The Wolf Of All Streets - Bitcoin Crash, Altcoin Bloodbath. Will Support Hold? | Crypto Town Hall

Episode Date: June 24, 2024

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Morning, everybody. Just waiting to get everybody up on stage here. A lot of glitches always getting it going. But Mario, I think, his face is here. I think he's filming season two of Killer Whales out on the West Coast, which means that anyone who comes up has carte blanche to say as many negative things about mario as you would like this week um he probably won't hear it and even if he does hear it he will not have the opportunity to respond so i highly encourage uh you to mock him relentlessly ran ran was on season one of um killer whales i'm not sure if he's on season two but but likely that he is too, which means you can also mock him relentlessly if you feel so inclined.

Also means you might be stuck with me a lot more this week. Obviously, I think there's a lot to talk about here. The market is going to be paramount in the conversation. Bitcoin trading down as low as about $60,600, I believe. Honestly, anybody who has been watching price action for the past few months knows that Bitcoin is trading in a range, you could argue between $60,000 and $73,000, $74,000. And of course, we get euphorically bullish when it's near the top of the range and uh depressively bearish at the bottom so you know 60 000 a lot of fear a lot of uh scared people mostly because all coins are also bleeding out but the

reality is still just trading in a range in my humble opinion and getting a bit of a bounce uh now at the moment i think the story behind, at least because we try to force narratives into everything, although I don't buy it, is the Mt. Cox repayment being announced for July. There's 140,000 Bitcoin, Bitcoin Cash will start to go back to predators in July in the form of crypto and of course, some in cash. It will be be a slow trickle i can't imagine it having a meaningful impact on the market i've been hearing about it since i got into crypto in 2016 still waiting uh for it to matter uh but that is kind of the story that some are pointing to as a catalyst i mean zach do you buy the market is moving right now because of that news we were already from 72

to 63 or something before we got that right yeah yeah no this is just a post-hoc rationalization yeah isn't that uh everything in bitcoin especially during a boring summer as a post-hoc rationalization like there's literally just nothing happening i think this is one of the milestones of like owning bitcoin is you go through the phase where you want to attribute everything to a news event that's at that given moment. And you come to the place of, oh, I guess there was just more sellers and buyers. Well, yeah, exactly. I think that that's fair. And this is the classic halving cycle, classic summer for Bitcoin. This is just when things tend to be extremely boring, chopping sideways and kind of floating, floating downwards. Some people pointing to things

happening in macro, but I mean, at this point, regardless of what the macro indicators are saying, I think that we all know that the stock market is near all time highs and continues to perform well. Dwayne, we got you here for talking macro, I think it's good time to let you jump in. Do you have any broad strokes on what you're thinking about the market at this moment i know you don't look at bitcoin perhaps too deeply but uh maybe if you think that bitcoin is reacting in a meaningful way to that hey hello good morning thank you so much for bringing me up here all right so i'm over overall with the market yes the market is in all time highs. And I think often Bitcoin, or at least the common narrative is that Bitcoin does reflect liquidity in the

marketplace. So, I mean, a lot of this liquidation has happened, say, in the last 24 hours here. So, I mean, there's a lot of liquidation volumes here, though, but I don't think it's time necessarily to panic because I think a lot of what's happening here is a reaction to the expectation of great parts. And, you know, when we see certain assets like gold, commodities, et cetera, that have also risen to the occasion over the past six months here. So with Bitcoin investors, I think they should take more of a long term view in what's occurring here. Also, with the onset of ETS, Ethereum ETS oncoming, Bitcoin is becoming more of a key financial asset. And once that gets into 401ks and you have some more of the institutional investors adopting Bitcoin and other coins as well. And I think that on a long-term basis, at least, the future looks bright. So I would advise and often advise my colleagues not to freak out at any sort of volatility

with the price, at least in the short term. Yeah. And I mean, the Bitcoin volatility is still relatively decent, although low, but stock volatility is approaching all-, although low, but stock volatility is approaching all time flows here, right? So there's not much volatility to just speak up in general. Aladio, go ahead. Aladio Morales Again, that I've always been taught to look at things in patterns. And I, you know, I rely on memory for a lot

of the things but I've been I've been investing for over a quarter of a century in the business as a professional. And my correlations to me are pretty obvious. And I go back to the same thing. 2021, crypto started to break down before the market started to break down when Fed liquidity started to go down. It has become a leading indicator for risk and semis are would be a leading have historically been a leading indicator for the nasdaq as a as a as and the markets uh and and if you look at the correlation to the breakdown semis hit an inflection point the smh hit i believe an all-time intraday high on march the same thing happened happened to crypto around that time. I think we went all the way up to 72 something. It's pretty obvious that a lot of the moves correlated with

the idea that the Fed was getting to an end a year ago in Jackson Hole and that the market made a decision that the next move was to add liquidity to the market and lower rates. That hasn't happened. And so that trade is just starting to fizzle out in small increments. If we get to the point where we break, and again, I'm not a crypto expert, but if we break the 200-day moving average, which is what most algos are designed to not allow to happen, because once that happens, it becomes the abyss for the market. We'll have a larger correction. Just so people know, that's around $57,000 on the daily right now for the $200 simple moving average.

