The Wolf Of All Streets - Analysts On Stage: Crypto All-Time Highs? Or Reversal? | Crypto Town Hall

Episode Date: February 27, 2024

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testing testing can you hear me guys dave can you hear me yeah we can hear you okay hold on let me put my bluetooth on but then travis do you invest i've never asked you that question do you guys invest in any startups uh you just broke up for a second say that one more time do you personally invest you or your fund invest in startups? Not really anymore. We raised a venture fund from the existing investors in our hedge fund in the first part of 2022. And then when FTX collapsed, we just gave them all the money back because we just thought it was kind of messed up to keep – because every single venture fund investor was also an investor in the hedge fund

that was stuck in FTX, so we just thought it was kind of messed up to keep their money in the venture fund when we just screwed them over so bad in the hedge fund, so we just wound down the hedge fund and gave everybody their money back. So have you, have you thought about, cause that's obviously what we invest in heavily. Have you thought about opening one again? Yeah, maybe at some point. Yeah. Maybe at some point. Yeah. I mean, there's certainly a lot of opportunity out there, you know, to invest in vaporware at a very low market cap.

It then goes up a lot and then you can dump it on retail. Or you can lock it up for a year, two, three years. But yeah, just for the audience, what Travis is mentioning is something we've discussed in previous spaces, is the model, by the way,

just for the audience, it's repeating itself all over again, the model of investing in startups, but then you get a big unlock at the beginning. Larger investors

typically don't, and the better the project, we talked about Pixels last week, which we're investors in, they had no unlock, they had a whole, a full one-year lockup.

So then that kind of solves that problem to an extent. And we're seeing more long-term lockups for quality projects, but we're seeing a lot of mediocre to crappy projects desperate for capital. What they do is they give a big unlock to VCs just to be able to raise capital. And what those VCs or KOLs do is just get a big unlock at the beginning and just dump it on retail. That was very common in the last bull market. And unfortunately, it's starting all over again. But yeah, so let's kick off the show. I think we can't, before digging into projects or narratives, the first thing to do is look at the markets.

Peter, you put out a good tweet. I think Randall was talking about it on his show as well. Where are you? Peter, are you there, Peter? Tell us more about your thoughts on the market. I think your target is up to, from memory, it's like 200k, or am I mistaken? No, that's about right. I really suggest that folks out there might read a post that I did on the blog, and they can get to the blog through my Twitter page, two weeks ago where I really took a look at halvings,

and it was just absolutely remarkable. As I view Bitcoin, we've been through, we're in the fourth major bull market cycle. And in the previous bull market cycles, if you count the time from the low of the cycle, which in this case goes back to December 2022, until the halving, that's the exact amount of time then that should go by us before we see the high of this cycle in September of 2025. And if you look back through past cycles, it's been uncanny that the number of weeks from the low to the halving to the high has been spot on exactly the same in past major Bitcoin bull market cycles. So, you know, that is my key calendar date is we go into the half and that'll be halfway through the bull market. And the fact that we thrust up through what I viewed

as a channel, a 15 month channel on the charts in the last two days indicates to me that the market's accelerating at a higher rate than I really kind of thought it might have. My target had been 120 to 130 based on a bull market that would go at the same pace we've seen since the lows. But it's obvious that the acceleration has now occurred. So I have to up the target. And if you look back at the document that I posted on the blog, I think I lay out the case for why it's 200 now instead of 120. And would you say that the ETF is now the new catalyst?

Just going to give everyone an update on the numbers. So yesterday's total inflows were 519 million, which is higher than the average. Now we saw gray scales, the outflows dropped to the lowest they've been. I think the historical low of $22 million. That's pretty much it. And then the volume, Rand kind of got excited yesterday talking about the inflows, but it was the volume. Well, the volume did hit a record high yesterday.

Daily trading volumes at $2.4 billion. And BlackRock's iBit did a volume of $1.3 billion. That's 30% higher than its previous all-time high. Not higher than the average, higher than the all-time high. So Peter, and we'll go to the rest of the panel. We've got Travis, William, Dave here. Can we say the ETF now is the new narrative, is the new halving, and we could see an all-time high possibly even before?

I ignored anyone that said we could see an all-time high possibly even before like i ignored anyone that said we could see an all-time high before the halving even though i'm horrible at speculating and charting uh but then looking at the the market now i think bitcoin's at what 57 57.2 where east is at 3.2 um could we see an all-time high even before the halving oh i think that makes perfect sense i mean the reality is Bitcoin's very unlike an awful lot of markets because there's a limited supply. And, you know, there's a certain pace at which new Bitcoins come online. So we have this new demand coming into the market. But the reality is people like yourselves and me, I'm not about to sell my Bitcoin. And so, you know, I'm in Bitcoin

for the longer term. So the ETFs are going to have to bid up the price. And they're in a bit of a pickle now because they have new investors coming in. They have money that they have to apply. They have Bitcoins that they have to buy. And the reality is, at yesterday's price or last week's price, there are not a lot of bitcoins for sale. So I think they're caught in a bit of a jam where they're going to have to bid the price up. I wouldn't be surprised, though, that we have a temporary or local high coming right into the halving date. Then we could drift, not necessarily big correction, but chop around for a month or two before we get going again.

