The Wolf Of All Streets - Bitcoin Gamification! Higher for Longer!

Episode Date: February 18, 2025

Jeff Park, Head of Alpha Strategies at Bitwise, joins Andrew Parish and Tillman Holloway from Arch Public to discuss the latest in crypto.  Unleash algorithmic trading with Arch Public: https://archpublic.com/  Andrew Parish: https://twitter.com/AP_Abacus  Tillman Holloway: https://twitter.com/texasol61  Jeff Park: https://x.com/dgt10011 🔥 𝗟𝗕𝗔𝗡𝗞 𝗘𝗫𝗖𝗛𝗔𝗡𝗚𝗘 - 𝗡𝗢 𝗞𝗬𝗖 𝗥𝗘𝗤𝗨𝗜𝗥𝗘𝗗! 𝗖𝗟𝗔𝗜𝗠 𝗨𝗣 𝗧𝗢 𝟱𝟬% 𝗧𝗥𝗔𝗗𝗜𝗡𝗚 𝗕𝗢𝗡𝗨𝗦! Join today & get rewarded! Start trading to claim up to 50% in trading bonuses!! 👉https://www.lbank.com/activity/ScottMelker-Cashback?icode=4M3HD  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEKDAY! 👉https://thewolfden.substack.com/   ►► Arch Public Unleash algorithmic trading. Discover how algorithms used by hedge-funds are now accessible to traders looking for unparalleled insights and opportunities!  👉https://archpublic.com/  ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. Use code '10OFF' for a 10% discount. 👉https://tradingalpha.io/?via=scottmelker  Follow Scott Melker: Twitter: https://x.com/scottmelker Web: https://www.thewolfofallstreets.com/ Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Investments The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor. Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

Let's go. Let's go. Hey, everybody. Welcome to Tuesday in the Wolf of Wall Street show. It has been determined that Scott is is being held hostage uh by his wife uh he's you know all the thing down in the basement he's tied up um i told him to blink twice if he was in danger he only blinked once so i think it's a you know i don't know what's going on there but he's being held hostage as we speak so he won't be with us today um but we do have

jeff uh park from Bitwise, Timon Holloway from Archpublic, myself from Archpublic. And we are going to talk Bitcoin gamification. There's way more that's gone on with Bitcoin than people realize over the past six to nine months. We're going to unpack it all. On the heels of absurdity in the meme coin market, people don't realize that there's opportunity that's just spot Bitcoin price associated with Bitcoin. So that's what we're going to talk about today. So let's get into it. Jeff, thanks for being on. You've been at the forefront of this gamification of markets overall and gamification associated with crypto and bitcoin um if you can talk about where your head's at right now you've put out a

couple of i just call them white papers um on twitter where you've talked about micro strategies preferred you've talked about bitcoin options um let's get into it a little bit. And what are your thoughts currently as it relates to the opportunity with Bitcoin gamification? Sure. Happy to do that, Andrew. And I do hope, Scott, as well. And being held hostage by your wife is a better outcome than held hostage in different fashions. And so I'm going to hope for the best. I'd argue it's better than being on this show. So fair enough. Fair enough. Yeah, it's been a crazy week with the meme coin mania.

And of course, all the things associated with it. But I think as you've highlighted, Andrew, this is a secular trend. I think that questions about legality and morality aside, taking a step back, just observing what is happening, what has been happening for the last 10 plus years. There are a couple trends that are converging. One is retail investors are becoming more savvy and they're interested in DIY economy of financial advisory. So they want to access tools to invest for themselves. They don't want to be intermediated by financial advisors the way that perhaps our parents used to rely on those services to think they were bringing value. Young people today, they don't think that's valuable.

They want to do it themselves. That's number one. The other thing is there has been gamification that has been blessed by regulators in the market over the past 10 plus years. So when you look at these products that are coming to market that are essentially like buying Nancy Pelosi's baskets versus, you know, whatever the Republican Party counterpart is as an ETF wrapper. I mean, that's not financial advice, right? That's actually just indexing somebody to make a bet on a gamified version of a world they believe in or resist. And so like, even that this is not even a crypto subject. This is actually just what is happening in the market. And is that in itself not a meme right this Nancy Pelosi ETF and what does that financialization even mean so and I share that context because sometimes I think us in the crypto industry we tend to be really hard on ourselves in wanting to do the virtuous thing the right thing uh and I believe there are a lot of great people aspiring for this outcome, myself included, and you and Tillman. But the reality is, it's not a crypto story. It's not a crypto problem. This is actually a secular

trend. Gamification of markets is real. Zero-day option expiries are now accounting for more daily traded volume for the SPY and QQQs than regular index options i mean imagine what that means yeah so so so i i shared one to give ourselves a little bit of cover in the sense that crypto is not the only thing that is actually receiving parts of this um as an aftermath but that it is overall a a secular trend so on that point you know why Bitcoin interesting? It's interesting to many people because beyond the thesis of the ethos, it's very volatile. And volatility itself, as you all have alluded to, is a feature that can be monetized in the ability to create a lot of different types of payouts. And so historically, one of the reasons I think people really liked trading altcoins was because it gave them this belief of exposure to leverage without taking explicit leverage.

