The Pomp Podcast - #1307 Alex Kruger | Bitcoin ETF Is A Trojan Horse!

Episode Date: February 7, 2024

Alex Kruger is a trader from Argentina, and he continues to figure out what is going on in the macro economic world, along with cryptocurrencies. In this conversation, we talk about why he is incredibly bullish on risk assets, relationship between Milei, Bukele, Trump, Zelenskyy, United States national debt, bitcoin, cryptocurrencies, how he evaluates assets, and portfolio construction. ======================= This episode is brought to you by Frec — Just as easy as investing in an ETF, Frec Direct Indexing can help you earn more by unlocking tax savings, no matter the market. Done for you, automatically. Check them out at ⁠⁠⁠⁠⁠⁠⁠https://frec.com/⁠⁠ ======================= Get Better Crypto Data: Do you want faster, easier crypto data? Sign up for Velo Data, a new product that we have been working on to solve this problem: ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠velowaitlist.com⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠ ======================= Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/ ======================= View 10k+ open startup jobs: ⁠https://dreamstartupjob.com/⁠ Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

What's up, everyone? This is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. Today's episode is with Alex Kruger, a trader who's from Argentina, and he continues to figure out what's going on in the macroeconomic world, along with cryptocurrencies. In this

conversation, we talk about why he is incredibly bullish on risk assets from here, why he thinks that Malay, Bukele, Trump, Zelensky, and more are all related, how he's thinking about the United States debt, what's going on in the Bitcoin and cryptocurrency world, how he evaluates assets, thinks about portfolio construction, and where he is putting his money now. I always enjoy talking to Alex, and this conversation was no different. I think you will learn a lot from it. So once you get done listening, make sure you share it with your friends. Tell them to listen. Tell them to subscribe. Here is my conversation with Alex Kruger. Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast

are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only. This episode is brought to you by Freck. Historically, the wealthy had a hidden secret in investing. They would spend a lot of money and use very big teams to conduct tax loss harvesting. Tax loss harvesting is the timely selling of securities at a loss to offset the amount of capital gains tax owed from selling the profitable assets later. But now FREC is bringing this incredible advantage to any investor.

They'll literally lower your tax bill regardless of how much money you have. They use state-of-the-art technology through a product called direct indexing to allow investors to invest in the S&P 500 while getting all the benefits of tax loss harvesting without the big bill. If you want to learn more, go check them out at freck.com. That's F-R-E-C.com. I'm a big fan of the product and I even became an investor in the business. Freck.com. Go check them out today. Before we get into this episode, I also want to tell you about a brand new product called Velo. Velo is faster, easier crypto data. Everyone in the industry is always looking for what's the price? What's going on on the exchanges? Where are assets flowing or not flowing? How is things like open

interest and derivatives actually playing out in the market. Well, that's where Velo comes in. It's faster and easier crypto data. You can go to VeloWaitlist.com today. Myself and a couple of friends, we invested in the business. We're advising the founder and we think it's pretty cool. This one is something that keeps me informed on a daily basis. So you should check them out at VeloWaitlist.com. That's V-E-L-O Waitlist.com. All right, guys. Bang, bang. I've got Alex here. I thought a great place to start this conversation is a recent tweet that you put out, and I thought it just was a perfect epitome of the current situation. You said, let me tell you why I remain very bullish on risk assets. Inflation is coming down.

Interest rates as well. The U.S. economy remains strong. Soft landing is becoming a reality. Trump will win. Peace talks are in the air. China just turned dovish after two-plus years. Quantitative tightening will end in 2024. Global liquidity is increasing.

And AI-driven growth is in the process of accelerating to a point that human mind can't even comprehend. Does everything just go up from now? Is that where we're headed? Just risk assets are all going to go up? I do think so. I do think at the same time that on the short term, the market is a little bit too hot. Kind of like the example, the analogy would be this looks like June last year. We're about to, I think, pump up a little bit more and then correct.