So to some degree, it's going to be a mini by-the-room or so look-back when halving takes place, but it's not anything that I'd be willing to sidestep my long position for. So, Dave, I just want to add one more thing for you, Travis, William. We've got Eric, our friend, put out a poll saying Bloomberg, he predicts that the Bitcoin ETF could pass the gold ETF and assets under management in less than two years. What would that mean for the markets?

Peter, I had a quick question for you. Something you said at the beginning there, you're talking about like the remarkable sort of seasonality or cyclicality of Bitcoin, referring to crypto broadly, too. And I know you've been doing this for a long time. to some other asset, financial instrument, a commodity, something like that, that has historically moved with some comparable type of, you know, just like how strong the seasonality or the cyclicality is to this asset and to this asset class? Yeah, great question, Trellis. But let me just say this, if you discount some of the other macro cryptos and especially some of the wild and crazy altcoins and so forth, there's no other market in history. And I am a chart addict and look at charts throughout decades and even centuries periods of time. there's no other market like Bitcoin. I mean,

we're in the fifth parabolic advance in Bitcoin's history. On a log scale, you cannot find another market that has done that type of thing. The only other market, the only other price scale that I can see that's kind of comparable to Bitcoin would be German interest rates in the 1920s. Love that. Yeah, because it's something that I've talked about before of just the – I had a tweet thread I put out at the beginning of this month that went super viral, and one of the concepts I talked about was the strength of the mimetic reflexivity that this meme of three up one down, which kind of refers to Bitcoin and kind of the crypto ecosystems, you know, broad tendency to be the best, you know, Bitcoin's the best performing asset three years in a row.

And then it's the worst performing asset the fourth year. And then it's, and then it resets again. And we're now on like the third full, you know, iteration of this basically. And that that has created such a strong memetic reflexivity around the market's collective agreement that we are in the good part, the meat of the good part of the three up, one down right now. And they're just, it's like, it seems like it's never been stronger because we have now seen it one more cycle play out like that. And then you combine that with these spot Bitcoin ETFs. And then you combine that with it looks like the Fed is starting an easing cycle. And you combine that with stock markets ripping the new all time highs consecutively. And there just seems to be such a broad agreement right now. And that's what I was going to I was kind of asking you about, about like, you know, some of that stuff. Peter, before going to William and Dave, not sure if your mic is working. Is there anything else to add? Any other

bits or pieces from your report? No, I mean, I think that covers the waterfront because I don't... Did you cover, did you talk, I haven't read your report, did you talk much about Ethereum on your report? As you know, I'm kind of a Bitcoin guy and crypto is Bitcoin, Bitcoin is crypto. So I haven't read your report. Did you talk much about Ethereum on your report? No. As you know, I'm kind of a Bitcoin guy, and crypto is Bitcoin, and Bitcoin is crypto. So I didn't talk about Ethereum.

But William, we'd love any thoughts you have on the discussion so far, and maybe kind of touching on Ethereum as well. L2, the TVL is approaching the $30 billion mark. So it's continuing to hit all-time highs. So I'd love your thoughts on the ETH narrative and the ETH ecosystem, especially with the upgrade they have in coming. I'm not sure when the upgrade is. William? Yeah, so the way I look at it is that there are four things going on right now at the same time in terms of different variables. One, there's the halving. Everybody's talking about the halving. All's talking about the halving. All that means, the halving,

is that the block rewards will decrease from 6.25 bitcoins to 3.125, so half of it. And this means that the miners have to make more money. It can be more difficult for them to make money. One way they do that is by the price being higher. So we could speculate and say the last four years, the average price, let's say, was 40. I'm just eyeballing it. So we could look at 80,000 as a price target by the end of the year so that the miners still keep making money. That's my estimate.

Number two, you have the ETFs. Okay. Yeah, there was a pop in the last few days, but we're still at very small levels in terms of the Bitcoin inventory. Even at 15 billion, we're still at 2% to 3% levels. It's not too bad, but it's not at the 14% level that it could reach. Thirdly, we have the technicals. All the chartists, the technical people that will look at the chart and say, yeah, based on the chart, based on our experience, it's going to go to this and this and that. It's going to reach the all-time high.

I have no doubt we're going to reach the all-time high in the next few days, if not few weeks. That's what the chartists will tell you. And then fourthly, there is reality. So the reality in the crypto world, it tends to swing like a pendulum. And rarely do we have parity in terms of valuations equals reality.

