Why Is Everyone So Bearish? | Weekly Roundup

Transcript

there's only three options here this is the start of a bare Market this is a pullback in a bull market or uh this is the end of a four-year cycle I feel very convicted that this is not a bare market so let me just like on the record like this is not a bare Market 20% chance 30% chance that like foure Cycle's over and like a 70 or 80% chance this is just a bull market pullback this episode is brought to you by scale the next evolution in layer one blockchains explore the gas free ecosystem at scale. spaceco and follow their Journey on X scale Network thanks to scale for making today's episode possible what's good I much it is it is

one of those um one of those weeks like just months it's felt like a a blur like the time it's like the best it's like the best it was the best of times with worst of times like I'm looking at my timeline and it's the polar opposite like on one end I'm seeing incredible headlines like the SEC dropping pretty much every suit for every company um you have major companies like Robin Hood stripe black rock like doubling down like Bank of America Brian uh the CEO just talked about yeah and then you look at the charts and I don't I'm not I don't look at price I have zero time to like to look at charts but I could tell just from the timeline in crypto and so it's very uh it's very negative out

there isn't it it is extremely negative I mean the fear the fear and greed index which is kind of a pithy you know index obviously but it's like it is kind of telling it's a it's at 10 out of 100 which I haven't seen it that bearish since like Luna Black Friday of no even Luna was like higher than 10 I think it was like Black Friday of covid basically or black Thursday um wow yeah I mean it's it's dark out there I tweeted about having fun and people were like who the hell are you to tell us to have fun like even like okay even someone like you know what surprised me the most Eric Vorhees what did Eric he I saw a tweet recently says like I was feeling depressed about the markets and then I

remember that Ross is free like heart emoji Zoom I just don't get like why people are depressed let's jump let's jump into the market so like right now um I should have pulled this up beforehand but what's Bitcoin so bitcoin's at 84 um soul is down to is it still at 140 130ish 137 right so Soul's down 50% bitcoin's down fif what is what is that math 15% um yeah I mean people are just panicking on the timeline um what do you think first off what do you think is causing the prices to do this um I think there was like uh I think we talked about in in in that last

pod which is Trump the mcoin launch Melania Malay and the bid hack like the culmination of all that just was kind of the last push uh look tradition markets are also down like so we can read a lot into Trump and the sucking of liquidity um and exposing what you know has been bad in crypto for a while um but uh yeah markets have also been really soft uh you know there's there's macro worries there's uh tariff concerns um you know uh I I went coming into the year thinking that Nvidia is going to be the single most important thing to watch this year and you know they it Nvidia hasn't performed as well so um like I'm not a

macro expert like I can't explain or pinpoint like there's correlation what's causation like I don't know but like objectively like zoom out like when Bitcoin was like at 50k and you would told me Hey listen like if in 12 months it's at 85k you would have been like oh you know that's great great that all day it's always like the anchoring effect it's like you have to reset like well you expect this thing to go up in straight line seriously how like even someone like Eric like how many [ __ ] years have you been in crypto it's just like you don't expect things to do just up to the right um it's been a phenomenal two and a half almost three years now in traditional markets like you can't expect the market to

continue to go up indefinitely yeah I thought tur um I remember tur tweeted this tur to me who like I feel like a lot of new entrance in crypto don't know him but he was a he's a bitcoiner back in the he's bit he's bitcoiner and runs a fund and stuff I I I just love this it was uh back in November right around the election he said newbies will be adamant that 100K is the top and most likely make Bitcoin sales that they'll deeply regret beware the wall of worry nothing goes up in a straight line we could go to 110k then back to 80k and then fly to 200k and and then he just quote tweeted it and said we had 86k today and it's just a good reminder like they're um if you think about the I think the closest comparison in my mind is I okay

so let's talk about the big question on everyone's mind it's is the is the fouryear Cy there's only three options here bare Market it's a bare Market this is the start of a bare Market this is a pullback in a bull market or uh this is the end of a four-year cycle you kind of got to select one of those things I feel very convicted that this is not a bare market so let me just like on the record like this is not a bare Market um maybe 20% chance 30% chance that like foure Cycle's over and like a 70 or 80% chance this is just a pullback in a in a in a bull this is just a bull market pullback and for anyone who's around in 2021 you I mean people are very quick to forget

in the middle of 21 Bitcoin Drew Down 56% eth Drew Down 61% Soul Drew Down 67 % and a lot of other things in the middle of the year in the middle of what we look back and think 2021 Peak bull market they drew down like 70 to 80% um and I just think people are very quick to forget that yeah I'm trying to look at like there's a couple of tweets that I saw that I can't seem to find right now but like every cycle there's there's a a a number of draw Downs um I think it was I'm looking at one here by milk roow like so bitcoin's down that was like February 26 so yesterday in 2017 Bitcoin witnessed 12 similar pullbacks he's

referencing that it's down 22% last month nine similar pullbacks in 2021 so it's like toal Al class yeah yeah here's a 2021 or here's a excuse me 2017 one which was price goes up Hearn dump I don't even know what the Hearn dump was actually um then there's bit finex hack and Bitcoin fell from 850 to 650 uh People's Bank of China regulations Bitcoin went you know quote unquote crashed from 1,200 to 800 ETF gets denied goes from 14450 to 900 Bitcoin cash drama goes from 3,000 you know down to 1900 so I just like I don't know these you can't have the uh mark

yuso would always say volatility is a good thing I remember when you know in the early days of starting block works we would actually work out of Morgan Creek's office with Pomp and and YCO and yuso said I I I would ask him like just because he was a student of the markets and I was like 23 and I really didn't know anything and I was like how do you talk to these institutions about Bitcoin and he would always say the most misunderstood thing is that volatility is a bad thing he said volatility is just volatility it's amazing to the upside and it sucks on the downside Vol volatility is neither good nor bad it is just volatility and you can't have Bitcoin what Bitcoin went up 100% in 60 days after Trump got elected you can't have that and not have these violent pullbacks too so yeah I I was looking at

like just couple of reports I got from like Banks and Sal you know research analysts and try to piece together the you know macro and what's causing the pullback everyone's start to put like very sophisticated answers and tldr everyone says macro data is weakening policy uncertainty is increasing uh Mexican Canadian tariffs go live y y y um so I I mean I guess like people well there's a couple phenomenons I mean there were certain assets that have been like severely punished like uh you know bitcoin's down 22% but you know some of the alts are down 80 even more um you know so so if you were sitting in those like you're you're hurting quite a bit

yeah I thought Quinn had a good note if you want to actually think about like what the macro folks are thinking about the markets today it's um I I'll just read some of the stuff from Quinn it's the FED Treasury and broader government have provided further guidance on their policy uh priorities and is not near-term Market friendly um if doge is to achieve its goalss and reduce the budget deficit it will cause a near term economic growth problem as the government is the number one driver of us job growth um they go around there there is a risk that unemployment Rises as Doge Cuts take hold but the government doesn't respond as much or quick enough with stimulus to soften the blow right so that's about Doge then there's the near-term he talks about near-term liquidity says the near-term liquidity Outlook is also not very

attractive with the first fed cut uh months away and a depleted R RP liquidity facility I don't actually even know what that means the dollar is weakening for bad reasons slowing growth not good reasons fed liquidity it's important to understand this given the dollar strength has helped to attract inflows to us assets over recent years combined with record high valuations the risk reward probability distribution is becoming increasing increasingly negatively skewed crypto momentum and sentiment is worsening who is left to buy who hasn't already so I think that's a good insight into like the mind of a crypto hedge fund that trades very short term I would say like I I know Quinn very well very good Trader but his time Horizon is weeks I would say when I

