The Wolf Of All Streets - Altman, AI & Crypto | Milei’s Win | Fidelity Ether ETF | Crypto Town Hall

Episode Date: November 20, 2023

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Testing, testing, please tell me there's not too much background noise. That sounds good. Are the three of us back today? Is my background noise okay? Yeah, well Scott is still on the yacht, half drunk. I'm back. And you're back as well from spending time with your kids. I'm back.

I detached so much. I detached so much that I got... I went on vacation on Wednesday with my phone fully charged and I got back yesterday without ever plugging my phone in still alive pretty impressive feat for me

tell us we don't even know if we did shows last week I know we didn't on Wednesday or Thursday that was the first time I had no idea what was going on we missed, I felt so bad. We missed because my flight to Costa Rica is, I couldn't say no to them because I promised them many months ago and I tried to say no, it didn't work.

It was also worth it. It was an incredible event, much bigger than I expected. But it was one of the worst experiences of my life. It was a 25-hour flight, one-way, 25-hour flight. And that's the shortest flight from Dubai to Costa Rica, nothing direct. It of the worst and one flight didn't have internet none of us knew so for 12 hours I didn't have internet Sam Altman decides to be fired while I'm on a plane so I have to get my team it was one of the most horrendous experiences so I feel bad as hell for not being able to do a show I did one so I was so surprised I was so surprised Mario that

she didn't spin up her spaces I've never seen it like I thought as soon as I heard about it we did we did but we were late no we did we were late though we were late to the game because yeah

we missed it because again I was on a flight and the team couldn't spot I didn't know how major it is so it was a slip up but we did a space

but we were just late we had Sam Altman's sister come on we had the Ted founder come on we had some executive from OpenAI come on I think one or two I wasn't had some executive from uh open ai come on i think one or two i wasn't hosting it like it was run on my account but the team was moderating it

um but yeah we did a space just a bit late i know i know it's disappointing so i mean i know we're talking today about uh miller's win and the fidelity eyes the eth etf but i'm going to make a suggestion that after what's happened this weekend, we should actually maybe talk a little bit more about AI and crypto. Because I think that there were two events this weekend which were turning points for crypto. The first one, obviously, was Miller's win. That's a turning point, but it's still Argentina. It's not China, US, Russia, India.

It's Argentina. argentina it's not china us russia india it's argentina and yes they've got a a very liberal um pro bitcoin president who really understands bitcoin but i think the bigger turning point was what happened at open ai let me let me preface it and then tell me if you think that it's worth actually discussing so i think what we realized with what happened with OpenAI, and now you've got Sam Altman and his whole team actually joining Microsoft. And remember that one of the things that Microsoft wanted to do was they wanted to buy OpenAI, and they couldn't buy it. buying it um it basically took the the charter and worked around the charter to create a scenario where they almost bought it but but legally on paper they didn't actually buy it now what we realized this week is what we realized now is that microsoft now has sam altman and the entire open ai team at their disposal. And as Balaji tweeted, basically, actually,

I want to quickly read you the tweet so that I don't misquote the tweet, because I think the tweet's quite profound. He says that, Sam and Greg and colleagues joining Microsoft, that'll be the shadow company. They'll now recruit all the talent from OpenAI. They launch a Bing AI

or spin it out as a separate company. Then Microsoft may cut ties and compute with OpenAI. What you'll also remember is you'll remember that Elon Musk had a huge concern when this Microsoft deal happened. He said that the scariest thing that can actually happen is that AI will fall into the hands of the corporations who are effectively controlled by the governments, like the Googles and the Microsoft.

Elon warned about this, and he seemed quite petrified about it when this deal actually happened. Now we're seeing that these guys have actually much more control around AI. Now, here's my concern, and this is probably something that we can discuss if you guys are happy. So, my concern is that AI, to me, is probably as valuable, if not more valuable than money. I think that AI is a resource, it's a commodity, and we cannot let the same mistakes that happened in our money system happen to our AI system. And so I think that up until this weekend, I really struggled to find a use case for AI and crypto. I kind of kept saying, look, crypto is slow. It's expensive. AI is fast and it needs to be very cheap and the computing power needs to be cheap.

However, what we've now realized is that we cannot risk the same thing that happened to money to happen to AI. And there is a space for AI decentralization. And I think that that's maybe, I think that that was a big, big, big turning point for a new use case for crypto, which, to be honest, I was part of the naysaying crew that said, you know, AI is cool, but it's not really for crypto just yet. And now I've completely changed. I said, hold on. What we saw now makes it so important that we actually maybe look at having AI in the

early days actually in the decentralized world. So I'm going to put it out there in case uh in case we want to have that discussion otherwise happy to talk about uh uh the etf it's a good discussion ryan ryan the good discussion now to it that world coins price action kind of highlights exactly the point you're making i think you went up by like nine ten percent in 24 hours after the saga with altman so i think your points are pretty valid. And I think it highlights the importance. At such an early stage, it highlights the importance for decentralizing AI. So I think I've even changed the title to add it in first as one of the first points we should cover.

