Odd Lots - What a 'Degen' Crypto Trader Really Does All Day

Episode Date: June 14, 2024

A few lucky people have made generational wealth trading the ups and downs of the crypto market. And some finance professionals have shifted gears to focus primarily on the space. But what is it like to actually trade these coins day-to-day? How do people pick which ones to buy? How do they analyze the coins themselves? How do they get reliable information? And what is it like, emotionally, to trade such an infamously volatile asset? On this episode of the Odd Lots podcast, we speak with Julian Malinak. In his day job, Julian works in healthcare tech. But the rest of the time, he's looking on message boards for the next 100-bagger. At one point he had made enough to retire on. And then it all went poof. But he keeps grinding and trying to improve his craft. Julian — who we found on the Odd Lots Discord server — explains what he does all day, and how the market really works from a trading perspective. See omnystudio.com/listener for privacy information.

Bloomberg Audio Studios. Podcasts Radio News. Hello and welcome to another episode of the Odd Lots podcast. I'm Joe Wisenthall. And I'm Tracy Allaway. Tracy, there's been this big crypto run-up. It's pulled back over the last couple weeks. Bitcoin got above 70,000.

We haven't really done crypto this cycle. I know. We did mean... I have a theory for why we haven't done one, but what were you going to say? You just don't want to talk about your theory. No, there's a separate theory. Okay.

I was going to say it feels like a lot of stuff that's happening in this cycle has happened before. And I know part of it is the launch of the Bitcoin ETFs. But I mean, we have episodes on Bitcoin ETFs from like years and years ago. So if we do an episode, which we're doing now, I think it should be about what the difference is in this cycle, if anything. I think it's just been boring. And what I mean by that is like, it's always exciting when lines go up and down really fast, which is why I am a markets journalist in the first place. But I actually think there's almost nothing particularly interesting about this crypto cycle. And it passed one. There's like, you know, there were at least some narratives,

like Web 3 and gaming to earn and some of that stuff we did in the past or like how like Uniswap works, like kind of some interesting things about people like redesigning markets or whatever. This one, there's no thing there other than price and basically meme coins, which VCs love to write thought pieces about, but are not really that interesting. Joe, I think you are ignoring technological breakthrough that is Dog With Hat. Okay. That was not around last cycle. You're right.

So we had Doge Coin and Shib last cycle, but neither of them had a hat in the last cycle. So there have been some breakthroughs in putting cute hats on the cute puppies for the coin. You're right. That is progress. But yeah, exactly. Okay. But we are doing a crypto episode right now for the avoidance of doubt. And I think the way we are coming at it is talking to someone who has seen multiple crypto cycles at this point.

And also that if you accept the premise that basically the only interesting thing is price and why things move around, I don't want to hear from a VC. I don't want to hear from someone who's doing some layer three solution or some made-up tokenization of a building in New York City. I just want to hear from someone who rides the ups and downs and what's that right like. Because if that's actually the only thing going on, which I believe, then the only, like, true expert is not the VC or the investor or the founder, but the person who day to day is helping move that price one direction or another. No, I think that's absolutely true. The other thing that I sometimes think about is what are crypto traders doing on a day-to-day basis? Like, how do you actually spend your time if you are trading crypto? So what does research look like?

Yeah. And then the other thing that kind of blows my mind is just the amount of man hours and labor power that is spent on thinking about whether or not line goes up on chart. Totally. You know, on some level, that's all finance is. But I guess like in traditional finance, I have some. There's a veneer of respectability. There's a veneer. And I have some intuitions about how the professionals in the space make educated bets on whether the line is going up or going to go down.

There's fundamentals and earnings and momentum factors and all that stuff and people different try. And I sort of understand what they try to do, but I don't really know what the equivalent is in crypto. So I think we got to learn. And I think we should talk to, we got to talk to someone who is in the space of like determining whether the price is going up or down. Let's do it. So I'm really excited. We have the perfect guest because not only has he been a degenerate crypto trader for several years. It's the first guest that we've had on Odd Lots, who has been sourced from our own Odd Lots Discord,

an active participant in there. I'm like, this guy is a smart guy. So why don't we like talk to one of our own community members, a listener, someone who chats with us from time to time, someone who's not a VC writing big thought pieces about how the industry works and the importance of memes, someone who's just trading the coins. Let's do it. Yeah, I'm excited. All right.