would say your time Horizon my time Horizon is many years um like someone asked me I so I I uh hood is I own four stocks I own coinbase Robin Hood Alibaba and Nvidia and hood is Robin Hood is the second largest stock I own behind coinbase and someone asked me like oh there's all these short-term Dynamics and I was like I'm not thinking about Robin Hood on like a three-month time Horizon here right I'm trying to you know buy these stocks and just hold them for 5 to 10 years so I think one of and the reason I call this out is one of the things that I think drives this like fear on the timeline is people the big names on Twitter the anoms and quins and things like that they're trading on week to week time Horizons they're not just

sitting in these things and holding them like maybe UI are you know like I am so yeah uh Omar from dragonfly sent me a report by Morgan Stanley on probabilities you know I talk about a lot about thinking in probabilities of course I'm trying to pull up the report but it's just fantastic I tweeted something that so so it's like a 30 40 page report um and I've written I've written I've uh read a few reports from this guy and he's very very insightful I want to pull up this particular Insight if you bear with [Music] me research shows that investors commonly overpriced stocks with Lottery characteristics because they overweight

the probability of a high payoff and like I I guess like it got me thinking around okay is everything in crypto does everything in crypto have Lottery characteristics yes or no um I think right now because people don't look at the fundamentals but as the fundamentals actually become I know it's a bit of a meme but fundamentals become more important to crypto assets which I really really really strongly believe they will and we can talk about that if it's interesting then then we move away from this Lottery idea that's my but but like okay so like the the marginal bit the person that's buying Bitcoin are they buying it because it has Lottery

characteristics I don't think bitcoin's become that is is that anymore what about salana I I also don't think salana is that anymore and same with ethereum got it um let's go down or higher up the risk Spectrum AI coins yeah that becomes a lottery ticket what about memes full Lottery yeah and so yeah I I I agree with that so I think like coming into the year like uh you know we were here we're on the record saying that this is going to be a good year I I don't know if we're in a bare Market I mean technically speaking we we are right if you were to like what is

the definition of by the technical definitions of a be I'm talking the crypto cycles of a bear yeah in crypto like we we don't consider this like a bare Market because we've seen multiple pullbacks during this four-year cycle which has become this sort of standardized thing for all normes come out there listening um and so people always look the the rainbow chart the fouryear cycle the super cycle um but yeah there there there is far more volatility in this asset class than than than in others um but yeah uh I I think there was a lot of expectations that the thing about the casino is that you I think it was uh Travis from iky who had

a quite a sober take about what's happening in the quote unquote Casino um and he said some of the effect of how toxic meme coins been and he compared it to like imagine walking into a casino and the casino drop a little bit of fentanyl in every drink initially everyone's like really hooked and then everyone kind of drops dead and then you the it was such a very sober analogy but um I mean I'm not suggesting that that's correct but it it just makes you think about the you always when you think about markets um I'm sure Quinn I'm sure Traders obsess about this far more it's what's a what's the composition of the

incremental buyer is it an institution stepping into buying the ETF like what are they buying if $100 flow into to allocate to crypto where's that going to go yeah and now I think you have many many different products you can buy the ETFs you can buy micro strategy stock you can buy options and other derivatives to express that view you can I technically buy stuff like Robin Hood um that gives you crypto exposure you can of course allocate to crypto funds you can you know go to pump. fund go to and but but yeah I guess looking back like I don't I don't know if there's a perfect way to do this I know you guys have researched aspect but like it would be nice to just understand like where

the flows are coming from yeah and because if if everyone's just coming to the casino then that I think is a very it's just a very different flow that is uh like the duration of that flow is very short the LTV of that flow is really short and that I think impacts how assets are price because if everyone is buying the lottery ticket then of course it's going to be more volatility in markets but um you know of course we could also talk about like in Prior episodes I've talked about open interest how much open interest is out there how much Leverage is in the system there's a lot of things that I think you can you can like look at then for how the market is position yeah let me throw out my idea and sorry about the uh I don't know

if you can hear the heater clanging away in this new you mean the rat you mean the rat going through the pipes yeah I think until April I think we're just stuck with this this episode is brought to you by scale the next evolution in layer one blockchains with a gas-free invisible user experience instant finality and robust security scale allows for Limitless scalability and has already saved its 50 million users over $ 11 billion in gas fees scales High throughput zero transaction costs and Powerful web 3 infrastructure make it the ideal platform for gaming Ai and other High throughput apps to explore the gas-free ecosystem visit

scale.png network of ZK chains the elastic Network to onboard the whole world into crypto many specialized chains must be able to coexist work together and share liquidity institutions and Global Financial leaders choose ZK sync for unmatched security scalable infrastructure better onboarding gasless transactions and privacy first design join Over 20 chains including abstract sofon and Kronos in the elastic Network today behind ZK sync is the ZK stack it is a One-Stop platform for building private blockchains on ethereum the stack solves all the typical privacy regulatory user experience and deployment concerns of

blockchain without compromising performance or security join the elastic Network today at ZK sync. iempire thanks to ZK sync for making today's episode possible probably a mid curve take on this but I think that okay who's the who's the buyer there's only one buyer in the market today and it's Michael sailor there's there's one net new buyer in the market and it is Michael sailor and that is why Bitcoin I mean he's bought 20 billion dollars of Bitcoin in the last I think what 60 to 70 days he's bought 20 billion dollars of Bitcoin and that is why Bitcoin remains at like 85 to 90k if sailor wasn't flooding you know pumping 20 billion dolls into the market Bitcoin probably is actually down

closer to like 60k so I so I do first I do think it is important to recognize that the second thing that I think is happening is uh there are like you said all these other uh things that retail can use to use the word lottery ticket like to to buy lottery tickets right it used to just be like let me buy the coins let me buy the alts let me buy the new L2 and now it's like I mean you can just in your Robin Hood app buy Bitcoin options you could go 10x levered long on bitcoin that become it's like why would I go buy the new L2 which youed it's like the last cycle the the lottery tickets were the were the alt coins now the the lottery ticket can still just be on bitcoin right you can just do

like you could just you could you could 10x l long on bitcoin right now inside of just Robin Hood with options I mean I I I think I I haven't done that but I'm pretty sure you can just do that or you could do the same with coin or hood or something like that and if you really want the lottery ticket you can just go straight to the memes now that the memes have died I actually think it opens up a really there's two there's two things that I think could pull this back so the me the memes are dead right now like no no if fans are buts the memes are dead right now I think actually that will change and I actually do think memes will come back and I'm sure a lot of people disagree with me on on that but um so the memes are dead so that but

crypto native Capital needs to park their money somewhere and they they still want the upside that's beyond Bitcoin eth and soul so I think they'll start looking at other things so where do they start looking I think they start looking and I I know this is a total Meme and like mid curve take but like I really do think they look at things with fundamentals and the reason that it will start happening now and that it couldn't happen any time in the past is because uh look what's happening with the SEC the SEC is dropping they just dropped their suit against consensus today Gemini earlier this week coinbase obviously was a massive one um but the most important one in my mind was was Unis swap they dropped their case against Unis Swap and what does that mean for these tokens it is the most

exciting thing right now because why don't these tokens have fundamentals because the the the government and the agencies haven't let there be fundamentals way you know I was looking at a tweet by Joseph Luben that just dropped their their suit against them as well right literally every single action that thec brought against a crypto company has been droing in the last like 72 hours right so I mean let coinbase hold this up I'm gonna show you just because I'm showing you radium because this is the most recent dashboard that we just created but radium I mean let's look at the all right I'm looking at the monthly profits of rate like 64 million in profit last in January um swap swap Revenue right