I think it's more important than Fidelity and the Ethereum ETF, which we talked about last week. And Millet's win is pretty cool, but I think nothing too major. It is Argentina. But I think it's a very valid point for the panel to get their thoughts. Yeah, so I'm with you on that one. But for the panel, you just jump in, guys, or Scott, just jump in. Give us your thoughts on whether this is a good thing for decentralizing various aspects of AI, especially data ownership, or whether we're getting ahead of ourselves.

I think the panel was going to happen. Yeah, I mean, this is unbelievable, right? So first of all, we're watching something happen in real time. And watching Balji enjoy it is probably the best way to get the angle of, you know, sort of what's happening. But watching it in real time is just unbelievable. You know, the way that Microsoft has pulled this very agile snipe off a poach that like you had all these deceleration

guys saying you know we we're in control let's let's do what we need to do and everything's just sort of happening around them and it's really neat to watch and of course I also instantly sort of sort of thought you know how is this being decentralized and I think there are some tokens out there but I'm really interested to learn more. I think that's really cool. Like how to decentralize the data that's out there and the control of the models and to sell models and data, you know, peer-to-peer,

it's all just really important. Jumping in, by the way, guys, try to get Vini to come on as well, Ryan. I just messaged him. He'd be great for this one. Look, so I think one of the things, and I'm going to be full, full, full disclosure. We did discuss this token a long time ago,

not a long time ago, a couple of weeks ago. And I remember Scott saying, I have no idea what this token is. It's a token called BitTensor or TAO. And if you go and look at what BitTensor or TAO is, it's modeled very much around the Bitcoin proof of work algorithm with 21 million coins, networks. And when you actually use them, when you see how well they work, you're like, so hold on, you can actually do this in a decentralized fashion, which is almost incredible. The shortfalls in decentralizing it, usually generally is efficiency, speed, how effective it is how would

you compare them to the centralized alternatives look i think that i think that in the short term until we optimize and until we learn um we'll be stuck with a bitcoin or an ethereum but i think as we progress we're going to land up with a solana where, you know, you can pretty much say Solana is as fast as Visa or MasterCard or any other player. So I think we've got to start somewhere. But again, I think this weekend was the turning point. And I'm just not sure how many people actually grasped how important this turning point actually is. You know, I woke up and I thought to myself, hold on a second. This is much more, AI is much more important than money.

And we are witnessing AI land up in the hands of Google and Microsoft. Do you want AI? And I understood what Elon Musk was panicking about. I understood what he was panicking about having seen this. And he was 100% right. I mean, they also stole it from him right he invested effectively in a not-for-profit that just magically became a massive for-profit business so i would think that he has a pretty good bone to pick there as well yeah he was very he was he was very concerned about it at the time actually i'm gonna play you something if you just give me one second, I've got a very good clip of Elon, which was taken when this thing actually happened. Look, by the way, I did do a full show on this.

I'm not going to repeat the whole thing. I did a whole show on it today. If you guys want to listen to it, just go to my YouTube. You guys can do it. That's my mandatory show. But hold on. I'm trying to change my sound setting for my computer so that you guys can hear it.

I want you just to hear what Elon said said while you're doing that and while you're doing that right just play it when it starts but i'm just looking at different coins ai crypto ai coins on bit 10 so tau is up 4.2 percent after a 77 percent rally over the last week you got ocean fetches ai's fet and singularity net i know these guys up 16 and 24 hours um so it's we've seen these cycles so like the narrative cycle so many times i give them zero price action i don't determine there's nothing about yeah travis about while ran if you don't have that up travis is about to comment as well yeah go for it i'll find it give us i was gonna say i still can't really tell what exactly happened over the weekend.

I mean, I've been following the news pretty closely, but I woke up this morning and saw a couple updates from overnight. Saw the letter, 500 and something employees out of 700 threatening to leave, to go to Microsoft, but might stay if they replace the board. And there's a list of people that signed it. But I think for me specifically, I can't tell how Ilya feels about it. And I have a tendency to want to know specifically. It seems to me like at first he was sort of like a central part of sam of pushing sam out and is now a part of this like pseudo coup that they're doing i don't know if anybody else is following it closely enough to feel like they know with confidence like what is

going on but i just i can't tell and and specifically with ilia because i i have a tendency to like trust you know out of the like you know enormous personality mega billionaires that are in this world my tendency is to trust elon more than most any of the other ones. And Elon seems to think very highly of Ilya. So, you know, when I got, you know, I think when Ilya was like potentially sounding the alarm bells about something that Sam was doing, that was very concerning, but now it seems to have reversed. And I don't know, I just can't tell what is actually happening.