And that's something to look at. And for whatever reason, investors love round numbers. $60,000 is a round number. They just do. They flock. The same thing happens with some of the leaders. They love round number. They just do. They flock. The same thing happens with some of the leaders. They love round numbers. So from a psychological standpoint, 60,000 is important. And look, corrections are corrections. We're down, I believe, maybe a little more than 16% already

from the high that we hit in March, because the high was in crypto all the way back, I believe, in March or April. And we're just seeing a correction and it's okay. It happens. Guess what? NVIDIA is also correcting now. When was the last time you saw NVIDIA go down almost every day for three straight days? Too much money went into the same areas because there was a bet that Powell would give in. And unfortunately, whatever the reasons are, data dependency, he's not lowering rates and hasn't lowered rates.

And now we're only down to one rate cut possibly for the year. So I think the correlation between crypto and risk is pretty obvious going back to November. It breaks down before and it's a canary in the coal mine. And a correction is okay. Maybe. But Bitcoin topped in March, right, around 74,000. So we're now three months removed from that. And I think people would define stock risk assets as what NVIDIA is doing.

And Bitcoin is trading 15 000 uh you know kind of below that high or 13 or 14 000 and nvidia has just made even you can debate whether topped or local top or whatever it is but there's no correlation there but let's be honest about what something shenanigans the the split syndrome okay the split syndrome every every company every company announced their splits in the last two or three months. To me, that's indicative of a short-term market top anyways. These stocks

have gone up. Are we going to ignore that Broadcom went from 500 to 1,800? Are we going to ignore that NVIDIA lost 75% of its value in 2022, was oversold? We got to move in NVIDIA from 100 to where we are today now, whatever it is, we all split. Yeah, 1200. And and and not Chipotle is going to. So a lot of risk

assets. Look, the difference between crypto, there's this guy that I've heard he uses the hashtag or the name tiger. I don't know if a lot of you, he said something which to me hit to heart with crypto. Crypto is more authentic. It does rely on capital flows, but you don't have the shenanigans where CEOs could take the hit on a guidance call, on a call, on an earnings report and say, well, the earnings on BTC, like Mark Zuckerberg did with Meta, well, we're going to have to spend a lot more on AI. And he took the hit. That was a conscious, conscious hit because the stock had huge moves upwards. And we were getting towards the end of a cycle. And we're not getting those rate hikes. I mean, those rate cuts, we're not getting those rate cuts that all risk assets want.

Yeah, I've long said that people disagree, but that Bitcoin is the last free market because of those exact many of the reasons that you've just explained. And people then point back and say, but it's manipulated. There's huge whales moving the market well that that's literally part of a free market but there's no uh there's no Fed to step in and provide a floor there's no stimulus there's no like you said a CEO to decide there's just trading free market join go ahead oh uh thanks yeah I was just going to add to that uh you know something that may be more concerning I I agree with much of Eladio's comments here and some of the comments thus far. But I would say one more thing that's more alarming to me, at least in my view, is the underperformance of certain sectors like utilities, consumer discretionary, consumer staples, etc. over the last year versus the S&P 500. So when these assets break down and when Nvidia and that sector,

the settings breaks down, that's much more concerning because Bitcoin obviously is an alternative asset for people to invest in. And like you were saying, it is more relatively honest in the sense that you have this limited market here with a finite amount of Bitcoin. So I think it's, at least in the long term, it's definitely a better alternative investment that's not as subject to some manipulation that we're seeing here. I guess going to some of the more crypto native folk here is let's talk about the fact that Bitcoin did just bounce just above $60,000. We're at these range lows. A lot of people calling for much, much lower prices, 50s and 40s.

Ali, do you think, how are you looking at the market at this point? Not sure if you heard me. So Fales, go ahead. Yeah, I was just going to jump in and touch on a point you made at the start of the discussion, which is that, yeah, sentiment is such a poor indicator of where we actually are in the markets and what price is likely to do. And you hit the nail on the head there. I mean, it looks bad now, but fundamentally, price is just ranging. And you mentioned that BTC is in this range from about 60K to just over 70K. And that's still true today. That was true four weeks ago when we were trading at, you know, 71,000, 72,000.