In other words, if you thought there was some autocorrelation with Bitcoin dominance eventually resulting in altcoin strength, you might have thought, hey, actually, my next bag of all coins is going to be a higher performance uh trade and so i will actually take levered beta exposure through all coins right it's been true for many cycles in the past but this time it could be different and it could be different exactly because what you pointed out andrew bitcoin itself has now become gamified and so the question for investors is hey if i want the next 10x payout do i trade a random vc coin or a meme coin that i actually take incredible basis risk and not knowing exactly what other people are thinking and even the information asymmetry that might be embedded in it? Or do I just trade Bitcoin using derivatives to create the payoff I want? And that is the story I think that 2025

is going to unleash. There's a lot of institutional interest in creating custom payoffs of risk preference and using Bitcoin as the clean proxy removes this weird basis risk of not knowing what the underlying effects of these alt coins or meme coins in itself can be. So that's the broad picture. Love to dive into deeper with you. Make it fun. I could not agree more with you, Jeff. You covered a ton there. I think some of them we need to dig into a little deeper. But I would just add that I actually think that this is a part of a healthy market. I do think it is a subset of crypto. But to your point, I think it's a broader trend that people do want direct access. And they want the hopium high.

They want to feel like they have a lottery ticket that could change their life. And meme coins provide that here's where meme coins become important to me it's very very easy to teach someone that's been rugged pull at a meme coin why Bitcoin's better as it relates to fair and equitable distribution of tokens and so there's these learn there's these nuggets of truth that you can boil all the complexity down to this simple syrup of how was the coin distributed? And is that a fair mechanism? And is there a double spin? Like all of these things that we think are the – that everyone knows about Bitcoin, no one knows about Bitcoin.

I'm in Canada right now, and I'm at a hockey tournament with my son. I'm getting to talk to a lot of people about Bitcoin no one knows about Bitcoin I'm in Canada right now and I'm at a hockey tournament with my my son I'm getting to talk to a lot of people about Bitcoin a lot of people that you know are very very far from where I live so I'm getting to see kind of behind the curtain and to how how other people think about Bitcoin no one knows the difference between Bitcoin and meme coins no one understands that there's a broad difference in technology no one understands how one was fair and equitably distributed through a proof of work network and that no one owns bitcoin that didn't deserve it unless you stole it like you either you either purchased bitcoin and you get the price that you deserve you either mine bitcoin and you get the price that you deserve or you stole bitcoin in which case we've got lots of ways to freeze those coins and to deal with that fraud.

But I think this is the learning lesson. I think this is, again, we've gone through three cycles of Bitcoin and we've seen NFTs have the exact same exposure and potential. We've seen ICOs have the exact same. This is just a repeat of the same story, but in meme coins. But what's different about this time is that this cycle is not being controlled by retail anymore. This cycle is being controlled by Wall Street. And so I personally believe we've unhinged ourselves. Bitcoin is being controlled by Wall Street in a way that it's not going to have the fluctuations that it did in previous cycles, in my opinion. And the differences between Bitcoin and the gamification of just that asset class

is radically different than what you can get exposure to in the meme coin space. And so those differences are going to present themselves as people go through that educational process and participate in markets and get burned and have, you know, all of those things are a natural evolution of the maturing of a market as far as I'm concerned. Yeah, tell me, I couldn't agree more. Actually, maybe this is a little bit of a hot take, but honestly, a great worst-shock test in understanding whether you're a Bitcoiner pre-2015 or a Bitcoiner post-2020 is actually looking at how people respond to this meme coin frenzy.