I am very excited. We are welcoming to the show Julian Malenac in his professional. in his professional life, he does healthcare tech and data stuff, and then in the other half of his life, he's been trading crypto for a long time. Julian, thank you so much for coming on Ovalod. My pleasure. Why don't you just start off? You're a crypto trader. How did that happen? Yeah, so I think that my journey was somewhat typical, right? So for most of my career, I've worked in healthcare policy and technology. I was in my early 30s working in tech in San Francisco.

If you think of crypto, it's like, okay, a guy in his early 30s in San Francisco working in tech. That's kind of what you think of. You're the archetypal crypto guy. I had heard about it and had seen some lines going up and had some extra money at that time. This was 20, 21, early 2021. And from an early point, it was about the prices, right? I was curious about the technology, but it really was about, okay, these lines are going up. It seems like people are making a lot of money.

Why not me? Right. And I think fairly quickly, kind of in that first year of trading, went through the tour of opportunities available to, I think, the typical retail participant, right? So started with Bitcoin and Ethereum, went down the list to like kind of the mid-cap coins, right? So the top 100 coins that are traded on exchanges, but where there's just bigger ups and downs, went to kind of the world of microcaps. So coins that maybe the market cap is $100,000 and it only trades on some on-chain deck. It's probably going to go to zero, but it might 100x. So I had a few of those, a lot of them went to zero.

I had a few that did go up a ton and made some money. And then I also did during those first few years some yield farming, right? So basically finding some obscure D-Fi protocols where they're typically rewarding users with kind of a native token to attract liquidity. And kind of like a mercenary, I would just judge the yield versus risk and go where it was best. And then as the market went on, oddly my best week in crypto was actually the lunacrack whether through luck or insight, I shorted a bunch of stuff and made a ton. And then, I think, unsurprisingly, to a lot of veteran traders, I just gave up most of that money in the following months, right? And I think that often those kind of euphoric periods you have end up being your downfall.

And so I took some breaks after that. Luckily, I didn't have a lot of money in FTX. So I was kind of taking a break from the market after that huge, you know, making a ton in Luna and losing it. And then the past year, I've gotten back into it. focused mainly on short to midterm trades. You know, I'll be honest that the strength of this rally, I think if you had asked me a year ago, I wouldn't have seen it going as high as it did. But it turns out that the Bitcoin ETF, as you said, was a pretty big deal. So yeah, I've continued to trade and have been watching the markets for a while now. So you mentioned making money and losing money.

Can you talk to us a little bit more about what kind of numbers we're talking about here? and beyond the Luna position, what was the split like between money you made from yield farming versus money just going long or short certain coins? You know, I started with low six figures in crypto, made, I think on my best kind of small cap position, seven figures. And then Luna was my all-time high. And I could have kind of retired, not with a ton of money, but enough to live on for a very long time. And then gave up most of that. I didn't lose everything, but gave up what was seven-figure gains, essentially. What's that like?

Going from having money where you're like actually can think about retirement, even or maybe a modest retirement to losing seven-figure. And then not being in that position. Yeah, it was funny because this is so fitting. So I live in New York, right? And I remember in 2022, it was like the week that I started looking at these nice apartments to buy with cash was the week where I wiped out 40% of my network. And I think that what happens in crypto is basically it happens on both sides, right? So you're early to some trend. So in my case in 2022, I was early to the shorting. Or maybe

you were early to the bull market, right? And you keep riding that. And you grow more confident, right? And you're betting bigger and bigger. And people you know who are being conservative are making less money than the people who are being really aggressive. Right. And so you get more and more aggressive. and then it violently shifts. Two weeks ago, I heard a ton of stories from traders I know who wiped out months and months of gains in literally minutes, right? And I remember when this happened to me the first time, you know, it was literally months of, I would like to say, hard work, maybe some luck wiped out in, you know, an hour or two.

I had at the time been, I think going on very little sleep. It was nauseating. It's hard to feel sorry for someone who's just like gambling, right? But it was kind of traumatic in the sense that it was just so sudden and so fast. And I think it really was pretty hard to recover from that from a trading perspective, right? Because you think about, oh, man, I really want to get back to that all-time high and you're chasing that. I would be upset if I lost that amount of money. Everyone would be upset, I think.

Yeah, I can't even fathom it. It does seem like it's like a meme, right? People even joke, like when the coins are going up, they're like, oh, I'm going to load zillow. dot com right now. So you should probably start shorting. And so it's very funny that you were literally looking at apartments to buy on all cash. I'm kind of disturbed by my mindset in those times. And I've had two or three times like that.