like uh quarterly swap Revenue in Q4 was 90 million right these things are profitable incredibly profitable businesses you could actually argue that's one of the most valuable things that crypto's created is the ability if SAS made it so that you can create companies 10 with 10 times less employees 10 times more profitable crypto just made it so you can create companies even 100 times more profitable with 100 times less employees and I ience so powerful yeah there's a great tweet by Ryan Connor uh from your research team I just shared it with you I think if you want to show it on the screen sure um hold please and he says something to the effect of like everyone saying oh you

know mle Libra killed um you know profitability salana is going to zero kind of thing and he's like well no like let's look at the data and and and what you're seeing there um is pretty instructive like he's looking at application Revenue uh from pump um and you know it's actually you know yeah it's come down quite a bit but it's not uh you know pretty much says like 50% of all crypto app revenue is UN has been unchanged since mle and he's referencing like pump so I I just think that that's pretty um I guess like you always you always see people that very quickly try to

like yeah correlate or develop some sort of theory as to why the Market's down um I don't know I feel like you always should look at like what's going on in the market but um a I'm of the mind that memes are definitely not dead sorry to break it they're going to be continue to be a thing um you just have to always think about like um where the flows coming from and tral markets have been pretty hit pretty battered so um the question then is what is going to cause the incremental marginal allocator to to come in crypto I think I think what you're saying is exactly what I thought Ari Paul had a had a good

tweet which was people especially funds are positioned bullishly um which actually we should talk about in a second problem is we're not getting enough daily fresh inflows to offset the extractions not about paper hands which what he's referencing is not about just people selling and you know being paperhand he said in my opinion it's just there's just not enough new contributor we need a huge amount of new Fiat and daily just to keep prices steady to offset exchange fees Market maker and Arbitrage of profits onchain fees bugs hacks Etc right now sailor is it so that's what I'm saying sailor is the only buyer we do need these new inflows it's the exact same thing yeah this is yeah this is what we're saying yeah I mean obviously I've been talking about it here at L so

I don't want to bore people but the the thing that is if you look at the Fe stream we need a little music for uh the in inevitable inversion plug that is coming it's like [Laughter] okay God damn I was going to say something about you know something else yeah sure all right well now I opened the door you could do the inversion plug you see you I'm just that's like the no like Conor Conor says something like like pump has stabilized re like their their market share has been stable since Libra so like pump from a like 100 are generated on chain the percentage

that pump out fund encompasses of that is remained stable obviously the aggregate fees have come down in salana as they have come down in every other chain he said something that I'm not looking at like I don't think he re there's no chart here but let's just take his War for it um and hopefully we can he can tweet about this he says eth Revenue has fallen more than salana revenu since Libra well here we can we can we can pull it up we've got the data so let's see you can see [Music] eth I'm not sure he's right about that let's see maybe it's a percentage oh eth Revenue has fallen more okay so eth

let's go to New Year's when wait when do you want to take it from okay so New Year's yeah eth was 40 salana was 63 and now eth is 17 Salon is 30 okay so he's saying the percentage decre yeah drop is higher yeah so I mean that's interesting um should we talk about the positive stuff because like I don't know yeah yeah okay let me yeah let me let's let me take take us into this because there is it this is why I'm so oh actually before we get into that the the very last thing I'd say is you you said this word expectations Santi the E that is it's the positioning that is causing people to be bullish or excuse me bearish right now it's the expectations of what we thought was

going to happen and everyone is basically positioned with their portfolios so I I sent this tweet out which was like um and this will take us into the into the bullish take which I said I'm confused by who's not bidding here do you genuinely think the cycle is over do you think that Trump won't do everything in his power to pump the market do you think Pro crypto regulations that we've waited on for several years will have zero impact do you think that you sound smart by pontificating about macron being bearish do you not see every major financial institution fintech launching crypto products do you not believe it's kind of a you know fluffy fluffy tweet but what up but actually the most interesting thing were 250 comments and folks were basically saying I've got no cash brother I've got I've got no I've got no

cash so I think the your word that you said is spot on which is expectations everyone's just put everyone was gigal going into this year as soon as Trump you know got elected everyone basically full risk on full gig Ascend and that is people are positioned off sides for a I think everyone thought short-term bullish right away and what Trump has done with tariffs um has OB has obviously I I think probably tariffs are one of the main reasons this Market's down I also think one of the main reasons the market is down is uh uncertainty which ends up funny enough being in my mind it's very bullish everyone saying like I listen to these macro podcasts we've got one Ford guidance everyone's saying like get into

cash but the reason they're saying Get Into Cash is because there's uncertainty in the markets I'm like there's no uncertainty here Trump is doing these short-term tariffs probably to try to Strongarm pal to reduce rates like longterm you think Trump is not gonna end his first hundred days with the market up like come on um look I just want to like so I was like um listening to Founders I I go on these like Sprints of listening to Founders podcasts and I've been listening a lot to the the buffet AER ones because I I read a note like Berkshire hathways I think he's holding record amounts of cash and he's been downsizing a lot of positions um and it's something that is

pretty impressive like they've been like um Brookshire Hathaway has been known to like for many years just sit on cash M I think there's like I don't know if them or some other um like catch fund like held cash for like a record amount like decades just waiting for the right market conditions and like naturally so like when most people think of holding cash they're like it's eating at you right it's like I'm not earning I'm not earning yield I'm being inflated away and you want to do something there's like this natural tendency to do something with the money fine okay speculate do stuff but um there's just times where just sitting on cash is like a very a very um if you're if you're a fund you have to kind of be always

allocated it it's feels kind of dirty to hold cash yeah um and I think that's always the problem like you want to like probably no one has cash out there to bid uh right now even though you want to bid um and there's only very few people that just have the discipline to hold cash um and you're right I mean it just goes back to the expectation like everyone was probably gigal Along coming into January it probably didn't help that a lot of funds were not properly allocated over the last two years and they entered some trades pretty late lsh I say late in in in a short time frame you know a lot of funds probably best believe bought you know so when it started run up from 100 to 15 maybe you know caught caught it at 200

and so you know they're feeling like quote unquote idiots but they got to look at themselves and says and just ask themselves like where's this headed do you have redemptions or do you don't have redemptions because if you have a five 10e Horizon thes is very much unchanged yeah yeah yeah like holding cash in this asset class never hurts but it's painful it's super painful because it rips in your face and you're like [ __ ] yeah well we we're recording with uh tomorrow with Prav and Dave culk and Prav I think Prav flipped to like all cash in January I'm pretty sure um and I that's and that I think we'll release that episode this coming Monday for folks who want to

listen um and I just want I I want to hear about the conviction to flip to all cash because in the moment it's so hard it's one of the hardest things to do I've never been able to do it in in the right way um okay let's talk about the bull let's talk about the bullish stuff before we do that I'm just pulled up slack and I'm getting incessantly pinged to say did you promote D at the beginning of the episode which I forgot again so get damn um all right we we we have D coming up it's gonna be a banger event um Empire 10 that's your code actually the speaker lineup is insane it's like really really it's okay let me read you the speaker lineup Mohammad alaran who's the uh he's chief economic adviser of

alon's ma massive massive name yeah yeah yeah Pimco chairman I think um okay we've got Michael sailor Kathy Wood Richard Tang the CE of binance no grat Brad garlinghouse shervin pishevar uh we just added Tom Emer today Caitlyn long toi tapiero uh Congressman wlly nickel Amy oldenberg who's head of emerging markets at Morgan Stanley Ledger CEO Mike Kagney who used to run Sofi Eric Peters um you know Jessica peek from the US Department of Justice the mooch um Robbie mitchnick who's head of crypto Black Rock Joe Luben we just added um you know Matt Hogan from you know CIO of bitwise stepen goldfeder so the list