If they're approaching it with this incredible holier-than-thou stance on a moral standing, what they're not appreciating as Bitcoiners pre-2015 know, is Bitcoin felt like this also very early. It's actually eerily similar how people would dismiss Bitcoin by using the same tone, using the same language of illegality, and actually problems with the adoption curve. And once you recognize that pattern,

as you've pointed out, Tillman, it's a repeat of NFTs. It's a repeat of ICOs. And all of these social mechanisms in which people take a black and white view is a lesson in which they learn through cycles what the ultimate underlying issue can sometimes be with people. And it generally is not related to like the concept of legality. And that's why I posted this kind of a bit of a rant last night on trying to help people understand. We have to be really precise when we talk about insider trading, for example, that it's a securities law, case law oriented undertaking has very little implications for the commodities world. And actually the kinds of charges you might think within the lens of the CFTC is not insider trading. It has to do with more market manipulation, fraud, promotion, things that actually have some like routings to like the financial system and the

legal system. And so the other thing I share with people is, you know, we have to be a little bit precise with our language in terms of like, what is it that we're fighting for? And what is it that we believe are the legal or social mechanisms that exist that can better the system. And as you said, Bitcoin at times, you know, pre-2015, in the early days, 2012, 2013, it felt really similar to this energy about people dismissing it. And what they're not realizing is that the rile is the signal.

The rile is the product market fit. The rile means that something is happening and you should be concerned about, well, what is it going to be that in the future is going to look different rather than worrying about the problems of now? And that's what makes a great VC, actually. It's one of the best Rostock tests to actually invest with crypto VCs, in my opinion, how they view this whole experience and what lens. Well, I think you're spot on. Sorry, Andrew, I'll make this short. But I think that it comes down to very, very simple facts. I can talk to 100 different crypto folks, depending upon, it doesn't matter when they got in, 2015 to 2030, 2023, 2025, whatever it is. And there's one common trait. They love the coin that made them the most money. That's it. That's literally what it boils down to.

I can talk to somebody that's made a bunch of money in Pepe, and they are Pepe maximalists. I can talk to a bunch of people that made money in Bitcoin, they're Bitcoin maximalists. And they're missing the point. It's about the truth behind the curtain. The price is the curtain. Who cares about the truth behind the curtain. The price is the curtain. Who cares about the price? Let's look at the technology behind the curtain and really take a step back and say, what is this technology the most useful to solve? What is the problem that we face as a society? What can meme coins do to include more people in a financial system? And I have to start looking at what we have now as a comparison

against those things. Are meme coins better than lottery tickets? I think they are. I'd rather play the meme coin game all day long than go to a store after work and put $5, $20 towards a lottery ticket. I don't get the same hopium. So to your point, the signal that we're looking for is that this is meeting the demand of a market. And it's not just meeting the demand of a market here domestically. You've got presidents of countries launching meme coins and rug pulling people twice in a weekend. That's unprecedented signaling. That's stuff that we should all be paying attention to and asking ourselves the question, if that's what people want, what can we provide them against an asset that was fairly and equitably distributed that can give them the same exposure, but without all of

the nefarious actors that can control the markets and rug pull? So there's a lot of diamonds to be found in this mine, but there's also a lot of coal to dig through. Well, as it relates to Signal, if we can pull up the Michael Saylor tweet associated with Strike and its performance effectively in the first two weeks of it existing, his point about quote unquote Signal, Well, there's your signal. By the way, there's this massive, massive disconnect right now associated with Wall Street and Bitcoin and then crypto Twitter, right? Wall Street and Bitcoin is at an inflection point where things are happening at breakneck speed. People are adding to their holdings, adding to

their holdings, creating new product, creating new product, adding to their holdings again and again and again. And it's very, very different than the vibe, so to speak, on crypto Twitter. Give me a minute to pull up the tweet here from Michael. But you may have seen it uh jeff where he talks about um you know strike is the best performing and most liquid perpetual prefer preferred security over the last two weeks well what is that signal that signal is saying to wall street hey you know if if if you want to do something that's meaningful if you want most liquid best performing, you might want to do more of this on Bitcoin. And there's the numbers, right? The signal is the numbers and it's significant. You and I both know that preferred securities have not been preferred by anyone for years and

years and years. And now we have this data that's meaningful, right? Yeah, totally. And I've not been shy in expressing that I think STRK is a phenomenal instrument and it maybe is the first preferred I actually ever thought that people should own because it's not a conventional preferred. And I still stand by that STRK is the best security

within the capital structure opportunity of micro strategies complex today. And I still stand by that. STRK is the best security within the capital structure opportunity of micro strategies complex today. You know, I also see people sometimes like taking my radical portfolio theory and then simplifying it by saying, it sounds like 60% micro strategy as in the compliance framework and 40% in Bitcoin is like the radical portfolio.