And it's true today when we're trading at 61,000 60,000 right nothing has changed about that range we're still trading in a range and the fundamental principles still apply at range though you're expecting some kind of relief some kind of bounce arrange how you expect some kind of pullback and that's just the way that ranges work in in crypto right you don't need to be a a ta expert to understand the reasoning behind that, right? And the interesting thing is that it's the same playbook every time. CT, Twitter, they just lose their minds when price goes to the highs of the range. They say they're calling for 100K.

They're saying, you know, the bull market is back. We're all going to make it. And when price goes to the lows, everyone's posting about, you know, hope you guys were taking profits on the way up. And they're posting risk management threads and you get motivational quotes all over your timeline. And guys are getting wrecked and you're talking about liquidation emails. But I mean, nothing has changed. Right. And I think that's it's something that if there are any newer listeners on this call, I think that's something you really need to drill into your head. That sentiment is often the worst indicator of what the market is actually doing and what it's likely to do. I'm not saying you counter-traded either. The best counter-trade, yeah. Yeah, I'm not even saying that.

But I mean, just block out the noise. And it's something that everyone here will be familiar with, you know, people talking about blocking out the noise and focusing on your own analysis. Sorry, go on, Scott. I love the idea that we've kind of joked about in the past. And something I've always said is if you're relatively new here, first of all, you shouldn't be training. But if you are, you should just counter trade yourself.

Forget counter trading sentiment because you're inevitably going to be a part of that block and if you think you should uh be shorting and support you should probably getting long and if you think that uh we're at 74 going straight to 100 you should probably be sure um exactly yeah go ahead yeah i mean i think that you were asking me whether 50 is possible. I mean, I guess that's possible. Your mic's a little broken, but I was asking you for your general market thoughts and analysis here. Yeah, man, you got to take your mic. I'm sorry.

Sorry, I'm going to go ahead and you can bring it down, bring you back up if there's an issue there. Go ahead, Jed, and then Matt. Hey, guys. Yeah, I'd say in the short to medium term, I'd say we're going to chop. I think that's kind of a bearish. Yeah, sentiment is quite low. It's very PVP right now. Different communities are attacking each other.

We are not seeing a lot of new money coming into the system. I'd say even these new token generation events are dilutive to the entire industry market cap because there's

not new money coming in to buy them. We had Layer Zero last week. We had ZK Sync as well. This week we have Blast. So, you know, Blast, I think Blast estimated FDV at launch is going to be around, you know, two people. Some people are saying two, some people are saying five. So let's call it four billion FDV.

And then, you know, the flow, I'm not sure what the flow is. It's probably 10%. So that's $400 million of diluted pressure on the entire industry. Cause consumers are, have, have wised up and they're not buying these, these, these these new launches.

So, so yeah, I would say like I, in terms of the macro, yeah. Like I'm not sure we have a big catalyst, really. Well, obviously, we have the Ethereum ETF, which I could talk about. But until really the election or any kind of potential, maybe a rate cut in October, maybe.

The 60% chance, I think, for September. But we all know the predictive markets and rate cuts have been laughable for over a year and a half. So I don't think we can look at those at all. Just for people that don't understand what Jed was talking about, I mean, the most basic level, he's saying that we have sort of all these unlocks and new launches and tokens coming onto the market. We all know how many meme coins and if there's no new demand, you're just effectively adding supply to the entire market and less specific things people can focus on. And so you just have more and more and more and more tokens and nobody has them now to buy them.

So the premise there being they're going to be a hell of a lot of new money and interest to see most of these things succeed. Just wanted to give this sort of. Scott, this is the tale of two cities that we've been talking about for months now. The difference between the majors and arguably the meme coins on one hand and then the VC tokens. And it's amazing how bearish everything is while Bitcoin is still at like $61,000, $62,000, which to me feels like a really high number. Whereas it might be a much less rosier picture for the VC coins, right?