goes on like the just a very good list Santi you know good good crew I like by the way look at the look at this list look at look at these people's head shots and then look at I the only one that has a the only one that's that's why yeah I think you're the only person with a what's wrong with the world non boring head shot by the way like two or three years ago every like the amount of were like actually Omar's got a decent head shot that's not bad yeah all right anyways Empire 10 go get your ticket also the other thing is we launched a new podcast today oh really yeah we launched a um launched podcast called Supply shock so been trying to hire this

guy for like literally five years this guy Pete Rizzo he was the first reporter quk yeah he ran editorial at coind DES from 2013 to 2019 and then he went and helped the street launch their crypto arm he was editor at large at Kraken and most recently he's been Chief content officer of Bitcoin mag literally been trying to hire this guy for five years he is he is amazing he's like the most crypto OG he basically started Crypt media is how I think about it um and uh yeah it timing was never right we I you know would call him every like quarter be like is a time is a time and finally end of 2024 we saw this good opportunity which is what we call internally like the Bitcoin Renaissance there's just all this amazing stuff happening with

Bitcoin it's like nation states are buying institutions are launching products and there's all this cool stuff actually being built on bitcoin so yeah we just launched uh our first ever like Bitcoin only brand supply shop so that's awesome all right back to the this episode is brought to you by scale the next evolution in layer one blockchains with a gas-free invisible user experience instant fin ity and robust security scale allows for Limitless scalability and has already saved its 50 million users over 11 billion in gas fees scales High throughput zero transaction costs and Powerful web 3 infrastructure make it the ideal platform for gaming Ai and

other High throughput apps to explore the gas-free ecosystem visit scale. and follow their Journey on X at scale Network thank thanks to scale for making today's episode possible this episode is brought to you by ZK sync in 2024 ZK sync took a step toward a multi-chain future by transforming from a single L2 into an ever expanding network of ZK chains the elastic Network to onboard the whole world into crypto many specialized chains must be able to coexist work together and share liquidity institutions and Global Financial leaders choose ZK sync for unmatched security scale scalable infrastructure better onboarding gasless

transactions and privacy first design join Over 20 chains including abstract sofon and Kronos in the elastic Network today behind ZK sync is the ZK stack it is a One-Stop platform for building private blockchains on ethereum the stack solves all the typical privacy regulatory user experience and deployment concerns of blockchain without compromising performance or security join the elastic Network today at ZK sync. iempire thanks to ZK sync for making today's episode possible Yan is always doing the plugs I gota do the plugs I appreciate it I gotta do the plugs all right let's talk about some of the bullish stuff so um okay this is this is why I'm hyped so

let me just pull up some of these I'll pull up uh I think Ryan's tweet from bitwise might be a good one good place to start which is um Ryan rasm he said uh who's he's head of research at bitwise um said so Matt Hogan and I just presented the case for Bitcoin to 350 wealth managers JP Morgan Wells Fargo Etc 53% of them plan to allocate to crypto in client accounts including 33% in the next six months mcoin nonsense Can't Stop This Train and you know I I know it's like it's just the I've never seen such discrepancy in on the timeline between like retail who's just clearly trading and like I said very positioned

off sides versus people are just zoomed out and like understanding what is actually happening in this industry which is there's a horde of institutional interest uh coming right now and I think right now institutions don't think Bitcoin is stopping no no no institution right now is sitting there being like Oh my God Bitcoin just pulled back from 105 to 85 like is the bare Market happening that's a very like weirdly Crypton native thought I think they just say oh hey this is a pretty nice entry right now um okay so that's the first thing I was looking at second thing I'm looking at is um is uh Stripes Stripes letter so Matt Hong from Paradigm called this out just a great tweet uh this is Patrick hson um in the stripe 2024 letter quote we are already

in discussions with some of the world's largest Enterprises helping them assemble stable coin strategies such as faster Global expansion or easier custody of funds boom you've got the world's largest payment company doing that all right let's flip over to Bank of America Bank of America CEO uh Brian moan says the bank will launch a stable coin it's pretty clear there's going to be a stable coin which is going to be a fully dollar backed it's no different than a bank account it's like okay so you've got Bank of America you've got stripe then you've got like what I was mentioning too which is I thought Jonah put it Jonah from thousand X podcast put it nicely I'm ready to bet the farm on this Trump is not going to preside over a 2008 style crash this is not his preferred Legacy furthermore he has all

the tools at his dispos to prevent one thus if things start to look bad they don't yet buy everything you can with leverage the second you start to see signs of fiscal stimulus or quantitative easing I'm like to me it's just funny like to me I don't no I don't know about the second part about you know L to the NES skip skip the leverage and selling the house and the kidneys yeah maybe maybe don't mortgage the house to to buy crypto right now but it's like man I mean go Bank of America launching a stable coin stripe is helping Enterprises on board via stable coins um uh you know bitwise is doing God's work talking to all the financial advisers it's like I don't know just I don't know how you can not be bullish right here that make any sense I mean it's

like volatility for ants seriously I mean like what did you expect like you know you're coming into a volatile asset class that is in pure price discovery of course you're going to see these draw Downs like I don't know how else to describe it like you you should expect to see 40% 50% pullbacks in Bitcoin and then you you you run uh one and a half two three beta on that technically you know and so you should expect severe draw downs and so you already do one or two things you hold cash because psychologically you're going to be in a good spot to bid when stuff gets ugly but if you don't have any cash you're not going to bid and you're not going to borrow against your stack at that point to go like gigal along and so it's like people talk about

risk and you're like there's no perfect blueprint to what you should be doing but if holding like there are been times I was actually talking to prab about this like in during uh middle last year where things like like Actually March of last year where stuff like kind of took a hit and we were just going through this exercise over the weekend like and and and I was like I'm GNA hold a little bit more cash I don't think the fundamentals like longterm have changed I think we end of the year higher like all this stuff that I've been saying but I'm like I just want to hold cash because psychologically I'm going to be a better spot and if prices go down another so differ like okay to put it in perspective and where we are now so stuff has gone sold off quite a

bit um I like going into the year for instance like I think the year is going to be great so I have1 $100 I'm already pretty exposed my cash allocation say is very little say 0% um I have certain scenarios one where we go to 150 Bitcoin you know salana eth double kind of thing and so those $100 can go to 150 or 175 or maybe 200 in some sort of probability weighted scenario and so I run the method and say I can stay 100% allocated fine I capture all that great you know then maybe got to figure out when to take some profit and

whatever and but in that process I'm like there are scenarios where it comes down quite a bit again factoring in that most likely there will be a time where there's like a draw down of 30 40% and I can say oh fine the problem with doing this scenario is that like you you pick one point and then you pick another and then you but you have to figure out what happens in the interim right because there will be a Temptation there will be the emotional like freaking out when things go really bad right when these draw Downs happen and so when you run that kind of Monte Carlo simulation whatever it is that you're doing in your brain you say oh well let's play The Extreme scenario where things that 100 goes down to 70 you're still going to end the year at maybe 175 if you don't touch that but

let's be real you're not going to do the trade log off go surf come back like Chris biny we most humans will not be able to do that and so because you're here you're glued right and so you tweak and you play with different portfolio constructions where you say instead of being 100% allocated long the market expressing this view that on a probability like a expected outcome you're going to end the year either between one 4170 or whatever but it's really the variance of that the ball that you have to look at because that's what really psychologically puts you in a bad spot yeah and I think it's a difference between holding zero cash and 5% cash or 10% cash or maybe 20%