And I want to say like, that's not the radical portfolio. Like just to be super clear, micro strategy and Bitcoin is the the radical portfolio. And I want to say like, that's not the radical portfolio. Like just to be super clear, MicroStrategy and Bitcoin is the same risk. It's really similar risks. So actually it's not going to look as diversified as you would hope for. STRK, however, is a diversifying instrument. And if you wanted to distill it to two securities, I made the tweet that maybe it's 60% STRK and 40% Bitcoin because they're both kind of pure in the underlying factor of risk exposure where STRK has tremendous duration. It is a perpetual coupon that has a convertibility feature and no callability. Most prefers have a callability feature, right? At some point, if it goes above par, the issuers call it. Here, it's actually not callable by the issuer

because it's convertible. Well, it's convertible to Bitcoin essentially through MicroStrategy's conduit. And that is why it's afforded this strategy. And you get a nice coupon with it that's actually perpetual, which is why there's a lot of duration. And so I think STRK is a really interesting instrument. And to your point, Andrew, we're going to see more kinds of ways to have different flavors of Bitcoin, either as its main dish, either as a side dish, as a fusion with a little fixed income or a little little other come on i think he lost the internet yep you may have i'll pick up where yeah he left okay there you go jeff you're back no he he popped off and jumped back in but go ahead tell me um no i i think he's spot on i think that the i think the educational curve of Wall Street is going to take precedence over what we consider the educational curve in crypto is new for me. It's new for everyone. So as we see Bitcoin really anchor itself as

the hardest asset that Wall Street can build derivatives off of, this is going to be a new educational curve that all of us have to embark upon. And it's a little bit scary. I kind of wish that it was the days of old where I was the subject matter expert and I kind of knew what I felt like was the entirety of the market or close to it. Now, they're coming out with new products at breakneck speed, and it's only going to accelerate. And it's only going to come from different firms. But maybe this is a bad take, but I look at this as a means to allow people to take bets that allow them to be liquidated.

If they take the wrong bet, they should be liquidated. That's part of the market consequences of making poor decisions. And so all of these complexities that you're adding in terms of products are really geared towards more involvement, higher capital volume involvement, and at the same time, allowing people to dial their risk to their preferences. And when you're allowed to dial your risk to your preferences and your strategy fails, it's not this binary, oh, I hate Bitcoin, it's down. It's your strategy that you deployed. And it's exceptionally complex, and it works only as well as you design it to work. And so there's going to be this race to not only create products, but then combine products and then tout the outcomes. And when you start seeing firms taking multiple Bitcoin products and including them into a strategy that they're proposing people should get into, that's when you're going to start seeing really the leaders take shape. Because right now now i don't

know what to do in terms of the game of gamification of bitcoin i'm waiting for a thought leader to say this to show us what to do you can get into the simple things like yeah should you have exposure to micro strategy or strategy yeah absolutely and i do and most people i think that love bitcoin uh see that as a pretty simple play but the plays are going to get more and more complex and they're going to require more and more education and more and more navigation to navigate them. And I'm excited about it. It's like a whole new fresh learning curve that we have to go through. Well, the tweet that I pulled up is is an interesting microcosm of where uh wall street is at right now because there's different different levels of commitment to bitcoin in in all of those points right bits you know bernstein put out another note where they're pounding the table on bitcoin because of a couple different factors and

then crypto in general that there's a we're about to hit another leg up bernstein has been very very loud in their research talking about just buy everything, just buy everything. You know, damn the torpedoes, just buy everything. That was, you know, four to six months ago. Paul Tudor Jones is I think he tripled his Bitcoin iBit stack in his last 13F filing a couple of weeks ago. Fink talking about five to 700 K Bitcoin again huge commitment Goldman pushing swaps and options again that's several levels deep into what Bitcoin can be and what it can do for you in terms of returns and then JP Morgan just barely putting their toe in and mentioning Bitcoin ETFs in their ETF note that they put out the other day. So different levels

of commitments. I'd like to get Jeff's take on Bitcoin options, because to me, that's where all the big retail money was made in the GameStop saga. It wasn't simply number go up attached with their equity. The, you know, the small retail traders that jumped into options associated with GameStop, that's how they made for their lives. You know, $10,000 went to $350,000 or half a million dollars for them. So, Jeff, you can talk about Bitcoin options and what it represents and that people should educate themselves because, you know, as it as it as I look at it, if we go to 150 or 250 over the next two years, that's fantastic. You know, that's a two and a half percent number over the next 18 to 24 months. But what are the options opportunities look like with that type of price action? I would imagine it's pretty substantial. Yeah, yeah, yeah, for sure. I think there are so many opportunities for retail. I think there's so many opportunities for institutional as well within the financialization of Bitcoin. We can touch on that too. And look, as the head of Alpha Strategy at Bitwise, all the things that you've tweeted on adoption on the Bitcoin spot ETF, very interesting.

