The Pomp Podcast - #1370 Will Clemente on Bitcoin Bull Market

Episode Date: June 10, 2024

Will Clemente is the Co-Founder of Reflexivity Research. In this conversation, we talk about Bitcoin, Ethereum, Solana, meme coins, portfolio management, ETFs, regulation, culturally relevant ideas, what you should be paying attention to, and where opportunities exist in the next 18 months.  ======================= CrossFi is the Apple Pay for Crypto. For the first time in history, anyone with a web 3 wallet like Metamask can spend crypto through a physical or virtual visa cards anywhere in the world where Visa is accepted. Be one of the first to get your hands on a CrossFi card and a prize pool of $3 Million Dollars by joining and participating in their testnet today: ⁠https://xfi.foundation/users⁠ ======================= Introducing Espresso - the world’s most interactive portable display. They have a portable screen that is incredibly light, comes with a nice stand, and the user interface is very easy. Anyone who listens to this podcast can go to ⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠us.espres.so/pomp⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠. They have a brand new offer waiting for you.  ======================= 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. All right, guys, bang, bang. Today's conversation is with Will Clemente. The young wizard is back, co-founder of Reflexivity Research. We talk about Bitcoin, Ether, Solana,

meme coins, how he actually allocates his capital in his portfolio, what you should be paying attention to, whether it's ETFs, regulation, or culturally relevant ideas. All of this is Will trying to unpack what's happening in the market, how you should be thinking about investing, and where opportunity lies in the coming 18 to 24 months. Will doesn't disappoint. He's always in top form and this was no different. I hope you enjoy this conversation with Will Clemente. 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. Angeles, London, Dubai, China, Japan, and over 20 other countries. Be one of the first to get your hands on a CrossFly card and a prize pool of up to $3 million by joining and participating in their testnet today. You can go to xfi.foundation slash users. Again, that's xfi.foundation slash users. Go check it out today. Today's episode is brought to you by Espresso, the maker of the world's thinnest portable display. Now, listen up. If you're like me, you feel like you are at a command center

when you sit down at your desk. I got a gazillion tabs open and different windows for different activities. There's my web browser, my text messages, I've Slack open, and I got a notes app. I normally work on a desktop and it can be very, very productive, but everything falls apart the second I leave my desk.

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If you listen to this podcast, you know, that's not an easy feat. So the Espresso team and I, we became friends. I got to know them because I really liked the product. And those screens, they now want to offer them to any fan of the podcast. So we struck a little deal. Here's how it works. Anyone who listens to this podcast can go to us.espres.so. Or, that's too confusing, just go click the link in the description.

If you go to Espresso's website, they've got a brand new offer there sitting for you. You get a little discount, and you'll get a beautiful screen. Trust me, I use mine every day. You'll love the Espresso screen, and I think it'll make you more productive. Go check them out today by clicking on the link in the description. I thought a great place to start the conversation would be Bitcoin, the king of the crypto market. It's just going sideways. Three of the last four times that it had broken through an all-time high, it doubled very quickly.

That hasn't happened here. And on that fourth attempt, the one time it didn't double very quickly, it kind of went sideways for a while and then took off. Is that what you're expecting to happen with Bitcoin through the summer or the end of the year? First of all, it's great to be back in in person once again, back in the studio. Yeah. I mean, that's kind of my base case is Bitcoin is just consolidating below all time highs.

It's kind of difficult to say exactly how long that'll take place. Some people are saying that we're going to have this kind of, you know, sideways summer. Some people are kind of coining great alliteration. You know, I think that the price action very much resembles late 2020. So we go back to like the middle of last year, I posted this fractal, it was almost kind of a joke when Bitcoin was trading like 31K. And I basically just took the price action from the end of 2022 and then overlaid it

on the price action at the time. And it's followed it almost perfectly of just partially it's just Bitcoin's gone up only as it did at the end of 2020, it's all time highs. But then if you remember at the end of 2020, I mean, we consolidated below 20K for some period of time. Obviously this is slightly different because we broke the all time highs, but very similar in terms of, you know, you just have a lot of sellers at the prior highs that maybe had been holding Bitcoin for some time are looking to offload once you get back to their kind