I think the worst was in 2022. But since then I've had a few blowups like that. But you know, I've had some huge wins too. But it's just, it's really hard after you've had a series of wins to step back, right? Because you just want to keep going and keep going. So you said something interesting. when you got into the crypto space about you were mostly interested in just making money. So gambling on the price of a particular token.

But there are a lot of people out there who assign particular values, let's say, to something like Bitcoin or particular narratives, maybe is a softer way of saying it. How come you didn't get interested in that aspect of crypto? I think when I got in, I was actually not that cynical. thought you could do both. And I remember the really cool thing about that bull run, as Joe said in the intro was like, it was like using Uniswap for the first time. It was like, this is, yeah, I'm just speculating on tokens and this kind of feels disconnected from the real world. But man, this is so fun. It's really cool to be a participant. I thought the technology was interesting and fun if maybe there was kind of a lack of real world relevance. I think since then I've gone through cycles of

being more or less cynical. And I think that when it comes to narratives, I kind of think of four central ideas that people talk about with crypto, right? So the first one is basically the casino, which is it's about the tokens. People trade the tokens. Exchanges make a lot of money off people trading the tokens. And that's what the space is about and everything else is kind of narrative fluff. The second narrative idea is kind of the store of value. This mainly applies to Bitcoin. This is digital gold, and people even take it further to talk about Bitcoin as kind of a reserve currency or a monetary standard. And then the third kind of category of fundamental idea, for lack of a better term, I'd call future of finance. And there's a few sub ideas here, right?

So one is around being your own bank, which is essentially the idea of interacting with financial products without the need to trust a big bank. I can use AVE and I'm just trusting the code. The second sub-idea is effectively kind of modernizing the financial system, right? So it takes, what is it, a day for stocks to settle when I do a trade, and on, you know, Salana, it's nearly instantaneous. And then the third thing is this idea of tokenizing marketplaces. So I think helium is kind of the poster child of this, right? I can essentially bootstrap a marketplace using a token that I just create out of thin air.

I actually find that really interesting because for my money, it's like the thing that crypto's really good at is people can create tokens out of thin air and people really like to speculate on them. And if you can use that to do something in the real world, that seems pretty interesting. And then the fourth category I think of as Web3. And this is the be your own bank idea applied to the consumer internet, you know, whether it's a social network or a game, am in control of my own content. And I think the odd thing about it to me is it feels like people are either entirely skeptical, like it's just a casino or they're entirely on board. And it's like we're creating the future of finance and the internet. And to me, I kind of have come around to,

like, it's mainly a casino. And I'm kind of interested in some of these other ideas. Like, I believe in store of value. And I think that the idea of tokenized marketplaces make a lot of sense. I think web three I'm fairly skeptical of. But I think the ideas are quite a bit different. And sometimes it feels like crypto's kind of just like searching for a narrative that catches on among this kind of laundry list. Yeah. And some of them are contradictory, too, store of value versus casino lottery ticket line go up. So in the process of identifying the next trade, people turn this around on the stock market.

And I get there's plenty of just pure gambling in the stock market, but also in the stock market, like there is such a thing as people who make money by looking at fundamentals, like deeply looking at how this company is getting real user traction. They're really selling a product. Like in the process of identifying the next 100-bagger microcap winner, is there alpha to be found in actually identifying a connection between what the so-called project is and actual attraction? Or is it mostly sort of the reflexive war trading of, I am going to be long this because I have reason to think that tomorrow someone else will be long this? I think that it depends on the type of trading you're doing and the type of thesis.

In my experience with kind of the microcap on chain coins, you really want to have a thesis that is kind of orthogonal to price, right? There's this marketplace called pump. Fun, which is like anyone can create a coin there and it just gets liquidity without any cost. And there was like a meme coin that was like the first one there, right? And I don't own it anymore, but it was kind of like, well, I think people will get on board with this because Pump.