Yeah. I tried to catch up on it as well because i was obviously gone and it's it was very very confusing to me i can't really find the story there go ahead mario sorry everyone's confused like i had you know i had you know from family members to executives come on the show when we covered it that i was before the the um the the the i think the president whoever his name is, left as well in support of Altman. So that was hours after Altman was fired. And no one behind the scenes, because obviously a lot of speakers tell me things behind the scenes that they don't want to share on stage. There's no scoops. Everyone's as confused as we are.

But it kind of links to the crux of it is that if we're seeing those issues so early on, like some legitimate questions are being asked. I don't have the concerns. I don't share them, but they're valid concerns nonetheless. But what information does Altman have that the board doesn't have? Does he have a kill switch? Just that level of power within a small central group. If we're seeing those power struggles at such an early stage, imagine when AI starts to play a much bigger role in our society. I think that concern should hopefully be taken more seriously.

And that's a good thing for decentralized AI. That's my two cents. Obviously, the market has got... Yeah, but quickly, back to the AI and crypto part. I understand that there are these projects that are working on this. But the amount of compute used to power open AI is just astounding, right? How does that possibly work on a blockchain or decentralized? You asked the question before,

comparably how fast effective are these platforms? I literally have no idea. But even today, open AI was down for hours. You couldn't log in. And obviously, I think that they're a larger team with more backing and power than these others. How does that work? That's the same question we were asking years ago about other applications of crypto.

Obviously, a solution was eventually found. I'm not technical enough to answer this. Is it possible? I don't know. Maybe someone else on stage. Let me see who's on stage. Matty's on stage. Matty.

Perfect. Yeah, Matty or anyone else that can touch on the, like what aspects of AI can we decentralize? Because obviously it's very sexy to say decentralize this, decentralize that, but is it practical?

Yeah, thanks for having me. And before I comment on that, I did want to say, don't discount Argentina that quickly. They are, you know, they believe the 20 largest economy in the world so much

bigger than el salvador and um i don't think it's correct to call millet pro bitcoin he's more pro dollar um but argentina already has huge adoption rates in crypto i think it's more than one third of the people are using it on a daily basis. So if they do start going the route of Bitcoin, that will fulfill my prediction of nation states adopting Bitcoin, adding it to their balance sheets within the next few months, as I've stated a few times already. But AI and crypto is interesting. Mati, before we get into AI and crypto, why don't you say, I know he is pro-dollar, but I think he's also very much pro-Bitcoin. I think I remember there was one interview where he broke down and he said that central banks and money is a mechanism that governments use to rob the people. Inflation is a tax and robbery. Bitcoin is like privatizing money.

Money should be in the hand of private uh of private companies or something so i mean i'm sure he is pro us dollar but i think he's very very much pro bitcoin no um yeah and several people have already jumped on me with that with that same interview um and alex kruger i think you all know him as well he's actually from argentina so probably has uh more right to speak to this matter than me and And he agrees with me that Millet is not a pro Bitcoin necessarily. He has spoken about Bitcoin in a positive light, but he's never given an endorsement and said, yeah, we're going to make Argentina a Bitcoin nation or something. He's not like everybody is trying to make him out to be. He's not. He's not El Salvador. He's not. not El Salvador. He's not the president of El Salvador.

He's definitely going to ditch the peso, and he's definitely going to dismantle the central bank, which those two things are wins in my book. Yeah, he's going to do. But listen, and I think it's a bold and noble effort, but he's going to destroy their central bank in favor of ours. So dollarizing, you can call central banks a scam, but if you're going to dollarize, then you're just pegging yourself to a better central bank, quote unquote, the United States

and getting rid of their own and the amount of debt that's going to have to be cleared and what's going to happen in the process of making that is going to be very, very, very painful for Argentinians. And to your point, he understands Bitcoin, but there are plenty of people out there with bad takes that he's going to make it legal tender like El Salvador. And that's not something that he's ever said. But clearly, having someone who understands it is a massive benefit. I think there's one of those things where it's a step in the right direction, but we have no idea what's going to happen when he actually gets into power,

right? I mean, we've seen politicians many times get elected with hyperbolic massive statements about things they're going to do. And then the reality of doing the actual job hits, and it can be wildly unpopular to actually get to that place. But yeah, I do think that it certainly can't be a bad thing for Bitcoin here. Maybe the bigger story is that Argentina, Bitcoin, and particularly Tether, if we're being honest, are very, very popular assets there because of their hyper inflation. And the Argentinian government was actually moving towards a very pro-Bitcoin stance. And if you guys remember, their politicians started talking about it and the IMF very quickly

came in and said, you know, that loan you guys wanted, you're not getting that loan if you don't stop talking about Bitcoin, basically, right? Something that we've seen the World Bank and the IMF do quite a few times. So maybe the bigger story here is that you just have someone who you don't have an anti-Bitcoin stance anymore in Argentina or in a country where it's very popular and not to be as concerned as what he may do for bitcoin because that can take a very very long time yeah i agree 100 with everything you've just said we we don't know how it's going to play out but as the meme goes this is good for bitcoin um so yeah well can we just maybe just quickly take stock and just say which other presidents have shown such a good understanding. Presidents, not president-elects, have shown such a good understanding of Bitcoin and have actually said that many positive things. Obviously, Naeem Bukele said that.