But I think it's important as an investor and a trader trying to differentiate between short-term trends and the bigger picture. And the bigger picture and the larger trend, it is based on what you just paraphrased. It's up and strongly up. Short-term, definitely right now the market is a little bit hot. way to think about this is this is mainly driven on the risk asset side by the fed people from december so we are literally seven weeks into into into that expansion and it's been pretty significant so it's mostly in the price the pivot and the soft landing narrative is becoming consensus is not yet consensus there is a lot of people and they make me a bullish return

rhythm that that firmly believe that the economy must undergo a severe recession based on basically a very limited sample size from past past crises and one one more thing to add there or at least one more thing is when we're looking i think when we're looking at trying to anticipate what the future is going to be based on what the past has done and the sample size is so small and stretches through such a long period of time like the sample starts with 1929 right it is not correct to put the same weighting it's this is very subjective but i firmly believe it's not correct to put the same weight to events that happen in 29 than in 59 than 81 than 87 2000 2020 and and right now because it's a different world it's a different market the

The Fed is an entirely different animal with so many tools at their disposal. Before, they just basically managed the Fed fund rates or the discount rate. Now they have the ability to do so much more. Something else on that, a couple more things. Trump. I think Trump will win. I'm not Republican. I'm not a Democrat.

I'm not even American. If I would if I would vote in the past, I would have voted Democrat since in the last few years, I have gone to the right. I would vote Trump nowadays, even though I'm not a fan of him. But leaving aside preferences and views, I strongly believe that Trump will win. It's going to be a home run for for him. His campaign is extremely well organized this time, unlike prior times, and he has a very weakened adversary on Biden. And even though the U.S. economy is actually stronger and much stronger than many people think, there is something else, which is perception is not in line with reality. Because of how strong inflation has been and was between 2020 and 2023, not any longer, most people are unhappy.

And also there is something else. Inflation has also driven a big wedge into society and society, U.S. American society and actually worldwide society is becoming more and more polarized between the haves and the have-nots. What that means is not that they have not voted for Trump. What that means is they vote against the status quo because they are unhappy. So I think Trump will win. And historically, actually, Democrats are slightly better for stock markets than Republicans. But there is something else there, which is Trump is obsessed with winning and obsessed with the stock market. So, based on that, I think Trump is good for the market and something else that Trump would

likely bring up is a threatened Federal Reserve. He's going to bring back, let's remember these ghosts that we experienced on his presidency. I think it is likely that he will go after the Fed again and threaten their independence. What that translates into, I believe, I may be wrong, but I believe that that basically pushes interest rates, short-term rates down and long-term rates up, basically a more dovish Fed when they shouldn't be as dovish as Trump will want them to be, is going to basically literally bring short-term rates down

and inflation fears in a backdrop of basically exorbitant debt issuance in the U.S. I'm not certain, actually, if long rates are going to go down, but not as much as short-term rates or actually up. I lean towards the former, but it could very well be that they end up going up. The point is for yield curve steepening, and that is – And that is, I dare say, is largely good for risk assets in aggregate, not great, but is very negative for the long end of the curve and also for mortgages. So I'm not painting a disaster scenario. It's just a driver that makes things not as rosy as they would otherwise would be.

I just just one last comment on that. It's the U.S. debt right now is growing about six percent per annum. It's absolutely unsustainable. You know, you know, everybody knows. Well, so we just saw the Federal Reserve chairman, Jerome Powell, say that on 60 Minutes. Right. And where normally I said, you know, they don't somebody in his position wouldn't kind of fire at others in leadership positions. He's kind of an independent. He normally would just say, hey, you know, I don't have that much to say about this. But to say it is unsustainable over the long run seems like it was almost he was issuing a warning. He was telling the American people, hey, you should be paying attention to this. And when you see the national debt now over $34 trillion, the interest payment alone has now crossed over $1 trillion a year.