Especially in emerging markets like the Bitcoin market is, cryptos are. So the patterns are more erratic. And during the bear years, the last couple of years, perhaps, when the SEC was pounding on the industry, we were asking ourselves, even just a few months ago, do we really do this? No, we didn't. And similarly, as now many prices are close to

reaching the all-time highs, we need to also ask ourselves, do we really deserve this? So in closing, yeah, in part, there is some catching up. So we have to catch up to all these barriers. But we also should be careful that if speculative activity is not matched with cryptocurrency or token utility, whatever the levels are that we end up with, it's not going to be sustainable. So we've done a good job as an industry to push speculative activity, and that's okay, because it funds innovation. But we shouldn't,

we should also keep our eyes on the increased utility and functionality. And I'll close by saying with higher valuations comes higher responsibility. And talking about, William, you said that we could, you know, the chartists would say we'll hit new all-time highs within the next few days. So are we just putting behind us the pre-harving dump? We missed that and that's no longer a possibility. Oh, it's always a possibility. It's no longer likely in your opinion, William. I mean, it's all part of the same equation. The halving is going to push up the prices so that the miners have to keep making money.

So it's kind of – and you have to look at it on an average basis. So again, the best way I can do it is eyeball the last four years average and project that as what it's going to be. And we go from there. Yeah, I think that the interesting part is. You have to remember, U.S. is still half the world's investable assets and was only scratching the surface in Bitcoin. And we've had this narrative in the crypto world where, you know, people would use words like Bitcoin's the lead sled dog. Bitcoin would start a rally. It would then pause as people rotated hot money into altcoins and Bitcoin would sit there for weeks at a time.

And that narrative is exactly what went on through all the previous cycles of Bitcoin and crypto. And some of us kind of groan because we see Dogwith Hat going crazy. And before that, it was Shiba or whatever meme coins. And as you put someone used the word vaporware projects, I mean, you know, there are still a lot of level ones that have no use case, as far as I could tell, nor prospects for use cases. Yet there are others that have potential, but they're all potential, whereas Bitcoin is a separate thing. Bitcoin is trying to become a store of value. I say trying. It's done a great job of it so far. But critical mass is at a dramatically higher price point. But now we have a new world where a lot of investable assets are looking at that.

And if you think about it and you listen to Michael Saylor talk or anybody who is a Bitcoin evangelist, they say, well, look, we're going to have a digital store of value that will be the base layer of the Internet of Value. And what is the price of Bitcoin at that point? The answer is it starts at where gold is. So it's somewhere between five or six hundred thousand price per Bitcoin. And it ends as the denominator for value on the Internet. Now, that's great, except for probabilistically speaking, the market is saying, well, maybe we got a 10 percent chance of that happening now. I don't know. And a lot of people who are in Bitcoin, the people who don't want to sell it, us, many of us are saying, look, we think it's way higher. And so we have the reason the cycle is different is because instead of Bitcoin pausing,

while money is rotating into into other coins, the money is coming from the outside and the crypto money has paused. And so we see, you know, everything going up at this point. But, you know, look, like these things change, right? You know, there will be outflows. This will be volatile and people should understand that. But at the end of the day, supply and demand, economics 101 matters. And there's a lot more demand as people are starting to catch on to this narrative than supply. I'll leave with one thought that I've said before, but I don't think people really grok, which is when you compare the state of the network to the previous all-time high, to today's pricing, honestly, the state of the network, depending on which metric you use,

is anywhere from two to five times stronger in terms of whether it's number of wallets, whether it's hash rate, whether it's distribution. It doesn't matter. The network is dramatically higher. And so getting to the previous all-time high, to me, is a slam dunk. The real question is, will it get to somewhere the two to five times the previous all-time high, which would basically be the same level of euphoria? And I think that's really what you have to watch out for. I want to go to Matthew. Matthew, I didn't know you were here.

You changed your profile photo, but it looks like that was a bit deceiving. I was going through your Twitter before the show, and then I want to go to Lucas, by the way. I heard bits and pieces of your interview about DeFi summer, Lucas. But, Matthew, you have a B2B price prediction of 80K for this year and 275K by 2028. We were talking earlier, I think it it was yesterday about institutions are not here sorry retail is not here yet if you look at other metrics including us in the media look at like youtube views twitter space listeners it does confirm or does reiterate that that retail isn't here we'd love to get your thoughts on how you came up with that prediction of 84k for this year um and then how we could hit 275K and what that means for the rest of the

market outside of Bitcoin. Hey, Mario. Yeah, thanks for having me. And Peter, I really appreciated your technical views and the paper you wrote. So thank you for that. Our price target for this year of 80K is based on a 500% trough to peak return, which, you know, it would be the smallest cycle return by a wide margin. The previous smallest cycle for Bitcoin was 2000% trough to peak. So we tried to be conservative in that 80K number while recognizing that an all time high, you know, is probably likely in Q4. I think that these numbers need a refresh to incorporate the addressable market for Bitcoin Layer 2s. That was not in our original work. Our 275K price target is simply half the market cap of gold without incorporating Layer 2

traction. I think what we've seen from ordinals over the last year is that that and from Stacks performance, frankly, in the last week is that the layer two ecosystem is much more vibrant than people expected. And Ethereum's roadmap has paradoxically maybe lessened the differentiation between Bitcoin. So the other thing I'd say is that we've just reached 90% of UTXOs in profitability. I looked back at the history of that series. Basically, every time we hit 90%, we tend to hit 100%. So I'm not against this idea of an accelerated cycle and possible all-time high pre-halving, although that would be contrary to past cycles. The other thing I'd point out is that ETH is now up more than