cash maybe certainly not like not a 100 but there is an optimal allocation of cash that I think it is very personal and you just say okay in those moments if it goes to 70 I'm going to have cash and I feel great and I'm also not not not only that will I have cash to bid but I will most definitely not feel compelled to sell because I have this buffer yeah what you're what you're really getting at is even if you can just have 5% cash you it will make you excited when the market goes down like I see I see I mean I feel like I'm I'm trying to stop talking about specific

tokens because people are just called blockworks of BC shill if I call out a specific token but like there are tokens that I'm now start I'm buying like I just started I just started buying this week and um and what you're saying is like for me so let's use soul for example when I see Soul go to 135 I get really excited right because you've got a little bit of cash but if you have zero cash you see all the coins go down and there's no there's no there's nothing to get excited about so yep there there's this great top again back to this report Morgan Stellan probability that I'll link in the show notes uh so Danny Conan and Nam derski these uh behavioral Economist they have they have this book Thinking Fast and Slow phenomenal kind of seminal book on

um uh behavioral economics and how humans are incredibly rational there's this theory of loss um what is it loss aversion MH and the the basic premise is humans go to Greater lengths and feel a loss um much greater than a corresponding gain so if you lose a dollar you feel it twice as much as gaining a dollar and it's it's sort of um and and and not only that but it's like and so if you if you take that then you say this is why I'm saying like a 5% allocation of cash like insulates you against that psychological like predisposition of feeling that loss extremely painful because to your point instead of instead

of being obsessed about I'm an idiot like I was up at 100 I was up 12 then I'm at 70 I should have sold a 20 like I keep telling myself every cycle that I'm going to take some profit and just really be in a bad spot or objectively speaking you should be buying an asset that you loved at 100 that is now at 70 that's a discount you should you should go and buy there that's like the but if you don't have any cash you can't do it but even if you have five 10% allocation of cash um then you you flip from a negative bitter state to avoid this like loss aversion that is always going to kick you it's always going to drag you the way I practically do that is I set just stink bids in an exchange I'm like in this moment in time

if I can get this asset at 100 or this asset at a 20 30% discount I will I will buy but but and so and so I I think of like the number of units that I want to have in a particular asset so I want to have X amount of units of Bitcoin x amount of units of ethereum or salana or whatever project and so I said I have a th000 units right now I can buy the same thousand units out all these different price points and I'm gonna allocate like 20% of the cash position 20% of the like a cash position that I have on principal today and so that's how I like back into having cash always available to hit that to pick to lift when when the market draws down and there's a whip like a

cascading liquidations um it's probably not perfect people might be listening like why is he just like s sitting the cash is sitting there in an exchange why are you not earning yield on that and that's honestly a that like some of these exchanges could really offer like just if if you have like that usdc parked or USD par you can do it on coinbase I think if you just sit on usdc they give you a yeah but I'm not sure if you're sitting on usdc when you put in the bid I think you're sitting on USD I don't know if they'll share the yield sweep but like I'm sure there's like a sophisticated strategy to do this I'm like fine I mean I'll just hold cash so let's make it a little more tactical so what are you are you putting in bids right now do you put in just like a

market order are you do you have uh you know limit orders at lower prices what what are you doing right now yeah limit orders I have I have I always have some limit orders for all the assets that I really like I have alerts well are you comfortable I know people know that you like soul I don't know if you still like Soul actually but what what do you like right now yeah uh very much just continue to add my portfolio um um it's very much concentrated so I do like Soul um let's just talk about Soul because I've talked about Soul extensively there's other assets that like but like soul is at 138 it is basically you're getting Soul at the same price that you'd have gotten at October of last year so are you buying at

138 not right now I'm not adding to the position um because I am like uh I I I bought a lot for U during the FTX um sale so I'm unlocking but I'm not like touching that uh I have some bids limit orders the see this is on a percentage basis 120 like basically like in five increments it's like very simple 120 115 125 135 130 125 120 115 110 105 100 90 like all the way down 80 what what other assets do you have that for either stocks or crypto uh coinbase Hood um for stocks I

do this product that I was talking about in the other podcast yeah yeah um but um so I always on a on a week like this one I I I do a lot of stuff to capture the higher wall because things are priced better what do you think about the fundamentals thesis in crypto right now do are you looking at tokens with you know with with fundamentals do you get excited about that do you think maybe it comes but not yet how do how do you think about that I do I mean it's going to matter I don't I've been realistic like I um like like maker for instance I don't know that's always been like the fundamental trade right yeah

but it never has really materialized shout out to Ben he he always was like but look at look at maker on a p basis I'm like yes 100% um I I yeah no not really like I'm very concentrated now especially now that I'm building I like I will have less time to just be tactical so or just so I I'm very I I will l say I did a technical RFP for the last like two months and looking at different protocols different look to interacting with different teams of like where should I build I mean I would be lying if I didn't tell you that I've considered uh swapping some tokens for Avalanche um I just think that's where I'm building so there's a reason why I

picked it and so I have increased my allocation to Avalanche as a protocol and look none of this IL legal whatever advice but yeah there's no there's no uh surprise I was I was wondering I was wondering if you were going to start if you had bought aval swap is very simple uh Sol for Avalanche do that trade um I just think that that I think that more projects um Off the Grid far away obviously inversion like more and more teams will appreciate launching their own chain uh I came very impressed by the quality of their team I think their be muscle only becomes more important when traditional

institutions are willing to interact and launch uh maybe their own chain I think they'll do it there um like we we T like I guess you could also say other high through of blockchains are interesting like uh opos Su um you have monad that is coming you have um Bara so there's like other ways to express that thesis um but I but I I I think about that a lot like okay what is the Moe of salana is that asset fairly priced in the same way that I thought and I couldn't explain like I still can't explain that the relative

valuation of like ethereum to salana I continue to believe that that spread only compresses based on Revenue based on metrics based on projects launching there like that thesis and type but then you also I've thought a lot about okay how does that relate to the valuation of something like Avalanche relative to salana you know you have to believe that all these on an absolute basis are worth what they are which is a separate conversation on your point around fundamentals and I my point is none of these networks are worth what they are on a cash like a discounted cash flow basis none of them it's like you can do the craziest assumptions on a 10-year period like when you're doing a financial modeling cash flow for 10

years you cannot justify you have to basically come up and derive some sort of terminal value valuation yeah terminal Val the component of when you run a discounted cash FL banking private Equity whatever or hedge fund doing analysis like you do you're on discount of cash flow for 10 years or whatever and then you have like a terminal value assumption of this house is going to continue to grow and compound at x- rate and this the discount rate and y y yada uh and this is the and so I in none of the craziest projections you could get to um the asset be worth what it is um without believing that like at least 90% of the valuation for any all of these networks is based on some terminal value assumption that is pretty

wild earlier in today's episode I mentioned Ledger's latest products the stacks and flex and I wanted to take a few seconds to tell you more about them these wallets feature the world's first secure touch screens which don't just simplify your digital transactions but also keep them extremely safe these wallets are virtually impenetrable to online attacks because they store your private key in a secure offline chip you can manage more than 5,500 tokens and install up to 100 apps choose the most trusted name in Hardware wallets and take control of your digital Security today at ledger.com or hit the link in the description of today's episode to check out their latest wallets hey

everyone Jason here wanted to uh just take a quick break and highlight everything thing that's been going on in the mantle ecosystem in just one year mantle has seen its tvl surge by over 1,100% now reaching $1.69 billion that's just such a crazy amount to think about more than 225 protocols have made mantle their home while the platform's Eco fund has invested $38.5 million in 51 pioneering projects through strategic Partnerships with buybit including MNT as collateral supporting Athena to scale and the first ethereum L2 to integrate Ono Finance they just continue to be on the bleeding