How do we reverse this or how do we get out of this situation, in your opinion? I think it requires very long-term change in the economy. uh in in economic behavior by market participants it takes a it's going to take a very long time but there is a way out i think there's only one way out which is basically growing and growing a lot so uh in a way you we could think and and try to to make an analogy with what happened in the late 90s with the with the bill clinton administration uh the us actually ran for a brief period of time, fiscal super habit. It is feasible, but we've gone, the US economy and the world economy has gone so far out that it's going to take a long time and it's basically about

growth. And I think that's a reality. I think it's going to happen because it's tying it back to AI. The market commentators tend to think, and especially traders, that it's overrated, that AI is not going to solve all our problems. And yeah, they're right, but AI is, in my view, and I'd be surprised if I'm proven wrong in 10 years, is the most significant change in history. And it's going to happen at the fastest pace of any change in history. the change is going to be so dramatic that we cannot even understand how things are going to change because it's not going to be us anymore thinking about this. It's AI, right? So that's another thing that ties into this thinking of we should not be extrapolating the past as we have.

We need to be open to this time things may be different. And in fact, this time things have already been different. when it comes to the yield curve inversion that basically got absolutely everybody bonkers, almost everybody bonkers, and calling for a very hard recession since literally starting in 22 and went all through 23. And it didn't happen. This time is different. One of the places where there is radical change underway or an attempt radical change is argentina this is a country that you understand well uh you spend a lot of time thinking about uh i believe um and malay has come in there and he was elected with a very clear i'm

going to go implement radical change uh from what i can tell as an outsider it appears that he has already taken some steps some measures that he's trying to implement and kind of fulfill the campaign promises so it wasn't appears to be just talk but he's actually trying to act on it what What is your analysis of him, his campaign promises, and whether it can be successful? Can he turn that country around? Well, I'm born in Argentina. I grew up there. I'm Argentine.

I'm what you would define, what people may define as Argentine diaspora. Argentina has had a long history of crisis after crisis from the generation that left uh uh in the early 2000s uh when uh basically the uh the the socialism took took over the country again after the the argentine peso imploded and uh we abolished the convertibility law that had best effect to the daughter one-to-one i was in fact actually working on the ministry of economics at the time um so uh that that said i am uh i see in malay it's crazy it's it's the first politician in my entire life that i feel connected to he speaks to me uh it's uh i i do believe that governments are a bloated parasite just sucking our blood and uh that's what he's

that's exactly what he's trying to achieve is like going after the bloat going after all the parasites and get rid of them and uh how successful can he be it's difficult because he has very little support in congress he has under eight under ten percent of congressmen are his uh with his alliance is he's the congressman he has are in the low teens it's nothing so the way I see it is he has to survive he needs to survive the first two years and go into the midterms they're going to happen in two years and then basically change the shape of congress to actually be able to deliver what he wants to do initially I was placing odds of him to succeed at around 40 percent I think it's higher now, higher than that. That being said, it went from 0% to 40, 60%. Argentina was,

let's put it this way, the Argentine GDP has grown about 30% GDP per capita in the last 20 years. The US GDP, I actually forgot the number, but it's considerably higher. China has done a 10x India I think has done an 8x Russia has done something like a 5x I'm pulling these numbers off the top of my head it would be easy to check them on Google

but we get the trend every other single country in Latin America has their GDP per capita by at least up 2x and Argentina has stagnated and is the 134th or 140th poorest country in the world

when it comes to that and if you go there you're going to find a city that is the capital of Buenos Aires is beautiful, is vibrant people are very intelligent very educated incredible country, huge

natural resources everywhere, how is it possible that things are not working and the answer is, it's socialism it's a country where socialists have sucked them dry but some people get offended with the word socialism and we have to differentiate, there is good kinds of socialism

responsible one well managed well implemented without theft and then you have the argentine socialism and the socialism that we see in latin america which is basically run by thieves so when you go so deep down the shithole uh an economy enters what we call a poverty trap and the only it's like a perennial negative feedback loop from which there is no escape you're stuck there and And the only way out is through what I call shock therapy, an external shock. Something from the outside needs to happen. That's Millet. It's an outsider, and he's there to break things up and try change.