Pump. Fun is getting a ton of volume, and this is like a proxy to be bullish on pump. Dot fund. By the way, I'm not shilling this coin because I don't own it anymore, but that's an example of a thesis that is not directly related to price. One of the best trades I ever had actually was Poo coin back in 2021. And that was actually a very thesis-driven trade, right? Because it was an application that people used to track their kind of low-cap coins and it had this meme coin attached to it. I think if you're just trading technicals, on small caps. It's a tough journey because it kind of is a zero-sum game and the insiders and developers have an edge against you as a retail investor. So I think you have to have some idea that is,

you know, somewhat original and is not reflected yet in price. Tracy, yeah, one thing I noticed is, like, I've seen projects that'll say things like, we're the first dog coin that launched on avalanche. And it's like there's no real thing there except people are talking about this new layer one chain. So obviously, you want to buy the first dog coin associated with that chain. It's like a newspeg, right? It's a newspeg. You need a thing to hang interest off of. But Julian, so you mentioned some thesis-driven trades, but talked us a little bit more about what the day-to-day actually looks like if you are in the crypto market. It doesn't sound like it's researching the underlying technology necessarily, but are you in the message boards? Are you trying to gauge?

upcoming interest in a particular token or coin? So I'll answer that by just going through the routine I follow when it comes to trading. So generally, I try not to trade for the first half hour or so after getting up just because I don't really know what's happening in the market until I've had a bit of a time to digest it. I'll go in some Discord groups. I'll go on Twitter. I'll look at the charts. And I'll often have a hypothesis about how both the week and the day will unfold. And that just helps because I want to have a hypothesis that's falsifiable. So I might look at the markets and say, I think it's sideways bullish today, right? So I kind of want to look for longs and maybe some countertrend shorts.

And so I'll maybe have a few trade ideas. And often for me, it's like I'm looking at maybe Bitcoin Ethereum, maybe like a few alt coins that are particularly volatile that day. And basically, I'll just kind of, you know, look at the charts and some of the technical tools that we can talk about. And I'll have a hypothesis that's like, okay, I'm kind of bullish on the day. So I want to get into a long position to this coin. But I kind of bet it goes back to this zone.

So maybe I'll set a price. alert, right, for a few coins where it's like, I'm, I don't want to just ape in immediately to the upfront. I want to wait a bit. So maybe I've spent the first hour or two kind of getting a handle on what's going on in the market. Is there any major news? Setting some kind of price alerts for areas of interest for different coins. And then honestly, it's kind of waiting around just observing, right? And often I'll kind of have a feeling of like, okay, am I understanding what's happening, right? If I think that it's a sideways bullish day is, is it playing out like that? And maybe one of my alerts goes off, right? And it's kind of like, okay, this coin is kind of in an area where I

thought it might be interesting to long. And so I'll kind of enter a position. And once I've entered a position, then at least for like short to midterm training, it becomes a matter of actively managing it. And if the thesis is, I think it's going to bounce around here. I want to see a pretty quick reaction or I'm out of the trade. Once I'm in a position, I'm kind of watching closely. And I don't want to necessarily overmanage, but if the thesis is one about how it reacts, you know, in a kind of minute-to-minute basis, if I'm not seeing what I want to see, then I want to get out of the trade immediately. So that's kind of one type of way I deal with short-to-mid-term trades. Another way I might spend a day is kind of looking at different narratives, right? So like recently

some of these real-world asset coins have done well. So like Ondo Finance is one that's, they're like taking treasury bonds and putting them on chain. And it's kind of like, I was looking into that a while ago. And it was like, I just think people are going to get really excited about anything that relates to the real world because so much of this space is so abstract. And so, you know, Ondo's one, but are there other coins that are in this real world asset space? So I'll kind of look on Twitter and maybe Masari, which is kind of a good research service that puts together different articles. And I'll kind of get a sense of, okay, here's like five coins in this rural asset space that maybe I want to get into long positions on. And then I'll look at the chart and say, okay, maybe I'll enter now. Maybe I'll

wait a bit. But really, a lot of it is just about, I have a hypothesis about how price will react or I'm looking to get into a position. And then I'm just waiting until that happens. For me, when I think about the times I've made money and the times I haven't, some of it is luck, sure, but there's this emotional state when I'm doing well of almost a kind of bored curiosity. It's like the opposite of FOMO, right? So I just want to be sitting around. I may be watching the price action. And it's really boring because I'm just waiting to see something clear. And, you know, most of the time in the market, you just don't want to be entering. So that's kind of a typical day.