edge of l2s be sure to stay up to date with what's going on by giving them a follow on X at ZX manle special thanks to the incredible mantle team for sponsoring today's episode AO the hyperparallel computer is here a decentralized supercomputer built on top of rwe's permanent data storage AO offers infinite parallel processing and leverages web infrastructure HTTP for unprecedented scalability addressing limitations of existing blockchains AO smart contracts support large programs including llms and can execute autonomously enabling new classes of decentralized applications utilizing tees for secure computations and

features a 100% Fair token distribution to R weave holders and Bridge depositors emphasizing Community ownership thank thanks to rwe for making today's episode possible you can find out more by clicking the link in the show notes do you think that when the institutional crowd comes into crypto and these hedg funds come in and it's not all just Venture stuff they will look at they will try try to build models around these things and so maybe they get more excited about a and Unis swap I'm I'm making those student names up um because they're generating fees and maybe because the SEC lets them you know pass those fees back to the Token holders um and they get less excited

about you know the new L1 excellent point yes yeah I mean that that's really the we haven't really been able to express or call these things what they can be and so the we've talked about fee switches and value cruel to these tokens I mean quote unquote governance tokens but in a world where you have more regulatory Clarity and I mean yeah like some some analysts have started to compare uniso with coin right yeah that comparison it's like on a volume basis or on a per employee basis on a you know all of that computes right um I I think so yeah that's a I don't think we're there yet but I'm not as close to the regul

regulatory like I mean I don't know how quickly that happens and when that will be priced in yeah which which on regulation should we talk about like some interesting developments on I mean there's a few other like newsworthy stuff that we should talk about obviously the hack there's the um stablecoin proposal that impacts stable coin issuers there's a number of things yeah um I mean on stable coins right now so Vance had that tweet about regulatory you know capture etc etc but I mean my understanding of what's happening in DC around stable coins right now spoke to someone last night who's in a lot of those meetings was St coin legislation

is moving forward um and actually Casey blockwork had a great piece on this um it's stable coin legislation is moving forward I think we'll get something done it's just that the industry is a little bit torn on what to do here and I think specifically don't quote me on this I could get this wrong but it's that um it really comes down to like Circle wants one thing tether wants another thing circle is fully buttoned up very regulated has gone through all has got all the licenses tether has not done a lot of that but tether's also in bed with you know caner Fitzgerald and Howard lutnick you know is you know part of Trump's very close Inner Circle so there's these two competing factions and

really two competing companies and ideas on on this and and and I think it comes down to should these non-regulated entities or maybe regulated outside of the US be a really core part of the US payment and banking system really and should they be allowed to be one of the largest buyers of us treasuries in the world um so it seems like we definitely will get some stable coin legislation will it be more I'd guess Circle wants something in there that says you have to get be very buttoned up and very licensed and you know they and I understand circle's Point here I there's a lot of like Vance had that tweet and other people piled on being like you know circle's lobbying against the

industry it's like honestly everybody's lobbying in DC right now coinbase is lobbying Ripple's lobbying hell you know Unis swap is lobbying everybody's lobbying and everyone wants their own interest that's what lobbying is for people that don't know like there's a key Lobby groups right it's the blockchain association there but are there groups right and companies directly going to DC and meeting with uh lawmakers yeah I mean there are the trade groups and then there are lobbying firms right so there are uh like there are the lobbyists who will get paid by the of the world to help you and facilitate introductions with congressmen and and you go in there you talk to them and say Hey listen your

constituent base really cares about Bitcoin mining because you know there's you know it employs 20% of the people in this County you should care about that exactly exactly so um and look the big lobbyist it's it's Ripple I think is the largest I think coinbase is the second largest I think andreon Horwitz is the third right um I'm pretty sure actually jump crypto is the fourth largest oh interesting um uh but you know other people are doing it like C Circle um I'm sure tether it un is doing it the wink of us twins like yeah it's very nor so everyone is probably advocating for whatever is in their best interest how um is this also the case for other Industries like the oil industry or the

Pharma industry or uh the Israeli you know Lobby you know what I mean like there there's everyone has to lobbying is like a thing um but how unified is is the crypto front because I I've heard that someone might go in there with a very specific agenda and then it to it it is very confusing when another person goes in with a totally different agenda and because crypto is one of those things they don't even understand they understand oil they understand Pharma they don't understand like what this so that is the role of the blockchain association in my like the blockchain association I don't think is is is they're not lobbying in the traditional sense of lobbying but they are kind of the the talking they're the voice of the industry in a sense here um and they're

bringing everyone together some people are in the blockchain association I think they have like 100 or 200 members and some are not but yeah I mean look Pharma spends I I would guess half a billion on lobbying a year um insurance is probably a quarter of a billion you know oil and gas I would guess is 100 to 200 million real estate probably 100 to 200 million Airlines probably 100 to 200 million like like the these things are big it's a big industry um and big tech companies do it too like I think you know oracle Microsoft Apple they're I would guess they all spend tens of millions a year on lobbying alone so um so that's what's happening

with stable coin legislation yeah I mean the big thing with bybit let's talk about bybit so the big update from you know our conversation last week is that everyone thought this was you know bibit really screwed something up and by the way I don't want to put all the I think bibit came out with this report that came out with a bit hack forensics report the report basically put a lot of the blame on actually safe previously nosis um and they said the compromise was basically they said the compromise was not bybit but actually safe servers and they hot swapped I think I let me let me think about put a good tweet about it they hot swapped the nosis safe UI with JavaScript code that only targeted by bit's cold wallet so and you could

actually if you've ever used like archive.org or like the way back machine you can actually go look at the code on their FR so basically they hacked the front end um and this allowed I'm I'm like 80% sure I'm going to get this right but it's a little beyond my technical understanding it's like this the UI of safe was compromised which then allowed access to AWS and their S3 bucket and you had this malicious JavaScript from Lazarus Group which is obviously North Korea there was malicious Javas JavaScript that got pushed into the S3 bucket uh and that eventually got distributed and then the malicious JavaScript code targeted specifically

the bybit contract address which then changed the content of the transaction during the signing process yeah so not good for safe honestly I don't I mean say like yes this is bad for safe but like I think industry is realizing how big of an issue Lazarus is here and like I think I think people I think this is the wakeup moment for you know people like Tay like just big shout out to Tay Zack xpt they they've been saying for a while like just how bad Lazarus and North Korea really is and I think people think like yeah sure it's an issue whatever but like man I'm I'm pretty sure North Korea is just out there sitting in some big protocols right now like this just tells me they are so much

more sophisticated than any of us have realized um and it's I mean it's pretty I think it's a big problem for the industry I really think it's a big problem because first off you start to lose trust in some of these things and that's that's very bad but second like if you're the US government and you see that we just funded we just gave North Korea 1.4 billion dollar and they're selling it off through mixers like it's a bad look it's a bad look no no absolutely I mean I think this is a lot in large part what tornado faced because it allowed the laundering of I think it was at the time it was the hack of uh sky their chain runin yeah a bunch of funds no it's it's very concerning um Tay I

have an immense respect for she has her way of communicating that is very jarring but she is right I mean she has buttoned up and she's been on on the trenches like you listen to Tay you and I think it's um in many ways like like the Lazarus group has been just exposing all the different holes of of the tech um the I think the like like of course now that this attack Vector has been exposed like a few things have happened that are positive one you understand that this is now a possibility um and like before people just assumed oh you know safe is just you know the Sacro sank the best way to go about signing like a multisig