of cost basis and so they can kind of get out at breakeven. And then also just in general, market very rarely, you know, goes up to all time highs and then pierces straight through without rejecting at least one or two times off of that. And the other piece is just, you know, following the derivatives data. way this stuff goes is you know you get people to you know get leverage long right at that kind of you know all-time high breakout or whatever like key level that bitcoin is consolidating up against um you flush those people out and then kind of go sideways until you almost get this apathy and

and the base of of derivatives traders until they're no longer you know aggressively super you know long on on you know 20x leverage or whatever it is uh and then bitcoin seems to move So one thing I've been watching is the derivative stuff. We've seen that cool off a bit over the last month or two. Things like watching the futures basis, which looks at the spread between spot and the three-month future. It's kind of a proxy for sentiment and how long people want to be in the market, as well as funding rates, which just looks at the difference between the PERP price and the spot price that the PERPs are pegged to through that funding rate. Um, the only problem is now that Athena's around and this is something Quinn Thompson

has talked about a lot, uh, Athena has kind of thrown off, um, those measures a little bit because it's putting downwards pressure on both the basis and, and the funding rate specifically for, for ETH. Um, so I think you've got to take those readings a bit, you know, with a bit of a grain of salt. Um, but I think the relative changes still are pretty valuable. And what we've seen since the initial run up in February is that the three month futures basis has come down and it's kind of just grinding down near like 5% or so. Funding rates have kind

of cooled off. We saw a lot of open interest that came in on this recent move as Bitcoin got rejected off of 72K a couple of days ago. But I don't have any super strong short-term view on the market outside of the derivatives market is starting to cool off and isn't as frothy as it was earlier this year. Meanwhile, we're continuing to see inflows into the market, which is represented by on-chain data of stablecoin aggregate supplies, which is one thing that I look at pretty closely because that gives you a proxy of capital inflows, but also the amount of liquidity on-chain that's being utilized in DeFi or whatever it is. And then the other piece is the ETF inflows that we started to see. So one thing I had been posting on Twitter for a little bit

is the 14-day change in the holdings of the ETFs. So you had this kind of first wave up, obviously, like right after the ETFs launched, kind of cooled off. And then now it seems like over the last two or three weeks, we've started to see this kind of second move up, maybe beginning in the ETF flows. I think some of that, which is reflected by the types of participants that were revealed in some of these 13F filings, are probably just long spot and then shorting the future to put on that basis trade. So they're not like directionally long necessarily. But overall, we are starting to see those those etf flows how does that affect the price right so if i'm long spot but i'm shorting futures is that net positive to price or is it basically just negating it like

i understand the exposure but how do you expect the actual impact on price yeah it's it's net neutral because the the spot gets pushed up but the future gets pushed down so it's it's net neutral on the price and so for those that uh maybe don't spend a lot of time on this on a on a day-to-day basis because it is net neutral, even though you're seeing ETF inflows and some are pretty big number, I mean, hundreds of millions of dollars in a given week, but you're not seeing price necessarily run

is because that is only one part of the trade these people are putting on. And so it's not really a net increase in the market cap. Yeah, yeah, I mean, that's true, but also I would just say like, people forget Bitcoin's a big market. It's a really liquid market. Like these are big numbers that are coming

through the ETFs. We saw almost a billion dollar day last week, which is the second largest inflow day since inception, but there's still a lot of volume that takes place outside of the ETF. So I think the ETFs are something that's a good kind of narrative or like showing point for the market to grasp onto, but I don't think it's an end all be all.

We can have a down day if there's net inflows, et cetera. I also think the ETF inflows in themselves aren't really a good proxy for where the market is going to go on a day-to-day basis, if that makes sense. The general trend of the flows is important, but if you have one day of some certain reading, I don't think that gives you any forward-looking insight into what's going to take place because the ETFs are partially just a reflection of where the market trades. We've seen people freak out because you have several days of net outflows in the market, but the market went down people were selling you know the market went down um and then also you know people getting