I think it's totally right. They're flooding the market. And all points. I think that's going to continue. And all points in general. market. And all points in general. Yeah. And all points in general. And we need a hell of a lot of new money. So, you know, my sort of base case that I've been making is that we had this Bitcoin spot ETF move, fundamental reason for us to basically preempt the entire cycle, right? If we didn't have the

Bitcoin spot ETF, my belief is that we'd be ranging at 40,000 instead of 60 to 74, right? If we didn't have the Bitcoin spot ETF, my belief is that we'd be ranging at 40,000 instead of 60 to 74, right? And if we were doing that right now, everybody would be like, great, we were at 18, 17, 16, this still looks good, right? But we would not have hit a new all-time high, although Dave will tell you that we didn't hit an all-time high, inflation adjusted. But either way, we wouldn't have gotten above 70,000 for Bitcoin. And now we're ranging much higher. But people forget that none of that accrued or can accrue or had anything to do with altcoins. Right. So people who buy Bitcoin spot ETF and put it in their IRA, they can't get bored and trickle down into altcoins from there. Right. So we're exactly

where we would be in this altcoin cycle, but people are very depressed effectively because they thought we had preempted it or that things would be much better at that point, in my humble opinion. So Matthew, go ahead. Yeah, hi there. I think sentiment is a big driver.

And at the moment, we're right in the middle. So it's neutral at the moment, right in the center, neither fear nor greed. So I think that the correction is very much central at the moment. There's potential lower to go. So it was only beginning of beginning of May that we had 56,000 on Bitcoin. And even if we were to match that level, obviously, we're, you know, there's a bit further to go. And if the first leg down were to be equal by this next leg down now, that would take us to

54,800. So I still think, you know, when I said sentiment, I also think obviously, sentiment is driven by those macroeconomics. So I think that PCE on Friday is going to be a big driver. And if we miss, I think the expectations are 2.6. And I heard about Truflation, I think was on the show the other night, saying that inflation is really very, very close to that 2% level. So I think the Fed is much closer than people are thinking right now towards the first rate cut. And we still may see two rate cuts because I think things could change very, very quickly once we see that first rate cut. Obviously, all this information that we're getting is very much lagging. And so I do think that we potentially have some more downside to go.

But this is just corrective from the top, from that high that we had. I think it was mid-March. We had 73 and odd 73 74 000 on bitcoin this is still just a sideways correction pretty much sideways in context of the whole price movement and we should push to new all-time highs once we visit those lows so whether we're at the low now i think probably we've got a bit lower to go but um if we get some good news on Friday with lower inflation, lower PC, which is the Fed's preferred measure, of course, then I think we'll very quickly move to new all-time highs on Bitcoin and the rest of the alts will follow. So I think the alts will have been left behind for the time being. If Bitcoin were to turn to the upside, I think the market will change very, very quickly.

William? Yeah, hi. So what I'm seeing right now is that, just as a reminder, the sentiment can change on a dime in the crypto markets. It does look right now like this was a short bull run, almost like a round trip to previous levels. And the summer doldrums have arrived a bit early because liquidity is going to be not your friend in the summer. So we might meander. Now, having said that, I think we need

to fix the narratives, the narrative mindshare, the mindshare around the narratives of Bitcoin, crypto and so on. There's still too much air being sucked from the room around anything related to headwinds, whether it's from the regulators or the bad actors, people pushing false narratives, hype narratives. And what I'm seeing is that the situation right now is that retail has been replaced by casino-seeking users, which we call sometimes DJs, users who want to use crypto to gamble, to speculate and to trade quickly because they see the potential of short term wins around the speculation.

So that's kind of part of the negative. William, would you say that retail has been replaced by those people? I would argue that those are the people who literally have always been here. And that's the core audience that trades and speculates on bitcoin that's the washing machine of people who chase these buckets of narratives which is why we see ai go up for a month and then way down and then you know rwa and then meme coins and then vc coins i mean those people have been here since 2016. yeah but i mean the this mentality has is a bit more prevalent right now because before

we used to have I think retail that were users that were a bit more innocent and and really believed in in in seeing returns instead of seeing the casino mentality of gamification. Gamification is the short-term kind of thing. You cannot gamify things forever and ever and ever. It's kind of cute for a bit. Yeah, you get attracted. You do a couple of things. But then gamification is not a business model. It is something that is a spark.

It could be something to stir things up, but it's not the end goal. There has to be a business model behind that. I'll just end by saying the positive news is because I am more involved in the trenches with a lot of entrepreneurs. I see a lot of builders that are building better use cases and these tend to be more on the quiet side and They don't shout on the roofs necessarily, but all of this work is going to unravel after the summer into the fall So I cannot Yeah, I was just going to touch on that point about native capital and new capital coming into the space.