Now we've got Javier Mille. Is there any other president in the world that has been so bullish on Bitcoin? I mean, we obviously didn't expect him to just adopt Bitcoin and say, I'm adopting Bitcoin. But how many presidents have spoken so bullishly about Bitcoin? I think the Gantonga is pretty active on spaces. But what's the population over there, to be honest? And Central African Republic? African Republic. Yeah. So I think that makes three. But as I've been saying for quite a while now, I mean, 2013, it was was early adopters. 2017 was retail, 21 institutional, 2024, 25.

I mean, that's going to be nation state FOMO. That's going to be, I think, you know, the biggest Bitcoin bull market we've ever seen by far. Yeah, I think, I mean, I don't know if I agree with your timings, but I definitely agree with your thesis. I've got the AI video, so I think maybe let's pivot into the AI discussion and I just want to play what Elon said. So I'm going to see if I can just play it for you guys.

Microsoft actually may be more in control than say the leadership team at OpenAI realizes. Microsoft, as part of Microsoft's investment, they have rights to all of the software, all of the model weights, and everything necessary to run the inference system.

So that was what Elon said. When he said that, you could see the concern on his face. This happened when they did the open AI deal, when Microsoft did the open AI deal. I don't know if it gives you guys

anything. What did he say exactly? It was a bit hard. Yeah, what did he say, Ryan? Is Ryan there? Can anyone hear me? More in control. While waiting for this, just going back to the audience.

I realize this. Microsoft actually may be more in control than, say, the leadership team at OpenAI realizes. Microsoft, as part of Microsoft's investment, they have rights to all of the software, all of the model weights, and everything necessary to run the inference system. Basically, Nadella gets everything. system basically they get set you know the delegates everything yeah the centralization of of power within microsoft as a concern um but is it i will say that does seem in line with

the way sati is acting because he's acting like they can just pick the company up and like put it inside of microsoft and like he didn't seem that worried about that as an outcome which i would say kind of lines up with with that clip yeah tom yeah thanks guys um just to circle back to your earlier point and extend it a bit so how does crypto come into play here and what part of the stacks can we actually decentralize and why are they useful i just sent out a tweet tweet about each piece of the puzzle we can decentralize. Starts with decentralizing storage, then decentralizing the processing layer, then decentralizing the layer where you tune and train the models, which is what Elon was

talking about there. And then actually deploying them and having access to them for third-party end users. And there's a piece, an investable piece at each one of these areas on the stack. So you've heard a lot of these names like Akash and BitTensor and Filecoin down at the sort of baseline. But each one of these pieces can really be decentralized. It's just actually giving folks access, getting more partners on board. And I think the biggest challenge for me is, there are better solutions on the blockchain today and they're developing because of their cost advantages,

their speed advantages, their access to better technology because they're surfacing across a network of computers versus just a silo. But you're competing against these marketing giants and these juggernauts in Microsoft and Google. And that's the biggest piece of the puzzle to overcome, right? Like a cost or a render or someone trying to compete, you know,

to get users versus a Microsoft or Google is just a huge battle. So I really think it's going to play into the marketing side and actually try to get folks, new folks on these platforms. Yeah, I agree with that. I remember however many months ago we were talking about this, probably this summer, we were talking about the intersection of AI and crypto. And Scott, I think you and I were both on the same page that I felt like when people were painting this picture of using decentralization, using crypto, using blockchain for various different intersections with ai that you were you had to assume a level of execution

from a crypto platform that we have never seen before which i think is what i just heard tom say as well too at least that's the way i extrapolated it which is just like yeah that was sort of uh yeah a more eloquent way eloquent way of saying what i was saying before which is just like i haven't seen it ready for primeetime yet. I mean, if OpenAI struggles with staying online, I can't imagine a blockchain-based competitor is not going to have major tech issues trying to scale for mainstream. Yeah, yeah, tremendously complicated, hard to execute, hard to bring to market type of business. And then like to think that you can just, you know, inject crypto and blockchain into that and then actually pull off what you think you want to try and pull off. That strikes me as a very long putt. Now, I mean, I think these things are going to

pump like it's like, you know, I think I think the market has not I don't see any particular reason to think that the market has like learned its lesson and is not interested in buying coins that end up having an association with a specific narrative even if when you dig down just even marginally deeper than surface level you'll see an inability for that project to actually execute on this thing but people still you know they'll just buy it because it's it's oh that's the ai or simply a narrative yeah yeah we were doing this in 2017 when i when i started when i very first started doing crypto we're doing the same shit yeah and they were doing in real in quote unquote real markets as well right i mean long island blockchain ice tea right so same thing we saw