Bitcoin year to date. So this has been a very, I think, fundamentally driven, large cap driven market. Large caps are up 31% this month. Small caps are up like 22%. And that's how we've been positioned is that Bitcoin dominance tends to rise into the halving. We're at 52% right now. We were at 62% when we hit the halving last time. So, you know, on the lookout for overextension, but I think you play the momentum here. I'm with Peter. You know, stick with large caps. Solana, Ron, we experienced as well. We've talked a lot about L2s and Solana. So we'd love to get your thoughts on L1s as well with ETH,

with the ETH ETF narrative. Yeah, I put out a Twitter thread on December 23rd last year, which pretty much was the pico bottom for the ETH-BTC ratio and rotated into ETH for the first half of this year, expecting a better narrative on the ETF. I just saw today the Denkun hard fork went live on testnet. A16Z just made $100 million investment into EigenLayer. I think that is a key enabler of ETH leverage for this cycle, which will come from retail and on-chain rather than from institutional OTC providers, most of whom went bankrupt. Although we're seeing the emergence of some of that bankruptcy as well here. And any specific narratives that are interesting to you, Matthew? The ones we've talked a lot about AI recently.

I try to always sneak in gaming whenever possible. I want to do a gaming space soon. We're going to have Lucas talk about DeFi Summer 2.0. Any specific narratives that interest you? I agree with you that the gaming environment is getting more constructive. I don't want to name names because these are small cap tokens, but we're noticing more attractive game launch calendar and some more momentum in that space. So we've increased our allocation to gaming tokens over the last month. You can mention token names if you like, Matthew. If you're invested in them, definitely if you can mention them and say,

you know, we're investors, if you like. I'm going to let them run a little bit more. Okay, no problem. I'll mention one that we're excited for is PortalCoin. I think everyone knows about PortalCoin launching on Binance gaming ecosystem. So we're investors in that. If anyone wants something to watch for this week, I think they launched in two days. They got $8.5 billion staked.

And we're investors. We're heavily, you know, pretty much any gaming project that's's launching now we're investors um but we haven't touched any other ai we're invested but we haven't we haven't done much in the deep end ecosystem your thoughts on that matthew uh we like helium and hive mapper and have put out research on on both of those projects uh i noticed that helium had a a high in new subscribers yesterday. So, you know, we think they're doing a good job of differentiating through the crypto rewards. And then Highmapper's had some pretty impressive dashcam updates that make it much easier to sync and start mapping immediately without a bunch of different clicks. Like the

amount of time I've had to spend on my smartphone, calibrating it to the high, to the high member dash cam has fallen dramatically in the last couple of quarters. Now it just syncs and goes. And you can see from their kilometers mapped that others are finding this as well, because that has accelerated also. Like, I'm not sure that that's exactly where the beta is right now because of the Bitcoin momentum. So these are small positions. Like in my strategy, it's like 80% L1s and then 20% L2s and dApps and deep end. Before you jump in, before we go to Lucas, and just before we go to Andrew, guys, in the audience,

I've got two questions for the audience. I'm going through the comments. One, is there anyone that still thinks we could see a dump before we hear, and I'm talking about dumping, a 20%, 30% drop before we see all-time highs? Or is everyone just bullish because it seems like there's extreme greed, the leverage is just spiking right now. And then the other question is,

what narratives are interesting for everyone in the audience? What do you think we should talk about? Andrew, we'd love to get your thoughts, and then we'll go to Lucas to talk about different. I don't think that the pre-habbing dump is a previous cycle narrative, and let me tell you why. The Bitcoin ETF demand on an hourly, daily, weekly basis is fundamentally changing price action with Bitcoin in particular. When you have

volumes that, you know, 30, 45 days out are setting new highs past an enormous, not just marketing, but just market understanding of the launch of an ETF, probably the most followed launch of an ETF in a decade with the Bitcoin ETFs. And to set a new record in volumes yesterday versus what it looks like the first day, that's a remarkable development. And that goes to demand associated with these Bitcoin ETFs. That kind of demand, the inflows that continue at a very, very robust pace. And oh, by the way, this is all with a backdrop of grayscale and grayscale holders

dumping Bitcoin onto the market over the last 45 days every single day, right? So that demand, that particular supply coming onto market is immediately scooped up. Price has shown us that every time there's a dip, it's being eaten alive by the Bitcoin ETFs. So the idea that we should expect a pre-halving dump, I just think the narratives have changed. I think the evolution of price action has changed. And again, there will be continual evolutions of price action because we've only got 20 to 30 percent of at least here in the U.S. of folks in the retail space being able to buy these Bitcoin ETFs. So I think the pre-halving dump narrative, I think that's different than it has been pre-valid. What about – go ahead, Matt. I was just going to say that i i totally

agree we just went back and looked at the last three halvings with a fine-tooth comb on price action and a number of on-chain metrics and um the the halving price dump is kind of a myth what does tend to happen with good regularity is a hash rate dump. So the hash rate has fallen between 12 and 19 percent in the two weeks leading into the halving and then immediately after. And then it tends to make an all time high within three weeks of the halving. And there's no meaningful pattern to derive from the price action. So I agree with Andrew there. The other item, and I don't know if this is something that we're going to talk about more in detail as these spaces go along, or if it deserves its own individual spaces. And I know that the community has talked a lot about the Ethereum ETF. I'm just going to add, and people have seen it on some of my posts, there are people inside of these ETF companies, some people that were part of seeding the Bitcoin ETFs, people in the legal community.