overly excited when we see inflows but the market has gone up well it's yeah well the market went up people people were buying that's you know you're just seeing that people had bought for the day as the price went up so i don't really follow them on like a day-to-day basis but i do think you know things like looking at you know these kind of broader trends or maybe you know looking at like a seven-day moving average or something of the etf flows is interesting just to see like are we starting to see you know that kind of second wave up that we've been waiting to see since that first one uh in those etf flows got it um when we look at the next couple of assets ether solana maybe the next three or four um historically you would expect bitcoin to outperform stocks and then you

would expect ether to outperform bitcoin maybe salon to outperform ether and it's kind of just like a market cap game bitcoin's been very strong this year compared to some of these other assets um is that a good thing a bad thing should we expect it to continue like how do you just kind of think of you know maybe bitcoin ether and solana actually bitcoin and solana seem to be outperforming ether with an etf inbound maybe that'll change but like it's not following kind of the real simple small brain just you know bigger market cap lower return yeah that's been one very interesting thing this time around um you know i got involved in the space at the beginning of 2020 so i was around for last cycle but not 2017. um but i remember in 2020 it was very much

okay you know you got on the risk spectrum those things are going to have higher beta to bitcoin and you just get long all the vaporware and all that stuff goes up we have not seen that this time um you know a lot of the alt btc or alt soul pairs have just been bleeding out for several months now and it hasn't really been as simple as just buy whatever you know vaporware all coin and you'll outperform btc because it's you know less liquidity and it's further off on the risk spectrum which i think is a good thing for the market overall because people are thinking about you know what they're allocating to keeps people honest yeah yeah for sure but we have seen dramatic outperformance and the ai coins but then more uh more so that the meme coins and i think

that's kind of this reflection of the market sentiment towards a lot of the tokens that frankly exist in crypto and you know do they have value accrual and i think the even bigger one is kind of the supply distribution and and um you know how those tokens get distributed over time so you know in 2020 2021 a lot of this was kind of obfuscated away and you know we didn't have have, now there's data platforms you can go on and just look at all the token unlocks and see when exactly the cliff is going to unlock certain amount of tokens, et cetera. We didn't have that really. It was very hard to find that data last cycle.

So I don't think people really fully understood the game that was being played. But now I think that's very well understood by the market and that you raise a bunch of money upfront. And again, I'm not completely speaking negatively against this because you need capital formation and all these types of things. there's a lot of questions being raised about what's the optimal way to do it um you know currently it's you raise a bunch of money from vcs maybe go through a couple rounds of fundraising you launch the token you float a very small percent of it like you know 10 or 15 percent

of the token circulating supply and then the idea is that over time you know you unlock more and more tokens you know the vcs are locked up for two or three years and then ideally the tokens run up by then because the float was low and the price ran up and then finds equilibrium before the vcs or whoever you know was an early backer is able to exit um we haven't we've seen a lot of these you know low float high fdv tokens just bleed out since the launch and i i just think that's the market kind of understanding what's what's taking place well meanwhile you know you have these meme coins where you know they're a lot of them are fair launches there's no pre-sale so somebody just launches them um the 100 of the supply is is out there you know circulating um and you know

it's it's much much fair i won't say it's you know the most optimal way to to do it i don't know if there is an optimal way to to distribute um you know tokens that's been a widely you know um debated topic for for a very long time but the meme coin launches are definitely much fairer than you know these kind of low float high fdv games that are being played and then the other thing is just you know if i'm a if i'm a you know retail market participant like take myself you know i don't trade with any exorbitant amount of money and so i'm able to get into a lot of these memes and i'd rather you know play around in that sandbox and trade these things where you know some of these things can run in a matter of days from you know a couple million market cap to you

know we've seen north of you know mid nine figures um in in some cases and so you know essentially retail has the ability to basically you know capture a liquid unicorn which i don't know any other market that that you could do that so um you know i speak to a lot of other guys my age as well that's that seems to kind of be that the general sentiment is you know you've got bitcoin as this hard money asset everybody understands that very well um you know that we have the etf i think the case for for allocating to bitcoin is you know more clear than ever and larry thinks gone on tv and shoulder bags and uh kind of you know drilled down the thesis for bitcoin i don't think that's debated by anyone um but then you've kind of got this question of okay well you know