So that's how I see it. I'm extremely happy about it. And by the way, let me allow one more thing from there. Things are really bad in Argentina right now. Inflation right now is running at almost 1% per month after Millet. is no money it's things may even get violent on the streets because of this but unfortunately it's uh it's there's no money it's sacrifices need to be made i mean and and when you talk about sacrifices mile leads by example he flies commercial even coach inside argentina who does

that it's it's absolutely mind-blowing like he has a presidential plane a huge boeing that that plane is sitting in a hangar trying to sell it it's that's what leading by example is i'm i'm fascinated by it yeah so we see malay and argentina doing this bukele in el salvador seems to be doing a number of similar types of things at least the outside you know external shock he may not be as inflammatory in his rhetoric or uh you know uh be able to articulate it in the same way. But one, okay, people pay attention. Two, we only need one more, and then it's kind of a trend. Is that really kind of how you see this playing out? Is that we should expect more of these external shocks that the various countries, their population are going to elect

because they're fed up or they feel like there is no hope inside of the existing system? Yeah, I do. I do. Now, this doesn't necessarily mean a move to the right. I think it's more about political polarization is whoever is on the left goes to the right, whoever is on the right goes to the left. We saw that actually in Chile about it started in 2020. We had Chile even changing the constitution to basically make it more fair to distribute profits to the masses. So I'm not a Chile expert. Unfortunately, my Chilean audience, forgive my ignorance, but I know that's been happening.

So the point there is that it's not just about a move to the right. We're going to see a move to the right in the U.S. We're going to see a move to the right in Europe this year, I think. We just saw it in Argentina. We saw it in Ecuador. In some other countries, we see exactly the opposite. I think it's about that and about whoever takes over has to be an outsider. We saw it in Ukraine.

with Zelensky. Zelensky was a comedian, right? A TV star. That makes Trump, Zelensky. You can go to Malay. You can go to Bukele. I mean, you can go around the country or around the world. There's a lot of these. How do you think that assets like Bitcoin or cryptocurrencies play into this? On one hand, the promise of these technologies and assets was it would be outside of the system, that if you bought this, it was a way to exit, to off-ramp, and almost produce an external shock yourself for your own portfolio or your own bank account. But at the same time that they're becoming popular, they seem to be getting pulled back into the system. We see the Bitcoin ETF, we see now Wall Street hedge funds, et cetera, starting to trade in these assets.

How are you looking at this asset class? I know you're spending a ton of time here right now, Given the economic overlay, the political overlay, what's exciting or where are you really focused? I think Bitcoin, the Bitcoin ETFs, instead of being massively bullish for things I'm sure you've been discussing extensively, so everybody is on the same, we're all on the same page here. I think the Bitcoin ETF is a Trojan horse. yeah it's it's basically turning we're we're we're turning bitcoin into a tradfi asset something that basically plays by the rules of the system but by doing so it's being used to onboard the system that's it's the perfect trojan horse and it's going to end up in the 401ks of millions of people that otherwise would not have this exposure and just having that bitcoin there is going to

make them think about it, and they're going to eventually, many of them are going to align the fact that they hold Bitcoin with the fact that they're deeply unhappy about how shit is going down. And they're going to connect that Bitcoin is actually an alternative. It's an alternative to the system. That's what it is. So that's how it ties up. What about other assets, stable coins or other cryptocurrencies? Do they follow that same trajectory of Bitcoin is the Trojan horse, and then here come all these other assets right behind it? Or are they something separate and different? I think it's separate and different. It's a matter of educating people. All the other assets are things we crypto natives delve in. They're very

hard to understand, take a long time to understand. They're complicated. It's difficult execution. Everything is difficult around them. So the way I see it is basically money flows into Bitcoin, and then it trickles down into all other crypto assets but at the end conceptually uh most of the good ones not all they're the same you know then we have stable coins stable coins they but stable guns do it they reduce uh inefficiencies right but at the end they are or they're soon good there's some somewhat regulated assets they will eventually fully regulate it uh regulators have full control over basically they can go to tether and circle and make them blacklist addresses um so stable coins do not fall outside the system like bitcoin does

um there is yeah it's the way i think of crypto here is it's on one hand we have the the store value on the bitcoin on the other hand we have uh payments uh on the other hand we have the uh the ability of blockchains to deliver fast settlement and generate liquidity for for assets uh in in general uh when people claims that there is no uh there is no intrinsic value there and they get so upset and you can just we can point at any of these things or just say listen just the fact that it's trading 24 7 and offers liquidity 24 7 that's value you cannot get that anywhere else uh and then we have uh we go into mean coins and yeah there that's just a speculation but people likes to gamble uh so uh uh mean coins are casinos right uh and uh so it's not just