Those insiders, several that I've talked to, and people on the Coinbase side, Jane Street side. So these are people that are actually handling the volume on a daily basis, custody partners. They're fairly negative about an Ethereum ETF approval in May. I know that's kind of the first date that it's going, you know, potentially could happen and all of those things. But I've asked this question nearly every week of some of my contacts, people very, very close, you know, people that were on the floor of, you know, the New York Stock Exchange at the launch of BlackRock's, you know, Bitcoin ETF. So standing shoulder to shoulder with the folks

that architected that entire thing. Fairly negative on an approval of an Ethereum ETF in May. Where it goes from there, how that plays out, what kind of delays potentially the SEC uses. The other point of interest that I've asked many, many times, and I keep getting the same answer, there is not a significant appetite for any of these applicants for the Ethereum ETFs to sue the SEC. The grayscale suit was a one-off. It was fantastic. It worked. All of those things. But individual companies are not in the habit of suing their regulator. But why is that, Andrew? It isn't, and this is my ignorance from a legal perspective, but the grayscale win, can't they act in some way as a precedent

and make it easier for EDFs? That narrative does exist. That is a reality. I'm not allowing that reality to take a back seat, but that doesn't mean that the SEC can do effectively whatever it wants, right? Until you decide, you know, the SEC is going to say, okay, we've made it clear in our statements that we weren't even completely on board with Bitcoin ETFs, but we did it anyways, right? It was a three to two vote, by the way. It wasn't a five zero vote.

So one vote that flips and you're toast, right? So I've asked these questions. I've asked that question, Mario, you know, 15 different times. And I still keep getting the long form answer from legal folks in this space that's saying, listen, Gensler has effectively kind of given his answer on this. Bitcoin ETFs are it for right now. The length of space between now and when an Ethereum ETF gets approved, I think ultimately it does happen. I just think it's a longer tail based on the conversations I keep having than people think. I don't think in May, I don't think it happens based on what I've been told over and over and over again. Dave, before I ask my next question, which is going to be about the, could we see a shorter

bull cycle now, considering that we didn't experience a pre-harving dump or the myth of a pre-harving dump? That's my next question before going to Lucas afterwards. And Lucas, you can jump in anytime, by the way. So let me answer both questions. On the Ethereum ETF, I actually have a conspiracy theorist opinion. I wouldn't be surprised to see a Ethereum ETF approved, but – huge but, actually – I would be stunned if they approved it with staking. And why do I say this? Well, because an Ethereum ETF without staking I think would be a failed product as opposed to a successful product. Because at the end of the day, unlike the Bitcoin ETF where you hold the Bitcoin ETF and you look at the spreads, they're a penny. You don't pay anything to trade. You know, it's dramatically cheaper for people to be able to buy and exit than buying or selling, you know,

BISPOP Bitcoin on exchanges if you're retail because of the way the fees are. So there's no, and the fees for holding are smaller than the fees for that you pay in commission by a lot. So unless you're going to trade, you know, unless you're going to hold for, you know, five years and you know that up front, you're pretty much better off with the ETF if you're just an individual in the US. And so that's what's going to happen with Ethereum. You're giving up the entire staking reward. And so my conspiracy theorist hat says Gensler is not dumb. He's actually a very smart man. He wants to see a crypto product fail, then approve it and let it fail. And then the industry needs to understand that because if you look at the Ether futures product, it did not do very well, right? You know, it's there, it exists,

but it was hardly the rousing success that people were expecting or hoping for. And so that on the ETF, I mean, I do agree with the previous speaker that the most likely scenario is they find a way to kick the can, but be aware that there is that in-between scenario, and so people should understand that. That doesn't mean – I still think the bigger story in Ether is the upcoming basic upgrade. What's the – yeah, can you talk about that upgrade? I'm just going to give an overview for the audience, and what's the date for the upgrade? Yeah, I don't know. I'm not directly in the weeds. I'm just. I'm relying on smarter people that I listen to on

your spaces than others. But basically, the issue is obvious to the extent that Ethereum needs to compete with Solana for speed of transactions, etc. Facilitating Layer 2s to be able to do so in a very consistent way is part of it, but I am far from an expert there. But I want to go back to your pre-dumping, your pre-having thing. And I'll basically condition it with an if. If we don't see a major sell-off in risk assets in March, then I think you're not going to see a major dump pre-halving. However, I think that it is when people start

paying the tax bills, which generally happens the back half of March for the immense capital gains they made last year, and I'm talking in tech stocks, et cetera, you could see a bit of a route in risk assets. And if that happens, now you have a lot of new holders of Bitcoin by the ETF and very, you know, aggressive spreads where you could trade it cheaply. The ETF can become a double edged sword in periods of volatility. So be aware of that. It is certainly possible. Everyone loves the ETF now, but, you know, we're going to count down to the day where everyone's complaining about the ETF. Oh, yeah. But I mean, look, on balance, long term, it's driving adoption, which is driving most of our... Look, I've said the all-time high is baked in the cake. I agree with the previous guy. I think we get to digital gold status. We have a far higher likelihood than the market's