if i want to go further out on the risk spectrum um you know what should i allocate to there's all these you know very highly obfuscated you know a lot of technical jargon uh questions about the value accrual for a lot of these altcoins that are you know mid nine figure uh you know billion two billion dollar market cap tokens and you know the reality is the average retail participant has a very low likelihood of you know 10 or 15 xing on something like that but they have a much higher probability of of you know doing so with with memes um so i think a lot of people that are coming into the space looking to speculate for the first time are participating there and then also i guess the last thing i would add is just um the pool of market participants that are playing that

game is a lot less sophisticated than the pool of market participants that are trading bitcoin like to you know to have edge in in trading bitcoin especially at this point i think maybe this was a different story even before 2020 um but i think now you know you just think about you're gonna go play poker at a table right you're gonna go play with you know these high stakes guys that are you know they've been playing for 25 years or you're gonna go sit at you know uh um you know the table with with people on your same skill level i think that's how a lot of people are thinking about participating in these meme coin markets as well when we look at maybe the large caps first i am very long bitcoin um have been for a while don't plan to sell um look at it as a you know

a grandchild type holding i'm gonna hold it and give it to my grandchildren at some point um i had some ethereum that's where i started uh my kind of crypto journey mining ethereum back in 2016 um but i sold that i think end of last year beginning this year whenever it was um and bought solana instead um it was very much a decision like i think that salon is going to outperform ethereum moving forward i want to you know make this change in my personal portfolio um so far that has been true but uh i don't hear any talk of a solana etf in the united states i do see the ether one coming um how do you think about those two as like the two big competitors or at least by market cap uh the two largest competitors for like the smart contract landscape and like

is it uh they both should go up do you think one will go up more than the other yeah i i definitely think eth has more lindy than soul just because it's been around longer um i think eth probably has a higher likelihood of getting adopted by a lot of these institutions and we saw blackrock deposit a couple hundred million bucks on eth as opposed to solana but at the same time i think you know a lot of retail market participants again especially a lot of hate to keep bringing it up but a lot of these meme coin games are taking place on solana because it's faster lower fees etc um so i think you've got some of that kind of dichotomy going on from a you know allocation standpoint um obviously if the ether spot etf gets approved then i think one

important thing to keep in mind is you'll probably have a lot of uh portfolio managers or traditional guys that are gonna look at this say i don't know a ton about crypto i'm gonna go 70 30 you know these two assets because these are the two ones that got approved by regulators so i think eth will get some flows just from that you know just in terms of like general portfolio construction and how people think about it and what they're able to access in a compliant way, et cetera. One thing I'm keeping in mind in the shorter term is once the ETF theoretically does launch, which it seems like it's a done deal after they approved the general ability to launch ETFs, they just have to approve the individual filings now, is the people that have been arbitraging

the ETH spread. So ETH traded as much as I believe a 60% discount at the bottom of the bear market. it was still quite discounted. Even you go back like a month and a half and that was just people underestimating the odds of an ETH ETF getting approved. The question is, once the conversion is allowed, what's going to be the net buying or net selling? I would expect that there's probably a couple of billion dollars of sell pressure that maybe negates out any initial inflows on ETH in the same way that we saw it play out for Bitcoin when GBTC got got uh pulled out of grayscale at the beginning yeah i'm very fascinated by what um what is going to happen between those two because uh it feels like solana versus ethereum is what bitcoin versus

uh ethereum used to be right it was very tribal it was very much like uh i'm better than you you're better than me i don't agree i agree whatever um i think now it's very clear to people like bitcoin is trying to be some one thing and the theorem's trying to be this other thing and maybe there's some like online tribalism just within in the community but it's not really things where on a substance basis they're competing with each other ethereum salon feels a lot closer like it feels much more like you know um two social networks going at each other rather than uh kind of just two random technology companies and so um it does feel like that battle is more a winner take all uh or you know definitely winner take most um but then you look

at the market caps and like you know ethereum's market cap is still growing so is solana's and so maybe actually the like theoretical doesn't apply and it's like no we're all drastically underestimating how big of a market opportunity this is and there will be you know two three four or five different winners uh and they'll all get you know significant market share and uh trying to pick between the two is actually losing game i think when it comes to money bitcoin is you know clearly money and nothing's going to compete with bitcoin being money and historically we see that money typically is a winner takes all game so i don't think that we'll see anything that takes on bitcoin for the kind of store value monetary premium properties that it's established itself