garbage much of it is garbage but there is there is value uh under the trash um when you're when you're evaluating these things how much of it is fundamental analysis how much of it is more technical analysis um how would you describe your kind of evaluation process and and what you're using to get to sift through you know garbage and trash versus the things that may have some sort of value it's mostly uh for me at least it's mostly talking to people um to try to assess where where the market is going where the market may be going and uh if if projects have good teams not teams what people i know how people i know and respect greatly in the space they think of not the project itself but is the team has it does the team have integrity or not

um so not really asking uh and wondering where you think the price of this thing is going to go but more of who is behind um so yeah technicals matter uh it i wouldn't want to go against the trend for too long when that happens i i do what is called basically puking i just puked the whole position and get out um but um yeah it's a combination of technicals fundamentals top down macro view and uh and try to think where where what the market likes uh things like for example bit tensor tau uh on the gamify there's quite a quite a few games that are really good there is some really good uh out layer ones and they're layer twos in the market uh some already out there like core cordao uh there that nobody talks about it but it's there uh there is uh and

there's new ones coming up we have monad uh we have eclipse uh uh aztec in in uh q125 uh uh taiki there's a lot of innovation happening in this space so it's it's yeah sorry it could not provide a very very explicit uh mathematically precise answer but it's like a holistic process no but i think it's important right it's not one thing to point at like part of finding the value you is that you have to do the work. If you talk to a value investor in the public markets and looking at equities, many of the best investors, you ask them, well, how'd you find that? And they say, well, I sat and I read the S1s. I read all the Qs and the Ks. And I just went through all this stuff. And I basically figured out exactly what I thought the company was worth. And then

it traded below that. And I had a prepared mind. And I was able to go and buy it at the right timing. You may not be reading a public letter or a public filing from a crypto project, but you're doing a lot of the similar work. You're trying to triangulate what is the value of this and also what is it likely to do in the future. And then you're making investment decisions where you're risking capital. So I actually think there's a lot of similarities, more so than maybe people realize yeah yeah i agree we've um yeah just need to roll out the sleeps and get to work yeah when you say something like uh take i think you mentioned core dow i know nothing about that but uh you say it's there and people aren't talking about it how important is the social conversation

and the memes and the uh you know what i'll consider kind of the degen um coalescing around an asset in this market. We obviously saw GameStop and other things in public markets trade very differently because there was this surge of interest from non-professional capital allocators. Is that important here or can you actually look at and say, hey, we think that this is a really interesting asset, we're going to buy it. And even if those people never show up and the memes and the culture doesn't come, we still think we can make money on an asset. I think it's extremely important. It's an attention-driven economy. Fundamental value of most of these things is very hard to quantify with any kind of precision, so it's very subjective.

And most things out there, they never get to the public eye. So it's really, it's about basically the ideal world is having a team and a product that are very, very, very good, and then bring spotlight onto them but without the spotlight this this project can have the most amazing tech that if they don't know how to engage with uh the the marketplace um the the the marketplace of basically who has people who have money basically uh to to drive prices and drive attention uh great examples of this is so let me pick a a recent example so for example on Cordao Cordao is it's a pretty significant layer one it's a bitcoin eth hybrid so proof of work proof of stake they have insane engagement numbers but it's mostly Asians and people from the

emerging markets real people from emerging markets there is very little attention from the west on them uh another one uh and that can change right yeah a capable team can change that another example that is quite fascinating is what's happening with trump let's speak i'm not i don't i try not to shield in fact i don't have a position on trump but the trump meme coin it's it's just a meme coin has very little liquidity it's it's there and there comes a very significant marketplace market participant in the market and says i believe in this thing I'm putting my capital behind it for A, B, and C reasons, and suddenly it goes from being an absolute unknown coin to everybody in every chatroom talking about it. And suddenly, it's the shit in a good way.