I mean, Google Analytics for search terms like crypto and Bitcoin are at the same levels now as they were in the expectation that at some point, right, with BTC pushing to new highs, at some point, that money was going to rotate. And we were going to see, you know, quote unquote, alt season where things would go up like they did in 2021. Meanwhile, what we've actually gotten is total three is still like 50% off the highs or something. BTC did put in a new highs, but a vast majority of alts didn't get back to the highs that they were at. And I think... Not only not highs, but not only not highs, some of them are still literally at the same price. Yeah, exactly. And it's indicative, I think, of a lack of new capital coming into the space. And it's not surprising when you think about a lot of the guys who got involved in crypto in 2021, what have they faced? Or what did they face, let's say, between then and now, like Luna, FTX, Three Hours Capital, Celsius, Voyager, you know, Tether FUD, Binance FUD, USDC FUD, the SEC coming for their coins, you know, and that kind of thing. And like majority of all coins is doing like, you know, 90% down from the highs. That kind of thing turns people off crypto

forever. Like they don't come back. And the guys that do come back, what are they coming back to? They're coming back to celebrity shills, rugs, no real influx of new capital. I just think it's symptomatic of something broader, which is that there is a lack of new capital coming into the space. And I don't think, I think the native capital is thinned. I think the new capital coming into the space isn't there. And I think it's going to take longer to change that paradigm than people think i agree i just think that there is new capital coming to the space but only institutional or capital coming into bitcoin spot etfs exactly yeah yeah it's just not coming into the rest of the space which i know that's what you're saying you're just you know clarity for everyone else i'll leave that give it another shot yeah ali go ahead let's see if this time it works okay so uh yeah i mean but you know today i mean if we're just really looking to retail retail always right late in the cycle right when basically bitcoin is

already almost about to top is when you start like seeing a spike and new addresses joining the network and all this stuff right that's when from the well the on-chain metrics turn positive and then you start like seeing a little bit more excitement as well in the google search trends and everything but i think that we're we're literally in the part of the cycle where we have always been you know right after they have it of course right the right? The spike in price action, I think that happened a little bit earlier than in previous cycles. But I don't expect retail to come in until, you know,

to be honest with you, if everything plays out like previous cycles, right? We could be looking at October 2025. So yeah, we could be looking at retail starting entering the market, maybe like January, February. At least that's what I'm expecting. But when we talk about the current price action and what we're seeing right now, right,

because I believe I heard like some people talking about the 200-day moving average. The 200-day moving average in traditional markets tends to signal signal a major area of support. But of course, those areas where everybody's paying attention to, they will always be broken. Broken or front-run. Exactly. The last time we saw that was basically in August 2023, when Bitcoin basically dropped from around 29 000 to 26 000 it broke below the the 200 day moving average and everybody was panicking so we consolidated in there for a little while and then like jump back up right um so i think that kind of like the same thing is

happening right now right and for summer right we tend to have like these consolidations always consolidating during summer over the past past three years even during the big market were consolidating in summer before we had that final push right to the downside when the ftx and luna and the whole thing collapsed right but that we're seeing kind of like the same thing right now i believe that we're in a critical area based on the indicator that i like at least the sequential indicator uh we'll get like a buy signal tomorrow, which could then potentially validate with all the other fundamental news you guys were talking about coming in Friday or whatever. I don't pay attention to those necessarily.

I like to look at the charts mostly. And also, this is the first time we're seeing the RSI in oversold territory since August last year, right? So I think it's actually a time to start looking into, you know, positioning yourself for a potential rebound. Yeah, of course, like Bitcoin could drop from right now up to $57,000 again to retest that previous low, you know, from May. But I think it's definitely a good time to start like DCA.

Yeah, Eladio, go ahead. Yeah, I mean, let's be honest here what was the low of bitcoin uh before it started rallying last year what was the actual low 15 15 something all right come on yeah we've gone up a long way we really have you know and and and to not think that there's going to be some form of Sir Isaac Newton is naive after the mammoth, mammoth move that we saw. Again, it did coincide with the move that we saw in tech. It preceded it probably by a bit. And again, I think it's about liquidity. But Dwayne pointed out something very interesting. Historically, the most interest rate sensitive sectors would be, believe it or not, biotechs are an incredibly interest rate sensitive sector historically. And so are utilities. And historically, so are industrials. And the reason I point that out is I still think it is a liquidity problem.

But here's one point that nobody's talked about. We're not going to get an ETF. We might get an ETF that decides to invest in tons of meme coins that are lower quality junk. Let's call it that for now. But we're really only getting uh gonna get these uh etfs for bitcoin and ethereum first and we may add i don't know i don't know what xrp but xrp has been dead like a doornail even in spite of the sec or litcoin or or or solana would probably my next best i gotta say it's like going man We got to get you saying Litecoin. Litecoin. All right. I'm not a crypto guy.