with i agree with you wholeheartedly on the eat stuff i think where they messed up was kind of trying to pivot into this whole ultrasound money thing and then competing with bitcoin as money I don't frankly think that Ether is money. And this whole idea that all of these things need to try to be money is kind of silly. It'd be like saying that all the companies in the tech bubble were competing with the US dollar. I just don't really like that framework. I think ETH should be trying to directly compete with Solana for kind of the smart contract landscape for sure. So the question is, how do you incentivize people to come on as opposed to Solana. And I think just the more competition, frankly, the better for the end user, right,

as it is with almost anything in capitalism. Because, you know, you're going to have to have all these tough questions that have been asked over the last year and will continue to be asked about, you know, what is an optimal smart contract platform look like? You know, what are the trade-offs in design that you're willing to be, you know, willing to make? Maybe, you know, what subset of users is willing to look at, you know, using this specific smart contract that has these trade-offs versus a different market participant using a different one. So I think it's an interesting time to be involved. When you think about investing in this space,

there's a lot of people who are going to listen and watch this, and they're going to say to themselves, hey, I'm trying to think about how to allocate capital, right? There's going to be people who are overly conservative, and they're going to say, look, I'm putting up 1%, 3%, maybe 5% max into this industry. There's other people who are going to say, actually, this is the equivalent of the stock market to me, right? is just like the older generation went and they put 60 70 80 of their wealth into the stock market

and the variety of different strategies i'm going to do that with this market um with the conservative people if you only put one to five percent it seems like you're more likely to kind of buy one asset maybe buy bitcoin right maybe you stretch and you say i'm gonna buy bitcoin and ethereum or you buy some sort of index you know market weighted index or something i don't think there's a lot to kind of debate or talk about on that end but people who are treating the crypto universe as if it was the stock market that the older generation did so they're going to go put a significant amount of money to work in that industry um how do you think about allocating capital is there a certain framework you use are you more kind of a barbell

just talk about like the investing philosophy uh as you kind of look at the total landscape across you know liquid tokens that are large cap you've got the meme coin stuff you've got public equities that are crypto related like there's a lot of opportunity here yeah i i think there's a lot to unpack there and it just depends on like your personal situation you know your risk tolerance you know what assets you do currently own um i guess i could talk about my personal portfolio construction it's bitcoin and cold storage that i've never touched and never planned to touch and you know never plan to sell because hopefully one day you don't have to sell that famous uh bitcoin meme with neo um then i have i have coinbase as kind of an index

uh on the whole crypto space the public stock of coin public stock um i should disclose obviously you know i have a position in that um i think that's going to be viewed as kind of a proxy robin hood also increasingly so i think they're kind of the biggest threat to coinbase's business at the moment as they you know just uh came out last week that they're going to acquire a bit stand for a couple hundred million bucks um they've seen a lot of you know uh rise in retail volumes over the last couple weeks um robin hood originally had delisted a lot of different assets because regulators had kind of hinted at them about um you know potentially violating some security stuff but if that regulatory you know kind of uh clarity comes about then i think you'll

start to see them push back into crypto again um but i don't own any robin hood i think coinbase for now is viewed as that index on the space that you can at least get access to publicly. I don't own any Sol or ETH, but those are obviously the two leading smart contract platforms serve as an index for all the activity taking place on these chains. So for example, if you're bullish on activity taking place on Solana and then driving demand for the Solana token to participate in these on-chain games, then maybe you just allocate to Sol instead of trying to rotate in the meme coin casino, if you will. But then I'll add on the other end of that barbell, so I would say Bitcoin and Coinbase on one side. And then on the other side, for me,

it's just a lot of these memes that I've been more actively trading. I know you've gotten a spew of texts from me over the last couple of months with these random coins. Well, it's interesting with the meme coins, right? Because so much of the analysis is almost like, does the coin make you laugh? If you think of a meme, just forget coins for a second. If you think a meme on the internet if the meme says the truth that no one wants to say what everyone believes it usually takes off right uh if a meme is funny it takes off if it is culturally relevant right and like high quality it takes off so like if you think of these things that make like a just i'm talking about a traditional meme you know on twitter or something yeah like there's very