And it's not that exciting, I think, if it's done well. I find that actually very interesting. They say, like, professional poker players, which seems like it would be fun. If you're doing it well, it should be boring. And that actually is this miserable existence of spending 12 hours in a day and mostly folding your hands and mostly letting cards go by and they're waiting for opportunities. Poker well played in a cash game in a casino. is not fun. Something I'm curious about, you know, with the launch of the Bitcoin ETF, for the first

time, there is a segment of traders that is on New York time specifically. Bitcoin and crypto's always been 24-7, but now there's this segment of trading that happens between 9.30 a.m. Eastern and 4 p.m. Eastern, maybe some after-hour stuff. I don't know. Can you talk a little bit about time zones and the different flavors of the market between when New York is up versus Asian hours versus maybe, I don't know, if European hours inflected so much. Yeah, that's a good question. And it's funny because some of the better short-term traders I know will talk in great detail about the different zones.

And it's like, this is the London kill zone from these two hours. I'm just like, can we just not get so free? But I do think the markets offer some differences, right? So I think the New York hours tend to be, at least for what I do a little bit better, there's a little bit more liquidity, the wicks tend to be a little bit less involved. Overnight for me, as someone who lives in New York, like the Asian hours, there just tends to be a little bit more scaminess. By scammingness, I mean like weird kind of wicks and stuff. And it feels like liquidity is often lower. It's funny because I sometimes like to trade these

kind of long-tail alt coins. And sometimes you just see like really wacky things happen at strange hours. Right. So it's like, here's a project. that is like founded by, you know, an American team and backed by American investors. But for some reason, there's just a ton of interest in this project at 3 a.m. on a Friday night. And it's like, I wonder what that is. You know, and it's manipulation, right? But I think sometimes you see some really interesting manipulations in the Asian hours, right, where there's not the big kind of New York liquidity. And that can be fun to trade. I think that as someone who, you know, sometimes likes to short things, I've definitely been

tapped out a few times because I've gone a bit too early on. some of those scammy up trends. In terms of being tapped out, this is the other thing I was wondering, but what sort of risk management goes into positions here? And how are you keeping track of them? Because I imagine you're probably using a wallet, maybe multiple wallets, maybe different platforms. How are you sort of netting out those positions and managing that risk? I think now I try not to do many trades at once. And again, it's very easy to sound wise about risk management and it's much harder to follow my own advice. But what I try to do is, especially with these kind of either a short-term trade or a counter-trend trade, typically I want to see reaction

immediately. As a rule for myself, I have to have a stop loss, right? In other words, if I'm longing a coin that just dropped 30 percent, I'm going to have a stop where if it goes below a certain price, I exit the trade. But really, I want to exit the trade immediately if it's not reacting the way I want it to before it hits my stop loss. So I think for me, the best risk management is, yeah, you have a stop loss. I don't want my account to be liquidated like it used to happen to me. But I really just want to cut immediately if it's not going in my direction. And particularly on a trade that's like I'm shorting a coin that just went up 50 percent or I'm longing a coin that went down a lot. Right. You just have to be really decisive. In terms of trade management, there's various

tools out there. I just track it in an Excel sheet that scares, you know, the trade. here's the idea behind it, here's how much I made or lost. I think it's a little bit different for longer term positions where it's, I'm just going to buy some of this spot coin and try to hold it for a few months and see what happens. I still treat that as a trade, but it's a little bit less. Maybe I don't have a stop loss because it's just a spot position. So you mentioned as part of your research or news consumption gathering like going into

various discords. And one of the things that strikes me about crypto is like, A, everyone is highly aware of the existence of manipulation. B, you sometimes hear people talk very overtly about being part of a pump and sometimes like I'll get, you know, it's like this is a group and like, you know, I sort of work together to like build hype for the coin. And I get the impression, though maybe I'm wrong, that people are searching for the inner sanctum, finding that one telegram group where there really is like people who can move a market or the one discord where there is real alpha. Can you talk about like the process of identifying where good chat happens?

I've been in a lot of different Discord groups and some of them are like people giving trade setups. And it's always interesting how you can have two traders trading the same trade setup with dramatically different results because of how they execute and manage their trades. The best groups I'm in and I'm not in that many now are just a relatively small amount of people basically talking. It's people sharing ideas. Maybe there's someone who's quite good and they're giving some setups. It's not just like, here's a trader giving a trade setup, right? I think those rarely work. And there's even kind of memes like the Kramer, ETF, the reverse.