um the and so it just reinforces T's point which is you can't assume people to like read zeros and once and then understand what the contract is going to do so if if I'm not a security expert but I found two things quite a couple things interesting bybit then created The Bounty website and put pressure on everyone in the crypto ecosystem to cooperate and to freeze assets uh and there and very clearly you expose people that are not and so that exhibits Bad actors very quickly yeah but they I mean the main I mean who the main person Taye was calling out here is thorchain right look at uh yeah look at I mean let me show you this data so 150,000 eth 7,000 addresses 10,000 transactions and 1.4 1.5 billion doll bit hack this is if you look at this volume right here

this is the thorchain volume I mean you can clearly just see like where North Korea is moving is clearly just selling is using thorchain to to move this out and this is Tay saying 200,000 eth has moved from ethereum to bitcoin so far that's 500 million dollars in five days third of it yeah we deserve to be cooked for this and there was this funny thing it was yeah you know someone said today was the most volume Thor chains ever done in day in in one day and it's like yeah I thought John CH had the best meme it's like where's the volume coming from where where's the volume coming from um yeah I mean this is this is where like what is a response of thorchain to that uh the response was not I mean

basically Tay and this guy Michael Perkin really got into it I mean Tay is like let me be extremely clear about something chain have currently o only Frozen legitimate people's funds you failed to not freeze funds you failed to freeze any stolen funds you failed both ways grow up you're a disgusting joke that was that was her her take yeah we we've gone back we we've uh of you've represent my position this was th Thor chain said I think you've misrepresented my position I wish we could have an adult conversation I want to bring criminals to account just as much as you do and she said [ __ ] 95% of all stolen bit funds are going through thorchain that's 95% of over 200,000 eth in six days

that's over $100 million per day of stolen funds on a single route don't you dare come up with some high horse thing save the this is the instance where like yeah we're building there's permissionless protocols but in this particular like we keep coming back to these instances where like you have to act you have to freeze like it's it's of course you're not going to roll back like you know in the early days like people probably would have entertained a discussion around rolling back the chain people have done it right yeah but you freeze like like here's the thing like if you're Thor chain if you're a protocol and you're going to sit on a high horse and say oh we're not GNA we're not going to freeze because you know then then it it diminishes

credibility of what permiss is and then developers are not going to feel the certainties and the guarantees they're going to be deploying on a immutable code and all this you know valid theoretical arguments but then as an industry we use usdc and usdc has a stop feature like do you not like that I I I do like just that's just like people get into these discussions of like oh you I get the protocol but it's like then why do then if if you're Mike Michael and you've ever interacted with us and you're like then what's the difference but you're going to use like some sort of purely pure eth back the coin yeah like no so so no I I I I feel

very strongly about like as an industry of course like a a lot of times like these theoretical debates and arguments like are put to to test and people are not practical enough and are not focused on what the most important thing is is we are here to create a very marginal step like a step function Improvement to The Current financial system to the current other system that doesn't mean like but we shouldn't be like lose the force for the trees like is it going to be perfectly immutable and 100% sensor resistant like no no like I think that's like a a pretty delusional take I think you have to just be very practial and say what

what is the most important thing I think the most important thing is to guarantee the Integrity the convincing people to use these these systems because they are better unequivocally they're better but I think taking the position that like this IND the sky like perfectly decentralized perfectly censorship resistant system is how we're going to like Thrive and win I don't think that's without a very clear response because facts are a huge huge problem and if this continues to happen like it sets us back many many years yeah you mean like you could almost imagine at the board level of Black Rock saying hey Larry what's going on without hack it's a lot of money in North Korea like are you sure you want to work with these people like they seem pretty

pretty loony like you know like like they could have Frozen funds but they didn't because because because what like I don't understand I don't get it Larry like maybe we should just you know Larry just just drop the whole Bitcoin to 250k 700k thing you know let's just like not risk it and and if two or three of these things continue to happen I think Larry's going to feel a bit more pressure Larry as like the chief our Lord savior yeah Larry yeah lar I I think North I think this North I think North Korea is an issue like look this is a goo this is um Lucas from jeto um someone said squads go Burr and he

said unfortunately if the squads front end deployment API key got leaked it would probably suffer the same to be fair you you could interact like C's tweet like you can interact directly with a contract the problem is most people don't right yeah yeah so I mean I I who who's go to cz's profile okay uh I want I want to open up a tweet about go down he had a tweet around this particular incident of safe um go down okay here here here read that and tell me what you think okay I'll read it out loud I usually this is CZ talking about um quote tweeting safe's blog post um I usually try to not criticize other industry players but I

still do it once in a while this update from safe is not great it uses vague language to brush over the issues I have more questions than answers after reading it one what does compromising a safe wallet developer machine mean how did they hack this particular machine was it social engineering a virus question mark how did a developer machine have access to an account operated by bybit some Co code got deployed from this developer machine straight to prod uh production question mark three how did they fool The Ledger verification Step at multiple signers was it blind signing or did the signers not verify properly four so was 1.4 billion the largest address managed using safe how come they didn't Target others by the way great question that's I've I I think we got really lucky that

it was only 1.4 billion um and five what lessons can other self- custody M multisig wallet providers and users learn from this all that a really good questions go up yeah uh question three um he's never used safe before you're saying because you by the way this question was asked yeah that it very clearly tells you and he had another tweet about uh using a decentralized exchange and it's like uh it's very apparent that he hasn't where where's the decentral where's the de thing or it's a while ago yeah it was like a couple days ago uh dude have you ever

used it yeah the the verification step it's like you're signing a transaction but the transaction will not like tell you the the like uh you I mean like you're not fooling The Ledger verification step there's like no verification like verify you're signing an actual transaction is the point yeah yeah I mean this wasn't on ledger to verify but by the way I think it is kind of on bybit too it's like I know everyone's talkinging about safe's front end but um bit needs I mean and not just bybit every centralized exchange needs to catch a pretty this was actually a pretty simple hack from what once you get to the signing part of this I think there's you got to be able to there's there's really I think it was

hu who said this perfectly there's no excuse for not verifying message Integrity on a second air gapped machine when moving $ 1.4 billion dollars of funds you just got to do that if you're yeah the whole point of a multis is you have like three or four or n of X signers to reach quorum to um compose and and submit the transaction yeah at some point everyone should like someone in there should have been sophisticated enough to like understand what the zeros and ones like what that contract was going to do my thought on this is you got I mean if you were sending a okay you know you know like there's certain wallets like they will verify exactly what will happen and we'll show you the end result of the transaction yeah

there's a there's a few out there that will simulate basically it's called a transaction simulator I think that the these guys are the best at it blockade they're these Israeli security guys they're now natively embedding inside of wallets so you should embed this in every single wallet including a multis like not because it's a multis should you assume that you should you not do this step like you should in a perfect world we have every single transaction is simulated and then and then you have to as an added step verify that you actually read that understand that that is the behavior that you want from that transaction right right because in a in a in a perfect world how could it this been

avoided saves um Keys got leaked AWS or whatever they were able to compromise that and then render the bybit multi6 signers a compromised version that they unassumingly signed this transaction each thinking it's a normal flow no problem we're going to sign nothing's wrong we're signing you know we don't have reason to believe that our devices are compromised or like surface area is pretty narrow okay fine what a step there that I'm sure now they're going to embed in every single multi signers not going to embed is having some sort of system that has a transaction simulator which is at the end even even safe if they're listening they should have this natively like there for their customers which is even