pricing. That's not what I'm saying. But what I'm saying is, you know, there's a great meme out there where, you know, I didn't invent it, you know, the one where it says the top half is what people think hodling is like. It's a straight line from low price to some high price of the moon and what it's actually like. And there's like these cliffs and, you know, the whole, you know, pits with stakes in them and all sorts of crap to get there. And the fact is, is markets are tend to humble traders. So anyone who gets too confident, too over leveraged, you know, I'm not going to lie. I mean, I look at the fact that perpetual swap funding rates are triple what they were last week. And that's a it's a yellow sign. It's not a red sign,

but it's a yellow sign. I mean, it could stay that way for a few weeks. I look at the fact that the CME futures are trading at premiums double what they were two weeks ago in a basis point level. And as a result, you know, yeah, there's a little bit of froth here. That doesn't mean that you're going to get a dump, but it does mean that a pullback seems somewhat likely unless you keep getting new demand every single day. And that's what people are looking at. Yeah, I can see peak greed. I'm going to go to you, Lucas. I saw you on mute when we were talking about the ETH upgrade, and I'm just going through the comments.

Definitely peak euphoria right now. I haven't seen one comment yet of someone that thinks we will not see or we'll see a dump, or we won't see an all-time high for at least the end of the year, as you mentioned, Sigal. But let's go to Lucas. We'd love to get your thoughts on the upgrade, what that means for Ethereum, L2s, and what that means for competitors like Solano. Yeah, definitely. So thanks for having me.

Lucas, is your mic working? I don't know. Can anyone hear Lucas? Is it a glitch again? Can you guys not hear me? Yeah, we can hear him. Mario, I think your mic's a bit off. I'll drop and come back.

Travis, I'll give you the mic. I'll be back. All right. Lucas, you can go ahead. Yeah, you guys can hear me, right? Yeah. Awesome. So with regards to the Dancun upgrade, that's the largest Ethereum upgrade since the Chappelle upgrade, which enabled withdrawals in Ethereum staking.

This one is more focused on layer 2s, so the main update that it will bring is EIP-4844, also known as protodank sharding. And what that will enable is a massive cost reduction for layer 2s by essentially making data storage a lot more efficient. In short, that's how it's going to work, and it's expected to realize 10x cost reduction for Layer 2s. And so that is expected to bring a large improvement in utility.

So transacting on Ethereum L2s will be significantly cheaper than it is now. It will still be more expensive than in Solana. That being said, a lot of Layer 2s are more liquid and have more activity than Solana, especially Arbitrum in terms of liquidity. So for DeFi applications, for instance, it could be a good enabler to have more retail users participate there in Layer 2s. And it's expected to create competition. Creating a layer two right now is easier than it's ever been. I think we see one pop up

every week or so now. You can do so within a few clicks using Conduit. So I think that's likely to accelerate even further after this. And at the end of the day, since it creates economic activity on top of Ethereum,

it's likely to be a very bullish, long-term catalyst. I don't expect it to materialize right away. It's not like you're going to have 10x the amount of transactions and volume right after the upgrade. But over time, it should bring that mass adoption and utility beyond just holding the asset. It should bring a lot more activity on-chain. So it's quite bullish for the long term.

Yeah, Lucas, you did do an interview with, I can't remember her name. It was Shanggu, I think it was, talking about DeFi Summer 2.0. Maybe give us an update. That's one ecosystem that I have pretty much very little exposure to relative to others. Maybe give an overview on why you bullish De what you expect to see definitely yeah so d5 uh essentially has been undergoing a bit of a resurgence um it took a beating like the whole space in 2022 but the blue chip protocols you know like ave compound uniswap curve they were able to withhold, you know, to sustain all of the issues that FTX and some of the centralized lenders endured. So it actually performed a lot better

and it's been seeing a resurgence. I think there's a case to be made for an on-chain credit boom. It's already begun. You know, the amount of borrows in DeFi is at its highest since May 2022. And I think that's likely to continue to grow. One thing that is often underappreciated by the people who have been long in this space, and it took me a bit to get around it, is points. So points has been, you know, an idea to get retail mostly initially to deposit into a protocol and get exposure to a future airdrop. And with markets that are pricing these points like Pendle and Wales markets, you can now have a good understanding of where the markets are projecting that airdrop to be worth. And that essentially creates the opportunity for people to price those in advance. So for

instance, EigenLayer, the largest points program going on is expected to be about 30 to 40% APY on 9 billion in deposits, which is essentially about 3 billion, 2.7 to 3 billion airdrop, largest in history that's being priced in. And essentially this creates, since you have markets pricing that in, it allows people to bet on that in advance. So we've seen ETH borrows increase, likely because people are borrowing ETH and putting it here. With Athena, we're seeing a similar thing now that they launched Mainnet and their shards.