There's even things of like, here's this crypto influencer who's always wrong and we should fade them. Right. I think you're right that there is this notion of, okay, a lot of these pump and dump groups you don't want to be in because by the time they're shilling it to their followers, the pump has already happened and they're going to dump on the followers, right? I have not found a lot of people that have successfully found the inner groups, right? I think the better move is to just try to identify the pumps somewhat early. And I think the bull market, like a few months ago, this was particularly good at this, right?

So, like, there was this coin Tia, which is like a modular blockchain token. You know, maybe it's, you know, revolutionary technology. But the important thing is, like, it was kind of a hot narrative and a new token. And it was just going up. And I knew a lot of people who got in early. And it was kind of just like, I just think that through manipulation and through a lot of fomo, this thing is going to go a lot higher. And it did.

And so I don't think you need to be part of a pump and dump group. I think if you are an alert trader, you kind of identify some of these opportunities. I do think it's becoming a bit harder kind of the past week or two since the market has been a little more choppy and a bit down. Obviously, you've been trading crypto and we've been very focused on that in this conversation. but have you ever been tempted by more, well, I don't even want to say traditional assets, but something like zero day or one day options on equities, because you could potentially get the same satisfaction of seeing the line go up in a relatively short amount of time.

I have thought about it. I think that I would like to think that I'm not just purely gambling, even though I think that a lot of what we're doing in crypto is effectively gambling. When I think about crypto, and I think that's a fair question, like, why trade crypto versus another market, right? I think one answer is because you think it's an important technology and you want to invest in the future. And I would love to believe that more than I do. And I do believe that for a few things like Bitcoin and maybe a few specific coins. But I think the reasons are more of like the trader reasons, right? So I think that the manipulations in crypto are just more apparent than in other markets.

So one thing you often see is like stop hunts, for example, right? Say there's a coin that's like gone down, it's gone between $12 and $15. You'll often see this quick wick below $12 and then it'll pump to like $20, right? And what's happening there, and again, it's very, it's not that simple to trade this, but what's happening is like there's a bunch of long positions with their stops below that kind of recent low of $12. So what the kind of market is going to do is it's going to manipulate the price below that. it's going to tap all those people out and maybe liquidate some positions. And then often it'll reverse.

And I remember when I started trading futures, I kept losing money because I would place these obvious stop losses and they would get hunted. And so one thing that I think I'm doing when I'm trading well is I'm almost counter trading myself, right? I'm counter trading who I was when I started trading futures, which was like, I'm just going to place this obvious stop because if it goes there, it's probably going to go a lot lower. And so I just think those opportunities are not quite as good in traditional markets. That said, they're not easy in crypto. It's just that I think that it's a little bit less

efficient. And by the way, I'm not sure how long crypto will stay that way, right? I could see a world where in five, 10 years, it's just been captured a bit more. Yeah, it does seem what you say makes total sense that various sort of quasi-manipulations are more obvious. It's clearly a less liquid even Bitcoin, less liquid, less efficient, wider spreads than legacy markets. Yeah, and I think they're all double-edged swords, right? So, like, yes, they're manipulated and inefficient, but I've been on the wrong side of predatory manipulation before. And, like, I don't blame anyone but myself. I kind of wish that I had a view that it was really bad, right? Because I feel like for the stock market, I think that kind of blatant manipulation and pump and dumping

is kind of a bad thing. And I wish that my. view of crypto was like, this is a really serious space where we're creating really important stuff. And I would love to think that in a few years, right? And I'd love to kind of see more projects where I take it seriously and think that manipulation is bad. But I think for now, it's like, that's more of a feature than a bug as a traitor, right? Yeah, yeah. Can I ask a slightly personal question going back to this idea of you being in some ways the archetypal crypto trader? Why is it all guys? That's obviously a massive generalization. I'm sure there are some women out there trading crypto, but it does overwhelmingly seem to be men. Because the other thing I would say is when we go back to the

narratives and this idea of like we're building a fairer financial system, it always struck me as crazy that we're going to build a fairer financial system with Bitcoin or whatever and half the population is basically being left out of it. Yeah. So it's definitely overwhelmingly young men. I meet people who are in their teens up to like early 40s, right? It's fairly global. And as you said, there are some women, but very few, particularly I think in the kind of trading world. You know, and I'd kind of be curious on how does it compare to other forms of speculation, like among the population of people who are doing zero-day options. I bet that skews male as well, although probably not nearly as much as crypto. I think that part of it is the culture, right? So there's