if you have hundred signers if none of them check what that that transaction is going to actually do once it is uh approved by all the signers then this will lik you know you haven't solved anything you've just introduce more delays to composing a transaction to reach Quorum but you still are exposed to like none of those hundred people thousand people million people it doesn't matter like if no one's checking what the transaction's going to do you're still going to be exposed to this so yeah I would like to see more of that like basically the flow would be everyone signs and before the last person releases or when everyone goes and sign say assuming everyone signs and you reach Quorum this is what is going to happen 1.3 billion were is going to go to a different address that you want

to send to is is that really what you want to do and and the lights are like blinking you know or or certain certain logic like which is and I've seen it in some bridges I've seen it in some like transactions I think even metamask has it's like are you sure that you're you want to like when um kind of like there's like a natural delay function which is if if for instance you want to send to uh one of your wallets and you just sign no problem but if you want to send to like an external wallet that you've never used before it will be like hey Jason just you know you're interacting with a wallet that you've never interacted with are you sure that that is what you want to happen yeah or or this contract logic will be

changed you've never done that before I mean this should be industry standard in Phantom backpack metam and you don't have to be a security expert to like start thinking like like that which is I'm sure like I was thinking like so this is a pretty clever hack H how did Lazarus like think about doing that well they said okay maybe you know the IP address of like the signers because I think they they sign in a very um periodic and very defined uh process so there's no Randomness if there's no Randomness you're if there is no Randomness you become a bigger Target if you always take the route A to B from work you can get kidnapped oh at that point you always kind of have to just maybe take a different street that's why I leave my home at the same exact

timeway Randomness produces um produces more security yeah when you generate stuff right okay so so so so fine don't ever maybe do it at the same time but once they know that what these people do then they were thinking okay well what if if we know that they're going to do it at this day at this time we can very quickly hot Swap and do it without triggering alarms so but if it were random they don't know and so it becomes harder it becomes easier for safe to to say oh [ __ ] their systems would have picked up this right so that's one thing don't don't sign at always the same time um but also just um they were probably thinking because it's a multi they're never going to check they're never going to assume that the safe run it was compromised

yeah that's clever that's very clever it's smart you know who else is um should really look at this closely are funds um funds who are sitting on a lot of capital because you get into a really I mean you know this 10 times better than me but like maybe a portfolio manager gets in a nice flow with an analyst and says let's make this trade and maybe every you start to notice that like it tends to happen like Wednesdays around 10:00 a.m. the analyst gets pinged and boom email comes in approv the fire blocks transaction boom Wednesday 10 a.m. approve the fire blocks transaction boom Wednesday yeah yeah analyst sees it in the 11th week and auto you're you're an autopilot there there should always uh I mean there's a great book called The

checklist Manifesto by atula aand he's a doctor and he talks about you need to implement a checklist in every single time you're going to do something go through the every single item in that checklist and once they implemented that pilots and doctors it really decreased accidents so I think I think that should be that that that should always always be the flow like you should have a very well defined checklist that you have to go through no matter how many hours how many times you've done it you always kind of will do uh call the other person video like real world things like call the other person verify Toof fa um that flow like you you just do it and you never deviate

from it no matter what no matter if you want to if the Market's down 40% and it's a generational buying opportunity like slow down right for sure um but yeah that the sign the simulation of transactions I think there are a number of players out there hopefully if there any one of these guys are listening I would love to have a podcast Tay um you know maybe you know and other folks uh all the wallets I think it's really on them it's an opportunity to build a massive business I think agreed agreed I think I really think blockade is the thing they just raised like the reason I keep mentioning there's no like token I'm not an investor it's just a SAS company with from these like Israeli defense people who are just trying to solve this I

think they just raised 50 million from Rivet um yeah all right anything else no we should probably leave it on a positive Noe anything positive noteworthy um I've tweeted a lot about so the Callison Brothers the stripe um earnings came out I think there there was like a the annual conference day or something Simon Taylor interviewed one of the cison brothers he specifically asked about the bridge acquisition Zach from bridge who has been on this podcast go listen to that um like reference that so go on his tweet Twitter and find his posts a lot of really interesting things happened like the Brian the Bank of America stuff like pay attention to that all of these all of these newsworthy

things go unnoticed when markets like are are very intensely like volatile and so people lose sight of that they're very they're very positive developments the last thing I would say maybe just to end on this note is if you are really miserable right now and you are not having fun I would first off I would get off Twitter I would think about are there things that do bring you Joy in life and I would actually lean into doing some of those things maybe it's cooking maybe it's going to the gym maybe it's going on runs I would figure out ways to not tie your happiness to the price of crypto what for for me is very simple work on Long term projects with talented people get more sunlight like I really get exhausted by Zoom meetings so like I try to spend more

time with people IRL I don't I don't really drink much I don't have Twitter on my phone anymore so those are just what works for me right but for for you it could be completely different um and it's I think you can tell Santi and I are having a lot of fun right now if you don't find your fun uh you won't you won't last long here and and you just got to crypto it feels like a short-term it actually masquerades is a short-term game but it's an incredibly long long game here right a new industry is being built it's going to take decades and decades and if you get sucked into the day-to-day news stories and price action you'll you'll you just won't make it honestly um just find your fun it would be the my my thing that's excellent advice I mean not to do a self sh but I

I shared with you something that I I felt compelled right to people because I've been in a bad spot and and it's exactly what you're saying like it was 2017 201 18 and I'm always reminded of that I'm like uh you need to develop an identity outside of work it is essential um and I guess like I I tweeted a long like rant about it which you don't have to read uh but but some of the key in key things that I want to share with people that was so useful for me is so say you go and talk to your closest the closest people in your life your parents your siblings your wife your husband or whatever your partner and you asked them Define Jason for

me you think they're going to say anything remotely related to your net worth absolutely not he's a kind person he remembers every he remembers my birthday every time he calls me every week he brings me coffee like he's just very a kind person he's intensely passionate about what he does like I admire him for X Y and Z the reasons why people admire you have very little to do with your net worth but there was a time in my life where I didn't think that I was worthy of being loved until I reached a certain number I'm going to say that again that I felt that I did I wasn't worthy of being loved until I reached a certain number how crazy is that I grew up in a great family I got so much love from my parents and yet I still I still went in

that and by the way I had not lost money I'd made incredible return but I didn't you know what I mean like you're anchoring to I I want to get to a billion I want to I want to become a millionaire I want to do and the problem is that never stops if you don't develop an identity you're never going to feel fulfilled because you know money doesn't money doesn't buy that money is great by the way I'm I'm kind of deeply skeptical of people that say that they don't need money no money is an amazing energy that you can use to like share it with your friends buys you time maybe sometimes but yeah there's like so like focus on that like if you at any given point that you're really in a bad spot go call five people friends maybe even friends you

haven't talked to in years and ask them hey man like why'd you hang out with me like what about it like what do you like about me honestly it's a just and they'll tell you something that is totally unrelated with the fact that you're like a dejen and bought Doge at like the hyp the Pico bottom and gig along it like they're not GNA care about that in fact they may complain about that he's like oh you're just always busy in that [ __ ] you you never give time anymore you're like so anyways don't do stupid stuff find go watch a series or whatever White Lotus is out I haven't seen it so maybe I want um but yeah it could always get worse by the way could always get yeah always get worse all right therapy sesman Santi like was a good message uh we're over

time that's the Pod thanks everybody hopefully it was a good note to end on um yeah we love hanging with you guys we'll see you Monday any any good episodes coming out other than this one we've got the on Monday it'll be Dave call andov Mark it'll be really be really good s and I don't really know what we're talking about but these guys do good good markets folks so any we'll see you Monday D David and paba are the people that I go to to talk about markets by the way yeah so see you Monday folks all right take care guys [Music]