you know specific boxes that you can check and you're like why did this meme take off and you can put it in one of these sometimes it checks more than one box right when you and i have talked about some of the meme coins uh sometimes it is oh this is culturally irrelevant right sometimes it's like that made me laugh sometimes it is uh understanding some sort of trend or you know something that fits a moment right yeah and so when you look at it it does feel like for the first time ever uh these like cultural moments or word of mouth you know even before kind of the digital age now there's just like a ticker symbol to them and i i go back to um you know when reddit went public there's a reddit coin interesting like you could buy

reddit the stock or you could buy reddit the coin the coin gives you absolutely zero economic interest in the company there's no rights there's no you know equity there's no any of that stuff but the coin went up more than the stock that's interesting right and then if you go and you look at in some of the earnings reports, GameStop, when the Roaring Kitties stuff, when he came back, all of a sudden the stock went up, but actually the GME meme coin went up more. And I'm not here to say that buying the GME token is the same as buying the stock. Obviously it's not, right? But I do think that people underestimate how much risk-taking happens on Wall Street. And it almost feels like we're getting a mirrored version. So you have the traditional stocks or

assets. And now you're getting these like, really are just brand relationship. And there's a whole generation of people who are saying like, I see something that's happening. All of the, you know, kind of traditional folks are going to go buy this stock, but like, I'm just going to go buy the thing in my universe that plays off of something else. And so on the upside, it works. Now, obviously on the downside, there's nothing, there's no assets, there's no cashflow, there's no, you know, rights. And so it's, it's not as clean of a story, but it's fascinating to me that now we've seen multiple occasions where these meme coins are going up more than maybe their traditional counterparts are. Yeah. I'll preface with saying, participating in meme coins is

totally gambling and it's not rooted in any fundamentals. That being said, I think there's a lot of very real drivers of why they've taken off. One is markets rallying. People want to take on more risk. There's a wealth effect of asset prices going up. People have more money to play around with. Maybe a little deeper is I think you've got wealth inequality, which is a result of monetary debasement. So as the US is continually debasing the currency, you bail out continuously not only these large corporations, but also the people that own assets. So the people that have already owned assets continually benefit for owning those assets, while the people that don't hold the assets, get further and further behind. I also think in our, in my generation, there's

somewhat of what I like to call a dopamine epidemic. So, you know, at your phone, you've got access to more dopamine than anyone in, you know, any previous generation. You can go on social media and see as many videos as you want. You know, all types of explicit content that's there, you know, for access online. The ability, you can either, you know, order things like nicotine or weed or other various substances literally to your door now. I can go on my phone and order horrible food straight to my door from my phone. All these things, I think just the ease of access to dopamine is greater for my generation than ever. And that leads people to want to speculate, want to take more risk, et cetera. And then I just think to go back to the wealth

inequality piece, people feel priced out of things like real estate. I don't really see a path to create generational wealth from maybe if I've already created wealth, I can preserve it by holding real estate. But I don't see really an option to create wealth of the same magnitude that the baby boomers did when they began buying houses back in the day. And I guess I could also toss in, I think this falls on the dopamine epidemic stuff. If you look at just online gambling numbers, especially after years back, they shifted regulation to the state level from the federal level. Gambling revenue has just gone up and to the right. And I just think a lot of is going to come into these these meme coins because it's a you feel like you have more

control over it you feel like you can kind of define your your risk a bit but also to be a bit more cynical you know once all these things are going up only um you know then you have almost this perception that it's more plus ev to participate you know whether it actually is or not i don't really think it's the thing that matters it's what's the perception of you know whether this is like a higher probability for for me to you know hit on whatever gamble that i'm that i'm essentially putting on through speculating on these memes and i think our generation um has a higher susceptibility to understanding these trends i would actually say that younger guys have a much bigger edge in uh in in finding the next big meme coin over somebody

that's older because we grew up on you know instagram snapchat vine uh that's a throwback um you know all these different apps um you know twitter twitter as well obviously where you know we were constantly exposed to these memes there's all you know the the the spread of you know sayings and culture and things like that which is much greater and so um i think over time you know over the last 10 years my generation very much kind of understood this this uh um kind of developed this keen eye for for finding you know these phrases or things that are funny are going to catch on etc so um again when i speak to people my age it's you know they talk about oh i you know i'd love to to own bitcoin um but you know i feel like i'm not gonna you know create