definitely this vibe among a lot of traders, mostly young men. And I don't really believe this, but it's kind of like, this is your last chance to get rich before the fall of Western civilization. Right. And I don't believe that, but like, that's kind of the feeling. And like, it kind of is adjacent to kind of the hustle culture. Right. And the kind of like, be a man and, you know, hustle and make your own way. And I think that's definitely part of the culture of crypto. I think that there is kind of this human capital component that like when I think of my career, like not to toot my own horn, but I feel like I've been pretty good at the jobs I've done. And you know, I've spent a fair amount of time trading now. And I'm kind of like, is it is it a great thing that a lot of guys

like me are spending all this time gambling? I don't know if it's, it's awesome for society, right? I feel like I can say that because it's it's being hard on myself more than anyone else, right? But I think that's kind of another thing about crypto, which is, I think one way to think about it is like there's a supply and demand for gambling and speculation, right? And so when I walk around New York and see the sports betting ads, right, it's kind of like, oh, this is kind of meaningful competition, right? We're talking about kind of the demand among mostly young men for, you know, speculation. And yeah, what are the options? We have crypto, you have sports betting, you have things like zero day options and meme stocks. With that said, I really hope that I'm not super

optimistic, but I would love for in five years to be like, wow, this market created all this useful stuff and it's more like the stock market and yeah there's speculation but it relates to these things in the real world in a more tangible way but right now it does feel like it's mostly guys you know speculating yeah it feels like that to your point like that's sort of like and it probably is the fight club philosophy of if you don't make a fortune now before you're like 25 you're going to be doing a nine to five office job until you're 65 and then they'll give you a watch and then and it feels like that message just gets hammered home over and over again, that if you don't score the big bag, soon you're going to live a life of basically working for the man and some miserable existence

under terrible fluorescent lighting for the rest of your life. It seems like that. So I want to, you know, I like talking to you because you're frank about the fact that you like trading it, but that maybe your aspirations for the technology may not materialize. I feel like one of my frustrations when I talk to people who are professionals in the space, particularly operators or VCs, not necessarily traders. Like, I feel like I'm frequently being gaslit in the sense that they'll tell me something about some extraordinary thing that they're doing that's important technologically. And my sense is that at root, they're you. And that at root, they're like, they're just in it for the gamble. And I'm curious in your interactions with various people, parts of the

ecosystem, is this just me being like sort of like super cynical and I should be more open? Or do you also observe this gap between like, you know, we're like building this really important thing for tokenizing real world assets and bridging them across chains, et cetera, but that at heart, it's about the line. So I think that in my experience, I've talked with a lot of both venture investors and founders. And over the past year, I've kind of was curious about whether there was something useful I could do with crypto and was kind of have been working on and off on this idea of like, you know, I've worked in health data and it's like, okay, I like the idea of tokenized marketplaces.

Is there a way to kind of incent people to contribute their health data using a token? Right. And it's kind of just like, well, you can create a token out of thin air and that's a better cost of capital. So there are some interesting ideas here. And I've talked with a lot of theseses and founders and kind of try to suss out this question as you mentioned of like, do people really believe in this stuff? or are they just like me?

Like maybe they believe in a few things, but mostly they're just trading the narratives. And I've come around to the fact that I think most people actually, yeah, maybe they're trading and pumping and dumping a little bit, but they do believe in the technology. And I say that just because it's just hard to work on this stuff. And I think it's hard to raise funds from like LPs if you don't have some conviction that we're actually changing the world. And I don't want to say that everyone's just, you know, it's all motivated reasoning. right. But I think that for better, for worse, that's what a lot of folks believe that the stuff really is going to be revolutionary and that the infrastructure we're creating will really have an impact. I'm skeptical of most of it, but I hope I'm wrong, right? And maybe I am. But I think that

your instinct to be skeptical is correct, but I would just say, I kind of want to take people at their word, you know, and if people are really saying that they think this is going to be this revolutionary technology. Like, I think it's worth arguing kind of on the merits of that. I have just one more question, which is, if you made seven figures again, would you stop trading crypto and retire? So I've done fine recently. I've, you know, made some money. I think that what I would do if I were to kind of, I don't even want to say my prior all-time high, which was quite a bit. I've tried to just let go of that line of thinking altogether, actually, because I think a lot of the problem I ran into was basically having this notion of making it back. And so for me, I've tried to get rid of any notion