So, yeah, it matters a lot how teams manage public exposure. How do you think about portfolio construction in a world where assets can be so asymmetric, but also there can be kind of the classic rug pulls and things can go down very quickly as well? Is it a heavily concentrated portfolio? Is it something where there's more diversification? You're trying to just, you know, more like a venture capital portfolio, trying to get power laws to take over, even though you know some will be losers. How do you do it? for me it varies greatly and what i do for myself is not what i would recommend for other people honestly because i'm a very extreme risk taker um so um i wouldn't say do what i do i think everybody should have a a very significant exposure to crypto uh i would say somewhere between five to ten percent none of that two percent thing that's that's nothing have some bolts um but uh uh when it comes to that is uh it should be mostly uh for most people i think it should be mostly bitcoin east and uh seoul and a few uh uh alternative projects uh out uh

later ones like things that are very liquid because the thing is with the most liquid things as you well know they can something bad can happen overnight and the thing drops 90 never recovers they can get hacked or somebody in the team may have access to the private keys there is an internal hack and he takes over the treasury and he dumps the coin and it just never recovers um uh when it comes to me it's uh i'm right now um 70 percent of my book is btc east and so quite evenly distributed uh the remainder is uh all over the place uh literally all over the place uh gamify uh trying to get exposure on the ai side uh ondo on the rwa side um a lot of uh l1s and l2s it's yeah the rest is all over the place it's it's quite a lot of uh

basically spread and pray um yeah and then some narrative trading which is kind of like conceptually different it's like you have cash in the area and then you you put a trade for x number of days or weeks try to get that 10 to 40 and out let's talk uh ethereum solana say monad maybe those are like four assets that you know generally are in a similar area i think that there is uh a very hardened group of ethereum holders uh there are ether holders um they They remind me a lot of Bitcoin maximalists, just they're holding Ether instead of Bitcoin. Some people would critique them and say, hey, you're going to miss other things because you're part of the Ether religion. Then we have Solana, which seems to have become the prettiest girl at the dance.

And then it crashed. I thought it was over, but it's come back and showed some resilience. And now there are these new projects that want to do these parallelizations and kind of go and say, hey, can we take these ideas and improve them? How do you evaluate, okay, we have four assets. They're all generally in a similar bucket. Should I buy one and try to pick the winner? Should I just buy all four and say, hey, it's so asymmetric that just get exposure all four and whoever goes up the most, great. How do you think about actually putting a position on in an area like that?

I think you have to have a lot of conviction to just pick one. I breathe crypto and macro as well, but I'm almost 24-7 on this. And I still don't have the conviction to go all in to one and just ignore the other ones. So it requires a very special mindset to just pick one and also very, very extensive knowledge. There are people who do it very successfully. Like, for example, there is a famous well-known influencer on Twitter that's gone all in on TAL, BitTensor, and hats off. It's remarkable. But that's difficult. On what you said about ETH, I think ETH is fantastic. I agree with you what you say about ETH Maxis.

They're a little bit more rational, ETH Maxis, than BTC Maxis, but they're still, they're Maxis, sorry, but I don't mean to, I never want to offend people, offend people but maximalism it it's being uh it's it implies marrow nine said me it implies inflexible flexibility and that's never good it's good to be to be able to change our minds um on on eath uh right now right now if he's doing very well today because eigen layer uh reopened their um uh it lifted their caps or reopened their their risk-taking program i forgot about the exact number but it was a very significant number so so if is now undergoing uh uh a move of like let's buy east to put into eigen layer for for restaking and then basically more or less i i gather in four months whoever restakes um so you get your if you stake on uh on say lido or one of those and then

you restake the the that token that the liquid token into eigen layer and in uh say end of h1 you get points from eigen layer that eventually they are transformed into tokens and the the expectation is that that's going to yield about 50 to 150 percent uh based on eigen layer evaluation so that's a short-term move i think uh then we have the etf narrative uh that may or may don't come true in may uh the the market is expecting right now a probability of 60 or maybe even 70 right now that it gets approved in may i think it's too rich i think for that to happen we need gensler out and that happens once trump wins but i may be wrong um solana offers fantastic innovation and product market fit today just went down today you know i don't

I don't know how many hours, four or five. So ETHMAXs are having a good day. I think Solana is fantastic. And it's a proven winner. With the other ones, let's put it this way. There's three chains that have a real community. And there's a community. It's not hot money going in and out.