generational wealth same with housing or index funds i'm gonna go speculate in this crypto casino i don't know if that's a net good or bad thing for society but that's just me being objective and you know observing what's going on i don't think it's different i think people have been trying to get rich quick forever yeah right um in a weird way um again usually trying to get rich quick doesn't work. You know, the great things take time to build. One of my favorite sayings is excellence doesn't have a watch. And so it's this idea that like, in order to build a great company, it's going to take 10, 20, 30 years. I mean, think of SpaceX. SpaceX was started, I think, in 2001, right? We're in 2024, 23 years later. And now it's like, oh shit, this works, right?

Took 23 years to get there. It took them almost a decade to get the first rocket to not explode on the way up. And so when you think through that, you're like, all right, well, that's a great company. Um, took a long time. People who are like, uh, Hey, I'm going to go put some money in this, you know, coin or this stock or this, you know, whatever. And I'm going to get rich in three weeks. It's really hard. Right. And probably unlikely. And so I do think that there is a weird dynamic of, um, hopelessness leads to, to that, but also, um, lack of education. Right. And if you go back, um, I was having lunch with somebody, uh, over the weekend and we were talking about, uh, Bill Miller and he bought Amazon crash from $80 down to six. He started buying on the way

down and kept buying, get buying, get buying. He ended up being the largest individual outside shareholder other than jeff bezos and he also um ended up being the owned about 15 of the company across his fund personal everything so you look at that and you're like man that sounds a lot like risk-taking that's that's scary but it worked so we celebrate and say this is amazing um for every one of those how many people were buying a stock going down in 2001 you know 2000 whatever and went to zero yeah right they were essentially meme coins the you know yeah of course it was was .com, right? Now we have coin, whatever coin, they had whatever .com. And so I do think that in a weird way, this is a story as old as time. And every generation likes to look at the younger

generation and be like, oh, you fools, right? But they're like, well, you guys are doing the same thing. Yeah. The other interesting thing, I guess I would say to differentiate the meme coins from maybe some of these .com bubble vaporware companies is that they're almost this kind embodiment of this deep desire to be a tribal person and have connection with people um one very like troubling statistic from my generation is just if you look at lonely loneliness particularly male loneliness it's it's skyrocketing skyrocketing um so i think to some extent these meme coin communities people also look at them as a way to build some camaraderie you know you're posting memes together in the discord and buying the dip together like all these types of things

um it's definitely sad but i think that that's another piece of it too especially if you have some coin that represents something that's significant to the person so vitalik actually wrote a blog post about this but one specific example i'll give is this trump coin because it's very large now it's like 700 million dollar market cap um trump has been very interesting because it's it's served as kind of this vehicle for people not only uh to speculate on you know their views on the election, but also just the general attention around Trump and likeness that they have towards Trump. So for example, when we got the verdict in the case last week or the week before, we saw the Trump coin dip down like 40%, but then ripped right back up and ripped to new

all-time highs within a matter of a day or two. And that was almost like this representation of people's you know views on trump so in some ways i think um you know you can now like spam social media with bots and it's a very low cost low friction way to kind of almost uh you know have like online warfare if you will but now i think you'll start to see people vote with their dollars and express these views through some of these tokens so you know um someone tries to ban something or whatever may be in the token associated with that thing starts to move another one was uh this was a while ago so i can mention it now um like open ai there was some issues around open ai and elon was saying it was supposed to be open source and it's almost

essentially now closed source and so a token called closed ai started pumping right it's a very micro micro uh example of that but i think you'll start to see these um you know tokens almost move as a representation of how people feel about things in society yeah it's it's uh it's fascinating i don't think it's going to stop i think it's only going to accelerate and there's going to be more of them doesn't mean that they're good doesn't mean that you know people should put money in them but but it's going to happen it's worth paying attention to um where can we send people to find you or find out more about reflexivity research yeah sure you can find the research firm at reflexivityresearch.com and then my twitter is wclementiii awesome

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