Sorry. I apologize. It is pretty lit, but we got to start calling it Litecoin. Okay. Litecoin. Thank you. But here's the point I'm trying to make. In the same way that we have a market that is a scam, the S&P 500 is no longer a diversified

index. Half of the weighting of the whole S&P is in a sector, in technology. That's a fact. And we had to move Tesla and Amazon to the discretionary part. And we had to move Google and Meta because they were getting too big to the XLC part of the S&P and created an actual index. The point I'm trying to make is money is becoming more passive, more passive on the stock side, where over 50% of all the flows are passive. And by default, if you have a thrift savings plan or a 401k and you put a dollar into the S&P 500, half of that dollar is basically going into

technology, whether you like it or not now, because these indices have been hijacked by a few names. Well, in the same way, won't the ETF creation of Bitcoin and Ethereum cause the same type of problem where you're just going to have two heavyweights that assimilate all the flows? And before you know it, you're creating the same problem. You're creating an overcon over concentration of passive flows into something that uh that in my opinion was created for the purpose of being a fiat currency initially that was the idea that you could that it would be a currency so so so the point i'm trying to make here is we're going to have a correction until we get that rate hike and I agree with whoever said that sentiment can change on a dime. Boom.

But if we break below 60,000, we're going to go lower, probably. And we'll probably hit that support level that somebody was talking about, a 57,000. 57 to 58. Go ahead, Dave. Sorry, I was mid-typing something. I mean, I think there's a couple things. I agree with a lot of what Eladia was just-typing something. I mean, I think there's a couple of things. I agree with a lot of what Aladdy was just saying, most actually. I think that the concentration risk is real, but the bigger number, and Mike McGlone was

pointing out this morning, is that we are way extended in terms of market cap vis-a-vis GDP, to the point where he said it was 2 now as opposed to... It was 1.3. Yeah, I think he said 1.3 in the previous cycle high, and now we're at 2. So valuations relative to the actual economy are literally insane, and that is definitely a risk. There's no question about it.

At the same time, those numbers don't account for the famous on this space, money printer go brr, i.e., you know, we have thrown an enormous amount of money into the system. And as long as the federal government can use to run massive deficits, that will actually likely accelerate. So it's interesting cross-currents. And just you need to put that in perspective. You know, as for, you know, the trading range and what's going on with Bitcoin, I mean, first year economics, supply demand curves, we literally said half the world's investable assets are in the United States. And the mainstream of that, the vast majority of it was not able to buy Bitcoin. And now it is.

So what you saw was a shift up in the curve. That doesn't change. That does not change the likely volatility, the likely path. It just shifted it up. So Scott's point that we would probably be in the 30s or 40s instead of in the 60s for a trading range per ETF. I'm not sure that it isn't low, that it isn't lower, but I think it's 25 to 30, maybe. Yeah. Yeah. But the point is that people, one of the pieces of news that came out last week, which I find amazing that no one's talking about, because to me, it's a big deal,

is the thought that Michael Dell was entertaining, putting Bitcoin on his treasury. Now, we know that over 2000 CFOs met with Michael Saylor before the accounting rules changed. And we were talking about this on this space in January, that the new FASB accounting rules mean effectively that if you're a corporate treasurer and you want to put Bitcoin in your balance sheet, you're no longer punished for doing so. Companies that have done so have done very well in their stock price. And let's face it, corporate treasurers and CEOs, they care more, especially in public companies, care more about their stock price than almost anything, both because of stock-based compensation, also because that's how they're measured. And so that's kind of a big deal. But it's playing out very similar to the last time that a big mucky mmucky, it was Paul Tudor Jones, where he came out with the fastest horse comment.

That was back when Bitcoin was trading between 7,000 and 10,000. And it basically stayed in that range for many, many months until the rally that happened later. So my working thesis, and I know yours too, Scott, is that we're going to see a lot of sideways chop in this range throughout the summer. And then there are some interesting forces that will happen into the fall, and we'll see what happens then. I don't think this changes any of that.

And, you know, the last thing, I don't know if you talked about Mt. Cox on this space before I joined. Yeah, we started that kind of at the beginning, but you can go ahead and give a take if you'd like. My take is it will be the ultimate buy the news event. You know, if it's sell the ultimate uh buy the news event you know if it's sell the rumor buy the news uh i think that will be what will happen because yeah there will be some selling it will be slow because most of the people who got their had bitcoin on mount cox are og types who are more hodler than they are hot money types doesn't mean they won't sell some to fund or buy or do other things but that's actually a fair amount of new money if