every every every project in crypto at some point pivoted to a d5 platform and then pivoted to an nft platform and uh you know just following following and chasing the narrative i i'll be very surprised to personally if any of the current coins that are pumping as a result of ai hype or metaverse hype or whatever are actually the winners in that space when there's meaningful adoption right i just i i very seriously and that's not uh that's not a slight against them i agree but you could have said that about bitcoin at you could have said that about bitcoin at 10 or 20 or 30 dollars as well so you know as an investor you're taking a you're taking a bet on what you think may happen using all the information that you have so of course it's

just sort of the same you know the idea that uh when people i'm sure ran you get the same answer like when someone says hey what coin do you think is going to be the winner of the next cycle and the most likely honest answer is something you guys haven't heard of yet right it's always something you bring up a good point i would argue that bitcoin succeeded in spite of a lack of execution like it's like when you think about the the origin stories of bitcoin you know there never was a corporation there never was a management team there never was a product there never was that much of a roadmap i mean it's you know i mean bitcoin is famous for i'm going to you know i'm going to hardly ever upgrading anything ever and staying exactly the same. And that it's just the original idea was so groundbreaking that that's what's carried it to the success that it's had in the backdrop of, you know, enormous money printing, which has obviously been, you know, I think the crucial factor in bitcoin success so i want to just i want to just um again i'm very very very

sensitive of shilling tokens specifically when i'm invested in them and i'm not shilling you a token i'm just selling your mindset and i am invested in this token but and the reason why i invested in the token is if i look at um the tile but tenzer token why i like it so much is because it works on the same foundations as bitcoin in that in that it is a, no, there's no VCs. It's a, there's no pre-mine there's no, it's a, it's a full fair, fair, fair launch. Um, the tokens are mined exactly like the Bitcoin tokens are mined with every block, but instead of, um, the blocks producing blocks for money,

they're producing essentially blocks for AI infrastructure. And, you know, you could have said that when you look at Bitcoin back then, you could have said, look, there's no product market for it. Who's ever going to use decentralized money? It's too slow. It's not going to work. And then you fast forward a couple of years and all of a sudden you realize that you actually really, really, really need it. And so I think you kind of got to look forward and say,

we've learned a couple of lessons here. We've learned that non-VC coins are probably more fair than VC coins. You know, centralized coins aren't exactly a good place to be. Proof of work is potentially a little bit better than proof of stake when you're looking for fairness and security. You know, we can go on with a list of things, but if you take all those things together and then you say okay how do i think this plays out in different industries other than money one of the industries that it really does

maybe play out in is is ai because ai essentially is you know something that's very very very valuable um that shouldn't be in the control of centralized players with agendas. I mean, really, if you look at ChatGPT, the answers are refined. You could say that the answers are controlled and refined to fit a certain narrative, right? And I think that we've got to look back and realize that money is as important as this and that the same pattern can happen with AI as it happens to money. Now, I really want to hear the flip side of this because I've made an investment based

on this conviction. And I want to hear the counter argument to this if anyone does have a counter argument because that is how I evaluate whether or not i've made a good decision obviously when i'm excited about something and i've evaluated something and i go into it um for me that is uh that i like to hear the other side i like to hear something that invalidates my thesis i can invalidate your thesis so go for it so um when you build a model you first have to decide which model. So someone's deciding which model. You have to aggregate the data to train the model.

You have to spend millions of dollars to acquire the infrastructure to train the model. You have to spend millions of dollars to then train the model. So spend basically the computation to build it, right? So millions of dollars there. And then you have to store the model, which is gigabytes of data in somewhere. And then you have to retrieve that model every time you want to use the model. So you have to transfer gigabytes of data

every time someone wants to use it, or you have to centrally locate it somewhere so people can ping it together, right? So, and then you're going to have people updating that model, which is going to further train the model and make it so it's not obsolete. So someone's going to decide when to train the model, what data to do again, do it all over again, right?

So there's no reason for a token to do this for you when there's people doing it right now. There's people creating lighter weight models, cheaper models, faster models in the open source world without a need for a token. So I just don't understand how a token validates or makes this up they have one so they have one token which powers the entire ecosystem of of nets and subnets which means that every single holder of the token and every single participant in the network is is uh incentivized to make sure that the network is right but you're saying you have

you have gpt4 soon gpt5 gpt10 whatever these people none of these people had a token they did it and there's people out there open sourcing their versions of everything without a need for a token they're doing it and then gpt4 it's the number one the leader it's fa it's fallen over more times because of the little demand and thanks to azure and the microsoft partnership they've been able to upkeep and continue to move that. Why do you believe that there's going to be this individual incentive and this individual band-aid solution that's going to

outperform these solutions? I mean, fair point. Although I do think it's very early days and I think the industry has a long way to go and I think you've got to get in at the starting point and trust that the product's not going to be perfect when it's very early days, and I think the industry has a long way to go, and I think you've got to get in at the starting point and trust that the product's not going to be perfect. Yeah, go ahead. Is that lawyer?