So I think that demand for leverage will only continue to grow. We're seeing borrow rates increase across the board and I think this is likely to continue, especially if we go beyond all the highs and people start looking for leverage on top of their assets. So yeah, in short, I think it should be a year of acceleration for DeFi and a lot of the on-chain ecosystem. Yeah, I'm just reading here an article. Go ahead, Travis. Yeah, I've got a question that I want to pose to the folks on stage. We've got some TA guys here. We've got different types of ecosystem participants on stage right now.

So Bitcoin's up 34% year to date. ETH is up 41% year to date. Why is ETH outperforming BTC year to date? That's my question. And I'll withhold my answer. I don't want to jump the shark here, but I'm just curious how other people would answer the question that in light of spot bitcoin etfs and many many billions of dollars of inflows into spot bitcoin etfs that have exceeded you know everybody's expectations except you know maybe the absolute most bullish expectations but it's exceeded you know 90 of people's expectations and yet eth ETH is outperforming BTC year to date. Why is that? I'll go ahead with the guess.

It's a great question. I think it has everything to do with the ETF anticipation. You saw the same thing happen with Bitcoin before the ETFs got approved. The anticipation of an ETF drove Bitcoin. If you look at the Bitcoin, the ETH slash Bitcoin chart, you'll see that that took a nosedive while obviously Bitcoin was going up due to the anticipation. Now that the Bitcoin ETF is approved and there's, you know, decent hope for an ETF approval on Ethereum, I think you're seeing the same thing happen and a lot of that money going into Ethereum in that hope and anticipation for that approval. I won't say, you know, if Ethereum is going to yield the same result as Bitcoin once it does finally get approved, because I don't think so.

We can have this discussion another time. But to answer your question, I think it's purely ETF anticipation. I'm going to take the other side of that. Let me go to Vinny, Vinny, Matthew, and then we'll go to you, Matthew, and then we'll go to William. Vinny, go ahead. Yeah, I think it was, Travis, from my side, I think the market front ran the ETF end of last year. And the odds of an Ethereum approval was hinging on the BTC approval first.

So you basically had to cross that threshold before the funds were flowing to Ethereum. So it happened to be, I think, 8th of Jan or whatever, the first week of Jan, where it actually was approved. And then, so the money will now chase off to ETH afterwards because BTC was priced in at the end of last year. I don't hear anybody else does. Can you guys hear me? Yeah, everyone can hear. One speaker could not.

I just removed him. Go ahead, Vinny. Okay, that's fine. Yeah, so Travis, that was my take. It was just literally like a calendar year timing issue, and you had to get the funds had to flow into Bitcoin for the ETF approval threshold first, and then it switched over to ETH. Yeah, I'm going to take the other side of that. I mean, I think the ETF has helped, but look at the chain. The last week, ETH supply is annualizing at a negative 50 basis points. So supply is shrinking at an annualized rate of half a percent a year.

That's versus an average of 20 basis points since the merge. So the deflationary impact has doubled in the last week. We've got a record level of ETH that's either locked in staking pools, in smart contracts, or on layer twos, a record low percentage of ETH on exchange. So there's a lack of liquidity. You've got this restaking narrative, which really reduces the speed to market for infrastructure services while increasing just how attractive it is to stake in general. Return of DeFi 1.0, Uniswap proposing the fee switch, Ethereum back now above 50% market share of layer one blockchain revenues. Launch of Polygon AgLayer brings hopes of unified liquidity for zero-knowledge L2s,

and then Dancun three weeks away. So, you know, the ETF hopes it helps, but there is fundamental momentum on the ETH blockchain. And you can contrast that quite clearly versus Bitcoin, which in the last month, daily transactions down, inscriptions down sharply, transaction fees down. You know, there's been a divergence here in BTC between the speculative activity and the on-chain activity. That has not necessarily been the case in ETH. I agree. Go ahead, William.

Yeah, I just want to say two things. One, one of the reasons that Ethereum might be, the reason why the price has been going up is also the staking ratios. The staking ratios have reached about 25% right now.

That means that's the amount of Ethereum that's being locked up in staking contracts. And that's been going up steadily. So it's not just only the Ethereum ETF speculation. It is also the staking ratios that will also continue to increase over time. I want to say two more things. I think it's a misnomer to say that Solana is competing with Ethereum based on speed or transaction costs. Ethereum has network effects that Solana can only aspire to reach currently. And I'm bullish on both chains. This is not meant to be a ding on Solana.