you think about it coming into the entire crypto ecosystem that people a lot of them had just written it off so you know don't be surprised if that doesn't fuel an off season at some point uh later in the cycle jed hey yeah i think something that we haven't really touched upon that's, I think, extremely bullish for the industry is how prominent this issue has become in the political arena. I mean, I remember last cycle, the fact like I think Donald Trump, when he was, or shortly before last cycle, Donald Trump one time mentioned Bitcoin in a tweet that he didn't like it. And it was like the biggest deal ever. Like, oh my God, we made it. Like, we're on the main stage. And now we have both presidential candidates talking about this stuff

publicly, obviously Trump coming out and really supporting it and Republicans and it becoming like a major political flashpoint. We also have one of the biggest packs, super packs, the biggest super pack in the country. And it's becoming, it's truly a political issue with the 50 million holders of crypto in the US. So like, we are on the main stage. And I think people forget that, like where, like where we were. Um, and the fact that it's, we have Biden kind of coming around and realizing that the, the Warren S kind of view of it is, is not popular and it's gonna lose votes. I think is, is also really, really bullish for the industry. So, so yeah,

I think, I think, um, we need to just remember that where we were and where, where we are now is very different. And, and that also even goes with the price. We've talked about it a few times. We're at 15K, 15,500 or whatever, two years ago, two and a half years ago. And now we're at 60. We have the ETF.

We have approval for the Ethereum ETF. We have all these. It's basically a flashpoint issue. And so I do think that on the positive side that it is it is in the main arena it's not just some side side little industry like it used to be yeah makes sense anybody have any theories as to why we've seen this sell off outside the ranging but who the actual sellers are i I can float one, obviously, that's been widely reported to miners. No surprise there. But Bitcoin miners, I'm reading from into the block,

have sold more than $30,000, about $2 billion worth, $30,000 Bitcoin since June, the fastest in more than a year. It's possible the recent halving has led to a decline in profits, triggering the sell-off. We very often see that in these times. But there was also, I don't have it in front of me, but a report that quite a few Bitcoin whales who had not sold in years had sold a few billion worth of Bitcoin up here, likely taking advantage of these higher prices. Ali, go ahead. Yeah, that's right. That's exactly what I was gonna say. I

think that miners have been contributing the most to this set of the waves recently. I feel that one of the reasons is that it hasn't been profitable for them to currently mine Bitcoin at the current prices. Don't quote me on this, but I believe that is what I was looking at the other day. The current average price to mine a Bitcoin is around $80,000, you know. So it has not been that profitable yet. I also saw a significant spike in whales realizing profit. I mean, this occurred basically on June 7th before the correction started. Yeah.

And that has definitely contributed a lot. But yeah, I think it's part of cyclical, right? I mean, you tend to see if you're packing in time and you see what happens after the hug, I mean, you tend to see these patterns again. So I'm not that worried about it. I think that I will be a little bit worried if we actually lose $57,000

because then we're probably going to go to $50,000. We lose $50,000, then we're going to go to $37,000. But until we're not there, I think I'm still bullish. Yeah. I think $37,000 would shock a few people around here. I'm looking actually, I was trying to do some quick research on the whales selling. So you were correct that it happened as you and I both said, we'd see the sell off. But actually, since June 17, Bitfinex whales have increased their long positions by

about 2,580 Bitcoin, which has wiped out the previous reduction. So I don't know how that updates in the last week, how much of that is today in the last seven days, but it seems they re-added to those positions after it dropped, probably just taking advantage of a trading opportunity there. I mean, Dave, looking at coin routes, do you see any of that data? I'm sorry, Scott. I literally toned out for a second. What data? You're good. And that's actually scientifically proven to happen every

time I speak for more than 23 seconds. I was talking about on whales adding or reducing their positions, adding to or reducing their positions. Yeah, everything we do is off the public market data from the exchanges. So we see the flows, we see the candles, we see the disruptions between the seven different major Bitcoin asset types, you know, from, you know, tether based to dollar based to perpetuals to inverse perpetuals to futures. And, you know, we it really didn't get crazy, which means that if whales sold, they didn't sell horribly stupidly, which they often do by, you know, sometimes they've just dumped

stuff. So we didn't really see huge amounts of market disruption beyond what you would expect in a 2000 some odd dollar, you know, fairly nasty red candle. So the answer is no. It's not obvious to us anyway, but we don't look at the on-chain data as part of what we're doing. I know quite of other people, quite a few others do. That makes a lot of sense. Robbie, I totally just realized you were here and we haven't spoken at all. Jed, obviously, as well. So just to pivot sort of as we come into the back part of the show here, with all of this happening, I can say that anecdotally, I've noticed that a lot of projects