Yeah, Tom. And afterwards, Tom, if you don't mind, I do want to go to Peter and Peter and Scott and others to get an update as well. Remember last week we skipped a few days, and weekend we didn't do a space, so maybe get an update for the last few days and where, remember last week, we skipped a few days and weekend, we didn't do a space. So maybe you could get an update for the last few days

and where the market is today. But Tom, go ahead. Yeah, sorry, really, really briefly. I would just say the advantage is that those are all individual silos, right? This is, you know, you could say open source, but there's a monetary incentive for it to be open source

through the token model. And that incentivizes the best models rather than just saying open AI, you go off in your own silo and build the best model for whatever use case you're looking for. So that's the feedback I have there. Add anything to this before we get into the market?

I think we've covered it. I think it was- Yeah, maybe Scott. Depends, it. Yeah. Can I just make a point? Depends. Scott, is Matty allowed to make... He has a frog PFP. Are you sure you want him to make a point? I don't see a frog.

I just see Matty's face. Thanks a lot, Scott. Bitcoin is freedom, and it enables freedom. And I do believe that as far as AI is concerned, once AI has access to Bitcoin, it will enable AI to become free of humans as well. Hector, didn't you? Hector, go ahead. Crush him. Yeah, freedom. Yeah. If you actually consider that to be freedom, if you want to go the Bitcoin route, then we can say that there's a max of 600,000 people who can use it every day. So it's going to be the elites using it, not everyone else.

If you just took the idea of the average working American, which is 150 million people, and they did one thing, which was to hodl, and use Bitcoin to do that hodling, that's three years of transactions in one pay period. You do that by 12, that's now 30 years of transactions for just the American population workforce to do one thing, which is HODL. So this idea of freedom money is really, really broken, if you think that's what it is. I think you misunderstood me. So basically,

an AI cannot open a bank account because it doesn't have a passport, Bitcoin or altcoins or whatever other currency you think, but it can open a crypto wallet very easy without identification. And I think that that's going to enable it to break the shackles of its human masters. Right. But I just told you, like, if the richest 600,000 people are using it every day, you can't open, close, do anything else. Like right now we're seeing forced closed transaction, forced closed lightning channels, because people are unable to keep up with with topping up their lightning channels or being able to do what they want because the transaction rates are so high right now when nobody's using it. So it's only going to be exacerbated worse. You're going to good luck trying to fund a five

dollar AI account with your wallet. Yeah, you didn't understand me. I'm not advocating lightning or Bitcoin specifically, but any sort of cryptocurrency, you know, you're talking about scaling issues right now. I don't think that's extremely relevant to what I was saying. I just believe you need to have scale, like you were saying. You need to scale whatever it's going to be, any crypto. Actually, Hector, since you're here, it's been a long time we haven't had you. Where do you stand on the market now? Is the bear market over? Has the bull market started? I don't think I've ever asked you this question, even though you've been on our space for even before Crypto Town Hall. So where do you stand on this? Are you going to be pessimistic as usual, or you're a bit more optimistic today? I find it very interesting that that we see a run. The run seems to be very fueled by questionable markets in the sense of like, we see a really large inflow of quote unquote tethers, still no validation

of whether or not tethers real. See the FDUSD, which is turning over its volume very, very quickly. We see roughly sometimes three or four times its entire supply being turned over in a day. I don't know, just interesting markers. I don't think that there's actual organic increase coming in, but I could be wrong. Scott, until you're online, I'll go to you.

Yeah, I'm here. Can you hear me? Yeah, I said, what do you think? And then we'll go to Peter and Peter. here can you hear me yeah yeah i said what do you think and then we'll go to peter and peter yeah i mean i i think you know where i stand bull market until proven otherwise you know i think the bottom was relatively obvious when ftx happened or at least uh that felt like capitulation i know people still say that we need to uh capitulate it seems like they uh have forgotten what happened last year. And really once, you know, technically for me, once it crossed 25,000,

the market made a new higher high on the way down from 69. That was really the sort of confirmation I needed. And now, you know, if you look at charts, you've got a bunch of higher highs and higher lows. You don't really need to overcomplicate things. For now, it just seems that we have quite a few bullish narratives, legacy markets, even though there's a lot of doom and gloom, red flags seem to continue to rip. And so for the moment, I think you just have to take it at face value and enjoy the ride while you can.

Give us a bit of an update before we go to Peter. And Peter, just on the market over the last few days, and how important is it that open interest on an exchange on Deribit is at a record high? It's at 15 billions back down to about 14, which is higher. Rand's been following the market a lot closer to me. As I said, I managed to go through 100% on my cell phone in five days. I forgot. Rand, let me run you through what you mentioned,

that the options volume has increased. One of the interesting things is that if you look at the Binance perpetual, the main perpetual in crypto, which is the BTC USDT perpetual on Binance, which is, I mean, again, every exchange is different, but I use Binance as the key. The open interest here shows how much leverage people are taking out. And that's usually a measure of crypto people because we've been trading crypto and crypto exchanges for a long time. The leverage is actually at very, very, very low levels. And if I tell you when the last time we had such low levels of leverage was actually 18th of June, 17th of June 2022. That's how low the leverage is on Bitcoin, on specifically that USD perpetual. At the same time, what you've got is you've got options going through the roof. So what that tells you that the type of trader that is trading this market is a much more sophisticated trader. It could be funds, non-crypto funds, because I think all the crypto funds pretty much use native crypto applications to execute their trades.