of making a certain amount and just more focusing on the discipline of trading. I do think that, you know, and it goes back to the human capital part of this, I don't want to look back and be like, oh, I just traded for years and years on end. Because when I look at my career, I think the other stuff I've done is probably, you know, more valuable. And I think maybe there's like some way I can bring crypto into the other part of my career. Yeah, I don't want to be trading for like decades and decades. But the notion of getting back to a certain number and then quitting, I don't even want to think about that because that got me into a lot of trouble. Just get back there than sell half. Julian Malenac, so great to have you on. Great to have our first discord derived guest. People

should come into the discord and chat with Julian. And great to have a, sort of a very fresh, honest, nuanced take on crypto, which is sort of rare. So really appreciate you coming on my hotline. Thanks so much. Tracy, I really enjoyed that conversation. It was super interesting. I appreciated that he was like kind of cynical. Like I am, but not totally cynical and seemed fairly honest about like where his own like sort of marking to market his sort of thoughts in real time. Yeah, it was also interesting to hear, I'm not sure I want to say due diligence, But the trading process on a day-to-day basis. And I think, like many things, it's not one extreme or the other.

It's not just throwing darts at a board of tokens, but it's also not developing fundamental theories of technology and the future all the time. It's sort of somewhere in the middle. And then, again, the importance of narratives, which I think we got into it, but especially when it comes to Bitcoin, one of the strengths of Bitcoin at this point has to be its ability to contain. multitudes of narratives, often conflicting ones, as I mentioned, and just jumping from thing to thing, like disintermediating the entire financial system, but also boosting profit margins for Black Rock. I don't know. I'm going to say something that I am purposely leaving to the end, so hopefully maybe some people are already tuning up by now.

Yeah, so I'm going to say something, which is I've developed this theory of crypto. I'm trying to think of how I can say this in the least insulting way. I'm not going to use any name calling. But what I think is that trading is fun in the sense that it's exciting to bet on lines. And I've done that in past lives or 20 years ago when I was in college. I had a good time. Made and lost some money. I think that it's very hard.

And most people intuitively know that it's very difficult in the stock market because there are armies of professionals looking at every piece of data, every piece of fundamental data, every piece of factor data, every piece of flow data. There are multi-billion-dollar institutions that have been doing this for decades. There are thousands of books that have been done on how to do this. I think most people intuitively know that it is difficult to find some sort of edge in security selection. And I think that one of the attractions of crypto is basically a stock market for... Oh, here we go.

Yeah. For who? It's an easier stock market. Yes. That it's kind of like stocks, except it seems a little easier because you could say, yeah, I think that the first dog coin on PumpDod Fun will do well. I think that people are going to be into tokenization regardless of whether tokenization is happening. A nice way of saying it would be it's a more level playing field in some ways. In some ways, I believe.

And even hearing Julian describe that one nice thing, potentially if you're a little bit savvy and crypto is understanding manipulation patterns, the ease of identifying stop hunts. I like the way he put it where he says, I'm trading against the 2021 version of me that left very obvious tells in the nature of the way I traded. It feels like a stock market where you don't need to be a super pro CFA to win. Here's what I think. It's all about the narratives picking up on the next big thing that's going to drive the price either higher or lower. And in that, respect if you're just a person that spends a lot of time on the internet, you might have a better handle. That's a great point. On those narratives. That's a great point. Like if it's all about the

narratives, then, you know, maybe really just being on Twitter and the discords is actually alpha. Yeah. And if it's all about the narratives and the stories, you either trade crypto or you become a VC, I guess. Yeah, right. It's the same thing. All right. Shall we leave it there? Let's leave it there. This has been another episode of the All Thoughts podcast. I'm Tracy Allo. You can follow me at Tracy Allaway. And I'm Jill Wisenthal. You can follow me at the stalwart. Follow our guest, Julian Malinac. He's at Julian Malinac. And you should come into the discord and chat with Julian because he hangs out there. Follow our producers. Kerman-Romondreg. Dashel Bennett at Dashbot, Kail Brooks at Kail Brooks. Thank you to our producer, Moses, on them.

For more odd lots content, go to Bloomberg.com slash odd lots, where we have transcripts, a blog, and a newsletter. And check out that discord, discord.org, g, g, slash oddlots. And if you enjoy all thoughts, if you like this conversation, then please leave us a positive review on your favorite podcast platform. And remember, if you're a Bloomberg subscriber, you can listen to all of our episodes absolutely ad free. All you need to do is connect your Bloomberg subscription with Apple Podcasts. Thanks for listening.