Bitcoin, ETH, Solana. That's it. All the other ones are ghost chains for now. Say, you mentioned Say. I just used Say for the first time last week. It was a disaster. My transactions wouldn't go through. There was barely any volume, so it was not a matter of, hey, it's a launch.

Things are going crazy. My transaction doesn't go through. No, it just didn't go through. I think ESA has very low TVL. Aptos has very low TVL. There is very little money in these chains, and it's hot money. You mentioned Monad. And Monad is a new chain and they've been doing an extremely good job on the marketing side,

on basically capturing the mindshare of crypto setters, traders, and investors. So I think not only that Monad is going to be doing extremely well, but also has a chance to achieve what other chains like Say and Sui and Aptos have failed in doing, which is building a new community. That's very important. Aptos and Sui, unfortunately for them, they launched in the midst of like suicidal tendencies in crypto, like the depression, extreme depression, it's over. So they failed to, they just got unlucky.

They failed at building that. i don't know what do you think of that actually i'm curious about your thoughts there how do you see that i think that um maximalism uh is not true on a macro basis it can be true in a silo so for example uh i think that bitcoin is the winner for uh the global store of value right like you can become a money maximalist i always use the example if you grew up in the united states you're a dollar maximalist you get paid in dollars you save in dollars you buy in you pay your taxes, dollars, et cetera. But if you grew up in Mexico, you're a peso maximalist, right? Like, you know, it's kind of that, that is the thing. And so this economy for sure,

Bitcoin is that store of value, it wins. And so being a monetary maximalist makes a lot of sense. But confusing the rest of these assets as competition to Bitcoin, I think is wrong. They're just, you know, technology evaluation, right? Same that you would do with public companies. You would never be like, you know, I'm an iOS maximalist. I don't think Android's valuable i may prefer ios but i don't it's not i can't say android's not valuable and so same thing here um and i tend to think that uh portfolio construction is really important but if i was to boil down from like the the the essence of you know how i view investing today macro matters and global liquidity crypto is really just a trade on global liquidity then you look inside of crypto

and it's if you are investing in the crypto sector you probably are fishing in the right pond if you're not, or you have a very small allocation, you're probably just going to miss out performance because you're just in the wrong pond. And then within crypto, there's really a bifurcation. There's kind of the blue chips. Those blue chips will continue to do well. But as they get larger, their returns will go down. So people who thought that the Bitcoin ETF was going to get approved, and then we're going to hit all-time highs. I said it beforehand. I went on television and talked about it. I said, look, maybe, but also I would caution that that might not happen. um and then the long tail is early stage venture right a bunch of are going to be zeros some of

them will win the ones that win though will uh likely if you build a portfolio correctly be power law drivers that end up paying for the losers and so just gotta ask yourself you know what type of investor are you and and frankly i think a lot of people uh they don't have the time uh they don't have the interest or or the energy that you or i would have to go and spend you know all day long thinking about this stuff talking to a million people trying to figure out you know all the latest trends, they're like, look, okay, I'm going to take, you know, 5%, 2%, whatever the number is. I'm just gonna buy some Bitcoin. Maybe I'll buy, you know, one of the other ones and let me know how it goes. I'll look back in five years. And for them, guess what

they're doing in the rest of their portfolio? Passive indexing in the S&P, you know, Qs, like they're just, that's the way they invest is they're kind of passive indexers. And so I don't think that we should critique them or yell at them or any of that stuff. I think it's just, yeah different people do different strategies and and that's okay uh you just got to be comfortable with whatever strategy you pursue yep 100 and something you said i fully agree on on the fact that bitcoin is uh is uh an entity by itself it bitcoin has has some competition from me but not from the other ones east on the other hand has competition from everybody so that's that's an issue that's a that's a problem for if one other thing that um i often think about and i'll say

this with uh i don't know 80 90 confidence is you know people would critique bitcoin and be like oh it's the first one it's the aol right it can't survive and obviously if you go and you look like people have been trying to create a digital currency for a very long time it's you know 40 years after the first attempt frankly right bitcoin kind of breaks through so it's not the first one it's more similar to facebook being like the 22nd social social network but But I do think that Ethereum actually is the first attempt at kind of a smart contract blockchain. And so in a weird way, Bitcoin being the result of 40 years gives it strength.