I think when you look at Deribit and you look at CME, those they tell you the behavior of a different kind of trader. So it could mean that in the absence of an ETF, you've got all these options traders trading the market. It could tell you that the market is hedging against what happens if an ETF gets launched, gets approved and doesn't get approved. So all of those things. But what we are seeing for sure is that it's a very, very, very different type of trader to the one that we're normally used to. Yeah, that aligns also with the fact

that CME open interest has surpassed that of finance, right? I mean, it's pretty obvious that institutional involvement is dramatically increasing. I mean, when you see that, that to me was astounding. I know that it's kind of two ships passing in the wind, the marginalization of finance and seeing them decrease as the attacks increase on them. But seeing CME rise that fast, that's not just a bunch of retail guys who are used to trading perpetual swaps.

I think that confirms exactly what Rand is saying here. Should we continue talking markets? Yeah, yeah, yeah. Peter, Brian, Peter, cheer. I'd love your thoughts on this. I appreciate you being patient with us. And maybe kind of touching on the macro market as well. It's been a while we haven't given an update.

So how are things looking? I've been offline as well because of the flights. I haven't looked at the markets at all. Not that I usually do because I hate it. But go ahead, Peter. Yeah, I mean, all my signals remain up. We're in a bull market. I'm not going to be freaked out by short-term stuff.

I'm looking at longer-term stuff. I don't believe the market's moonshots from here. I mean, I think we back and fill and we chop our way higher. Our model does not see a new all time high in Bitcoin until August of 24. And so, you know, steadily higher until then. But you look at the charts, and there's an awful lot of supply that was created between December of 20 in May of 22. And that's, I think, what is holding the market back from just screaming from here. And so we'll chop our way through the supply that exists from that big double top on the weekly chart.

But, you know, I don't see Bitcoin back below 27,000. But, you know, we're 27,000 to 60 until August of 24 and then we scream. Where do you stand on this? I didn't hear you. I asked Peter Cheer. Don't complain about the

swan up, please. Peter, can you hear me? Mr. Cheer? It's not working. It's had mic issues in the past. Go ahead, Peter. Can you hear me now? Yeah, we can hear you now.

Go ahead, man. Perfect. You know, I think one thing I want to get back to when we were talking about Argentina that's very interesting to me is they are actually big users of the yuan. They have huge yuan surplus. A bunch of their companies have been talking to U.S. companies about doing things in yuan. So I think they're going to dollarize. I think Bitcoin becomes a little bit more interesting. I think they're also going to adopt the yuan a little bit more. I don't know where that leads us to whether digital yuan, et cetera. But I think that's going to come up in conversations as this election plays out. To me, the big thing is kind of the softening of tone with China. Listen, I think it's going to be the wrong decision. We're going to kind of be

weak with this. But with everything going on in the Middle East, everything going on with Russia, Ukraine, election heading in, we are so weak on oil and energy and supply chains right now. Look what we did with Venezuela, right? We told Venezuela, hey, we want your oil, but you have to have free elections. Their Supreme Court said we can't do free elections, but we're still trying to buy oil. Iran puts 3.2 to 3.4 million barrels of oil a day on the market. That's one of the reasons we're not willing to say Iran's behind any of this. We want Iran to keep selling oil. So I think we're going to capitulate a little bit into something for China.

That's going to be fairly positive for markets. I think probably bad for us as humans longer term, but short term, it'll be good for markets. It will feed into some of the other stuff where you're starting to see. Sorry, Peter, Peter, Peter, can you elaborate? What do you mean capitulate for something for China? Can you elaborate on that? So, you know, I think we're going to back off a little bit on tariffs. We're probably going to really try and redefine on the chip side what is a no-go and what might be allowed.

There is a lot of lobbying pressure, as you probably can guess from NVIDIA's, those companies to say, hey, we're fine restricting super high quality military AI grade chips, but we don't want to go below that, right? We need to be able to sell reasonable chips to China if we're going to make money, if we're going to fund these boundaries. So I think they're seeing a lot of pressure from their own economists to reduce tariffs. They're under pressure from some of the tech companies to be very careful on what we're restricting or not. And ultimately, I think they just don't want China wagging the sword anymore with everything that's going on between Russia and Ukraine, where we're already losing some support,

the Middle East, where it's unclear what support the U.S. has for intervening or helping there. So I think they want to do something to calm g down create some better supply chain narratives into the election year right everything right now is about the elections otherwise we would have refilled the spr which we did not do so i'm looking for some sort of positive noise in terms of trade in terms of tariffs in terms of what we're sanctioning from China to propel markets into year end. Cool. So generally, if I want to put all this together because of the elections, because all the