They are very different. So that's, I wanted to kind of say that. The second thing is somebody said what happens if there is an Ethereum ETF and the effect on price. In my opinion, it might have more of an effect on price than it did, than it does for Bitcoin, because Ethereum has a lot more utility than Bitcoin today. From an end user perspective, from a usage perspective, Ethereum is in many, many, many more apps. So if more Ethereum is going to get locked up in ETFs, in addition to what's

getting locked up in the staking contracts, then there's going to be a lot less Ethereum in the market. And finally, definitely the next upgrade is going to make fees even cheaper than they are in the L2 level, not only at the uh at the native l1 level that's it and travis you haven't given us your answer yeah i mean one of the reasons i i i posed the question was because it seems like there's still very broad disagreement about um whether or not we're going to get spot ETFs or maybe over what time frame. I don't think there's too many people circled up around the May date. I think the over-under is probably the August date, but there's still plenty of folks that think it's not going to happen this year. There's plenty of folks that think it's not going to happen this year. There's plenty of folks that think it's not going to happen under Gary Gensler's watch. So there's still broad disagreement there, which I think if ETH is outperformed BTC year to date with that much disagreement around the spot ETF, if it is the spot ETH ETF that's driving price action,

that would tell me that there's still a lot of meat left on the bone for ETH BTC outperformance. That's kind of my first comment. I think that some of the technical upgrades, I think those do matter some as well too. But the final point that I want to make, which I think is kind of a meta point around this, is that perhaps ETHBTC is outperforming because now is the time that ETHBTC outperforms. like going back to the reflexivity, the memetic reflexivity around these four-year cycles in general. And the fact that it does seem like we're, so far, kind of seems like we're pulling the cycle forward that people have been calling this a left translated cycle. That, you know, 2023 was better performance in 2019. That, you know, at least so far you haven't had the big pre-halving pullback that you've seen. People are legitimately talking about hitting new all-time highs prior to the halving. We've never had that before. If I recall last cycle, the halving happened, I don't know,

price was probably $8,000, $9,000. I don't have a chart in front of me but um you know less than half of prior all-time highs and you didn't get new all-time highs until six months after the having and people are you know and i think people are making a a valid case that you could see new all-time highs prior to the having this cycle so you're having this left translated so if it is this kind of left translated cycle then that means that like now's about the time for BTC to outperform. And that there's this sort of shelling point around that because we've seen it multiple cycles before. So. Vito? Yeah, I mean, it is a point of contention for sure when it comes to Ethereum. I mean, so think about the narrative before the ETF approval.

Okay, there was a split there too in the community. Was it a buy the news, or sorry, buy the rumor, sell the news? You're talking about the Bitcoin. Yeah, yeah, yeah. Yeah, I'll bring it back to the ETH.

So, you know, a lot of people were saying that it was a buy the rumor, sell the news. And you see, as soon as it got approved, we dumped and so on and so forth. But the fact is, look at where we are. Look at the price of Bitcoin. It has, for all intents and purposes, destroyed all previous cycle kind of behavior, as far as I could tell. And I've been looking at this for a while, and I'm a chart guy, and it just does not

at all in any way, shape, or form follow past cycle behavior. And the only reason I can attribute to this is the actual ETFs. I mean, all this onboarding of liquidity um buying up um you know the bitcoin causing that supply shock and with the having coming up that that's only gonna you know get more interesting so i i can't i'm not saying there are no other good things going on for ethereum but if i was an investor and i am and i looked at what happened with Bitcoin. And assuming I say, okay, this should play out the same way. I don't think so. And I have my reasons for it. But let's just go down that line of thought. And I said, okay, it's going to play out the same way. It's almost like a roadmap to what's to come. So buy Ethereum, wait for the approval, and Ethereum is going to move. I mean,

this is what everybody sees. Let me end the show with one last question. I'll ask Matthew. Matthew, do you think the narrative of this bull market being shorter than others, considering that we could reach all-time highs prior to the halving, your thoughts on that possibility? I don't think that necessarily makes the bull market shorter. It just may front load part of the gains. I don't think we've ever had a down year for Bitcoin in the year after the halving.

That's when Bitcoin dominance tends to fall and altcoins tend to outperform. I would have to see something change to say it's going to be an abbreviated bull market. Vinny, that same question to you. You know, I'd handicap that he's probably 80% right, 90% right. There's always an outside chance that it doesn't happen. And so I would say the first major resistance point for me is getting past the 68 to 80K range, which it's never happened before. But if Bitcoin maintains that level, because we also had a double top, if you remember, in 2021, and we've never broken past that range the second time.

Well, the second time we didn't get past it. And now we're going for a third time. I just think there's a 10-20% chance that that is a very, very high level of resistance getting to that magic 100k number. If that happens and we can't break past that resistance, we're going to go down again and retest and it could be some sort of a triple top formation.

Peter's more the technician here. He could probably weigh in, but I'd say there's a 20% chance that something weird like that happens. Peter, same question to you, and then we'll wrap up the show. Okay, question just dealing with – help me define it. I didn't catch exactly what was – Yeah, of course, no problem.

Do you think, considering that we could reach all-time highs prior to the halving and the inflows were seeing from the ETFs, could this bull market be shorter than previous ones? No, I don't believe so. I think if you go by past cycles, again, halving will be pretty much exactly the halfway point between what we had as lows and what we'll have as eventual highs. So, no, I think the bull market will continue to chug along

for really more than a year and a half here. Nice. Cool. On that note, on that positive note, we'll wrap up the show. We'll see everyone again tomorrow. I'm not sure if Scott can join tomorrow. I know Ran is joining. I'm not sure what the topic will be, but otherwise appreciate the panel.

It was a great discussion. Thanks, everyone.