Ethereum being the pioneer in a new way to do this actually may be a weakness. Doesn't mean that it'll fail. Doesn't mean that it won't be valuable in the future. Doesn't mean the price won't go up. But structurally, actually, Bitcoin is not the first thing and Ethereum is the first thing in their category. And so thinking through the pros and cons of that is pretty interesting. That's a very good point. I have to say I haven't thought about it this way.

And I think you're right. Yeah, very good way to put it. You know, like in some way, the critics say that Bitcoin is AOL. But, and again, I'm not saying that this is 100% true, but actually is Ethereum AOL and Solana already showing it's the second, you know, quote unquote, social network is the second search engine. And the Googles, the Facebooks, the, you know, the 20, 30th, 40th iterations of these things that end up being the real winners. Those are yet to come. Again, I don't know. I know just enough technology history to be dangerous, right?

So I'm not even an expert on that. But I do think that these are the components outside of just evaluating the community, outside of the technology, outside of the fundamentals of the assets and the markets themselves. Trying to look at history and how has it evolved is pretty important here as well, because I don't think that human nature has changed. And I don't think that these technology waves have necessarily changed either. Something else on Bitcoin I'd like to add is the Taproot upgrade. is it the off of i think it was a december 22 that opened up the way to to ordinals and this whole ordinals layer to bitcoin wave and uh it literally solved the main problem bitcoin had which is very low fees and what do we do once mining rewards evaporate now there is finally these guys with

their jpegs and eventually much more they they they actually it's not that i think is they they brought in uh a solution that that works and uh also i i perceive that that space is has very little penetration in mindshare it's like nobody outside of crypto knows about it and uh most people in crypto still they don't they're not interested in that space because they perceive they missed the beginning and it's too late so that what that means is there is a lot of room for for uh for a growth to show up on top of bitcoin still i think it's very early i think i completely agree and um in a weird way uh i think there's been a narrative from some over the years that like the altcoins were r d for bitcoin and that seems to be playing out in that

specific use case doesn't mean that you know kind of altcoins and etc won't be valuable or find their own use cases but uh definitely i think that bitcoin's layer 2 activity and taproot etc has learned a lot from what the altcoins have done has seen a lot of use cases and in some way is copying and trying to port back over some of that innovation um which is exactly what a great company or a great organization would do right is you you pioneer some yourself you solve some problems but then when you see somebody else doing something that's working you don't have too much pride to incorporate that as well and so i think that um that that also shows bitcoin's ability to adapt to you know market conditions and and incorporate other innovation uh as a positive

as well yeah that's the beauty of it i mean like it or hate it a a big number of these things are copy-paste uh you can't copy-paste the the underlying chain but all the applications are copy paste or not all that large now a lot of them yeah a lot of them for sure um alex i could talk to you forever where can we send people to find you uh on the internet or uh find out more about what you're doing on a day-to-day basis um the easiest way is um actually the only way it's just a twitter x x.com forward slash kruger macro and i yeah i'm oftentimes there i enjoy tweeting uh actively and engaging with people on direct messages. That's a way I have for learning about what's going on.

I love following your Twitter account because you're one of the only people who is weird enough to have the dual interest of macro and crypto. And so one day you may be talking about global liquidity or a foreign central bank. And then the next day you may be talking about a random blockchain that everyone's talking about. And I tend to think that that is where outsized returns are going to come from in the next, you know, 10 years or so. So I think that you're on to it and people should definitely go give you a follow if they haven't already. Thank you. I appreciate it very much.

Of course. All right. Well, I appreciate your time very much and we will do this again in the future. Awesome. Thank you.