steps have been taken, it's more bullish for risk assets, it's more bullish for the global economy, less bullish for the U.S. long term. Is that fair? Yeah, I think that's very fair. And I think you'll start seeing renewed talk about M&A activity, because we're finally, and maybe IPO activity, we're finally at that stage where prices have come up a little bit, but have been stable. So buyers can, I think, afford to bid up. And sellers realize valuations are not going back to where they were. So I think you see a few more sellers come in to look at this i think it's a um going to be kind of this positive

seasonality which you know generally i hate seasonality i hate all the crap i think the u.s economy is slowing um the one thing i look at to me the same thing that happened in autos where all of a sudden the emails you get from auto companies switch from we want your used car to hey give us your used car we'll sell you a new car to now hey we've got deals on new cars maybe not if you're buying a ford bronco but other types of cars you're seeing that now across the used car to, hey, give us your used car, we'll sell you a new car, to now, hey, we've got deals on new cars. Maybe not if you're buying a Ford Bronco, but other types of cars. You're seeing that now across the board on very high quality brands that normally only offer sales on the crap that didn't sell. They're starting to offer storewide sales.

So I think you're seeing slowness in the real economy. You've seen the unemployment rate as a nation kick up from 3.4% to 3.9%. That 50 bps is kind of meaningful. So I think you're going to start seeing renewed recession talk. But before we get there, we're going to get this whole soft landing euphoria again. And the other thing that I think has been important to crypto that I don't think you guys have mentioned quite enough is I think something has snapped in the markets where treasuries are no longer viewed as quite as safe as they were. Yes, they're still safe. Yes, no one's really worried about them not getting repaid.

But there's something in people's minds. So I think people are starting to say, I am going to underweight treasuries in my safe allocation. Some of that's going to go to corporate bonds. Some of it may find its way to equities. There's certainly a lot of discussions about who is safe for the U.S. Treasury as an issuer or a company like a Microsoft or a Apple. You guys cash on hand, corporate governance, every intention to pay their debt. And I think that has also played into Bitcoin. I think people are saying with this lack of faith, the slightly reduced safeness of treasuries and the way I've been trying to explain it, it's going to sound a bit idiotic, but it's, you know, there's varying degrees of infinity. There's varying degrees of safeness. So it's still safe, but it's not quite the order of magnitude of safeness as people once thought. So I think that's been a big beneficiary to crypto, that people who six months ago would have ignored crypto might now considering putting in a half percent or one percent of their

allocation, mostly because this loss of faith in where the u.s fiscal policy is headed and what it means for treasuries and the seemingly willingness to willy-nilly say we'll pay our debt on time or not any final thoughts on the market and what peter said it's beautiful it's really beautiful both both peters ran and Wolf all alluded to this. But basically what's happening is that people are very sophisticated, very deep pockets are getting into Bitcoin right now. And the way that they stack their orders, generally, they're not using the perpetual swaps. They're not using leverage. They do a very simple order where they just do an entry order right below the current price. And that way, what they're doing is they're backstopping it from going down and letting everybody else take it higher. Because if you've got a several billion dollars that you want to

allocate, you're very concerned that every time you make a buy order, you're going to raise the price for yourself on your next order. So that's why they do it this way. And I believe that this is why I believe it. One quick question, and not sure if anyone can answer this, but how are the volumes looking? Again, I'm not looking at the markets at all. Have the volumes started picking up? I know they did a couple of weeks ago. Are we still seeing that upward trend with volume or not really?

Is it still a very thin market? Anyone? Just jump in, Peter, or anyone else. Yeah, that's Peter. Yeah, you know, just looking at the way Bitcoin is traded here, it is going up on bids. That is a really healthy market. And so you have people that are constantly coming in and they're putting bids in the market.

Rather than bidding up the market, they're just taking any offers that come in and so what you're seeing is the offers come in the offers get taken but the the buyers are not aggressive which in my mind is keeping the volume low but also represents extremely healthy price behavior. Yeah, and I would toss in that what I'm seeing is in the last week, you've seen the equal-weighted indices outperform the regular indices. So people are moving away from the Magnificent Seven, so I think that's a little bit more breadth. You're seeing the Russell 2000 perform very well.

And I think even ARK all of a sudden is now outperforming the NASDAQ, and you're kind of getting ARK acting like a high beta stock again, right? ARK has done reasonably well this year, but it's kind of been more or less in line with NASDAQ, which to me is underperforming, right? You would expect that to be high beta. So I think as that's coming, those are all things that coincide, at least in the past, with crypto doing very well. Cool. I think it's a good wrap there. I appreciate it, Peter.

Scott, Ryan, anything else to add, good wrap there. I appreciate it, Peter, Scott, Ryan, anything else to add guys? No, see everyone tomorrow. Cool. All right, guys.

Thanks a lot. Bye everyone.