quite some time. So, it's interesting. >> All right. But I Josh, you don't know this uh cuz I don't think you've you've listened to a ton of our podcasts. Um which you're going to change now, but the uh I always end up having the like, you know, u the fiction or like you know the fun things, you know, and so but this week it's non-fiction because it's just Olympics, Winter Olympics. Okay. Winter Olympics started yesterday. We got some curling today, some mixed doubles. We've got some ice hockey. You know, >> you strike me as a curling guy, Rob. You strike me as a guy that sits down like with a die cold looking at curling up all day.

>> Uh listen, I will tell you I love to have like stuff like that. Listen, >> that's a market. That's when you know the state of the markets. All you need to know if you you listen to anything is that Rob is sitting there with Diet Coke watching curling. >> Here's what you should know about me. Um, I like to compete and if you if if we're competing at flipping a cup or if we like throwing a stone on some ice or competing at like trading or competing at investing, I want to win. And so I like the pe best people in the world doing whatever it is they're doing trying to be the best in the world at things. So I just like excellence.

>> So sorry. >> No, no, no. Listen, that's why I picked >> I hope I hope that is the start to this. I hope when Will cuts this. It's I like excellence. It's just the start and that's the that's the front. So >> that look I get it man. Curling is one of those um there is a oh the content there's a documentary called the strife that um in Kitsel in Austria the downhill skiing the amount of force these guys need to have and I and I've seen them train in in my gym like there's a couple of Olympians there. It is unreal the amount of power they need to have. Um it's a great documentary.

The strife is like that famous downhill in in Austria. People have died in this in this corner. Um it's a very well done documentary. It talks about obviously the history of the Olympics, the sport. Um yeah, it's pretty pretty uh pretty good. It's happening in Italy, Milan, Cortina, and Pesa, right? >> Yeah, that's right. >> Okay, that's good. We'll have to tune into that. I'll put curling in the background while I see the markets bleed. >> Josh, uh thanks, man. and thanks for joining. This is a really good really good discussion. I think it's very timely. So, uh we should have you on.

>> Yeah, it's always a pleasure to chat with you gentlemen. Uh thanks for having me. >> Thanks, guys.