are either delaying launches or delaying raises. Now there's this sort of fear of launching into the market for all the reasons that people have said before. Are you guys still seeing a ton of deal flow? Are you seeing valuations change? It seems like we had reached a fever pitch, not coincidentally, right when the market peaked, right? In March, it was like 100 of these things a day, people trying to launch everything. Now, it's kind of a trickle. So I think I wouldn't call it a trickle. I think things are still going apace, but we are seeing people questioning a lot of things. I think people are not just going in with an assumption that getting a billion dollar FDV is going to be easy by any stretch. I think also one of the places that we're seeing some of that pushback is with exchanges,

centralized exchanges being a little bit more choosy and rethinking their strategies of what kind of stuff they're thinking about listing. As we saw, you know, that note from Binance talking about thinking about things with lower FDVs and a little bit more retail oriented. I think if anything, the thing that's interesting to look at if people are thinking about buying stuff is to take a look at the NFT market because the NFT market this month has been just, you know, everything is 30% plus down across the board. So frankly, if you believe that NFTs are a thing, then I think it might be an interesting opportunity.

I love that. That 30% down across the board from the recent slight pump from 95% down across the board, right? That would be it. Yeah. I mean, I tend to agree. If there's blue chips that you can pick up and you actually believe in it, I mean, you don't get a more depressed market than that. I mean, do you foresee another cycle coming for those when we finally get that new retail? I mean, I do. I think that's a 2025 thing. I think they go nuts again. A hundred percent, because for especially for as you called them all the blue chips.

I mean, if you're holding Bored Apes or Prudgy Penguins or Azuki's or things like that, and you're still holding them now, you're not going anywhere. You're part of the core community. And it may not be a lot of people, but you're talking about, you know, a few hundred thousand hardcore community members amongst the top five projects. And so I think that those are always interesting. And it's an opportunity for people who've been on the sidelines to think about joining a community because maybe it's just been out of reach from a price point. Makes perfect sense. Is there anything that you're seeing right now that's particularly interesting, regardless of, I guess, the prices and where we are in the cycle? Not really. Honestly, I think this also reflects the fact

that I live in, I live in Europe, because people are already thinking about summer holidays. So they're like, well, it's kind of slowing down. Maybe we'll just, you know, jump back in, in, in late, late August, early September. Jed, how about you? Are you seeing anything interesting here? Yeah, I think valuations vc typically lag the market um i think it typically takes about a quarter to see valuations um prior valuations come up or down um

so we're still seeing pretty expensive stuff out there um i think it's maybe just starting to break a little bit um on the way down but uh it's still it's still quite quite expensive um i think the i mean frankly the the model of of these kind of high valuation and like hoping that you get a multiple on paper and lockups all that good stuff. It seems like it's starting to kind of break here. And I think there's only really two ways to make it fixed. And that's one, obviously, the valuations have to come down. I think as a VC, if you're paying $500 million FDV,

a billion dollar FDV for these major projects, even $100 million FDV, billion dollar FDV for these major projects, even 100 million FDV, 150 million, it's going to be hard to return capital to your LPs. So I think it's really, really important to stay very, very strategic and very, very disciplined, even in times of bubbly markets. I'm not going to name the project, but the very typical thing that we constantly see and it's quite frustrating is you have a project that launched last full cycle, raised at $75 million, $80 million valuation with just a slide deck, and now they're burning their cash. They're almost out of money um and now it's time

to raise around and nobody wants to do a down round so like it's like oh we pivoted to decentralized ai or we we pivoted to whatever and you know guess what you have the same valuation as as uh as last round and how lucky are you and it's like no like we don't we don't want to pay that. The reality is things need to come down. So that's how we look at that. Or, I mean, another answer to this problem is having true businesses that have revenue and ROI and that kind of stuff. So while we do focus, we obviously do most of our deals are token deals. We're not opposed to businesses that have revenue and that have maybe equity.

And we're a 10-year fund. So I think a lot of funds out there might have shorter kind of fund lives and stuff. So I think that's kind of an advantage as well. But that's what we're seeing out there right now. I would say over across projects and VCs over the last couple of months, the averages I've been seeing are something like 40 to 60 FDV for seed stage and then like 80 to 150 for series A.

And where does that compare to six months to 12 months? I would say like my guess would be like higher on the seed and maybe lower on the series A I think people have less of a stomach for big valuations but early rounds are maybe more competitive because people don't want to do the later rounds as much

that makes a lot of sense alright guys well I think we've covered it basically for today appreciate everybody on the panel. As always, I'm very disappointed none of you mocked Mario or Ran, given the opportunity. They're not even here to defend themselves. You should take them while they're down. I highly recommend it.

It's my favorite activity on WhatsApp. But that's all we got for today. See you guys tomorrow, 10, 15 a.m. Eastern Standard Time. Later. Thanks, guys.