But the reality is the complexity underneath that is going to be derivatives. And actually, that's where the opportunity is going to be, as you pointed out. So, well, first and foremost, if you're a retail investor, you have to really ask yourself, what is it that I have an edge in that institution don't have an edge? That should be your first motivational driving question about the kinds of trades you want to do. And most often always the greatest benefit of retail is you're small. So you can trade illiquid things that have thinner markets and you don't leave a footprint because you're not bringing block-sized trades. That's your biggest advantage.

So if you think about that, options represent that biggest convexity for retail because it doesn't take a lot of contracts for you to put on the initial trade where you may experience not the best execution, because again, your retail, you're not going to get best execution. You have to accept that. But you can turn that into an advantage by actually trading illiquid things where the institutions are not trading it within the options curve, because that actually is one where you have a little bit of house edge, mostly because these kinds of options tend to have organic compounding of risk. So the inherent gamma that comes with these options means you don't actually have to trade that much anymore. It just grows with you. Again, the benefit of retail is you don't want to trade too much because you're actually getting hurt if you trade too much.

So you want to own the thing that organically just grows without touching it fastest. And it can accelerate with real gamma. Options let you do this. And so to me, it is not a mistake that retail wants to trade options. It's actually totally rational and economically incentivized that these should trade options. And so everyone should learn about it. It's the biggest advantage you'll have against big institutional footprints. That being said, institutions can now do things with Bitcoin that retail can't. So, you know, for example, I come from exotic derivatives trading in my background. That's where I started my credit Morgan Stanley.

You may be familiar with American options, European options. You may not be familiar with Asian options. Have either of you guys heard of Asian options? No. So Asian option is the most simple exotic option that is a play on American expiry and European expiry. There are options with Asian expiries. What is an Asian expiry? It actually takes the average of several

fixings throughout the duration of the options life. So in other words, American options and European options have one observation, right? The strike is exercised against the expiry of the contract or continuous observation when you choose to exercise it in the case of American. Asian might say, hey, I'm going to write you a one-year option on Bitcoin, but we're going to actually record the monthly close for 12 times. And the average of those 12 is the actual settlement price. Now that's a little exotic, right? But think about it. It is very exotic. But what does that do inherently? Intuitively, you can now understand some investors

might want this because they don't want the fixing of the expiry for Bitcoin to be so specific to one date, right? Because there's so much risk with how much volatility Bitcoin is to put all your bags in one print. So you might say, actually, Asian options de-risk me a little bit because I get to observe the price in February and in March and in April and in June. And on average, I think it's going to go up and I want the average of all of these. And so you might, as an institutional investor, be better off trading an Asian option. You have to have some views, of course. But the point is that it reduces volatility. Now we can create these kinds of instruments that create custom payoffs that actually fight like weaponize the power of

bitcoin's volatility to your advantage of creating different types of payouts um institutions can now do this hopefully in a world where with sap 121 repealed, that Wall Street can now start offering these types of custom swap contracts and options contracts in ways that will be really great for institutional adoption all the same. Again, retail and institution, they just have different edges. You just have to know what you bring to the table and where you can maximize those profit opportunities. But the general trend is similar, which is that the volatility itself is inherently a useful thing, and we need to embrace it. It's actually what makes Bitcoin really special, in my opinion, versus gold. The only way Bitcoin will outperform gold over time is that it must be more volatile than gold. And I think it will always be more volatile than gold. But volatility is also a long observation window. It's not just

like something that you experience one day and call it a volatility event. Gold might have one of those jump risk type events in the future, who knows? But as a long average window of observations, Bitcoin's volatility is, in my opinion, always going to be pretty high. It's not going to be like 300% IV high because those days are funny money days. But will it be always like above 50, 60? What we would still absolutely consider high? I think so. And I think it will be for a long period of time. Really interesting.

I have not heard that. So it's essentially allowing you to dollar cost average into your option price, which is, that's fantastic. I have a question for you that's kind of a continuation of this. As you see Wall Street wanting more and more products because the outcomes that they desire are so vast and different. Do you think that more products are going to be created to hedge against the risk of Bitcoin? Or do you think more products? Because right now on the retail side, I think there's a deep desire to accelerate the risk, to take a larger bet with a smaller amount of money and like that lottery type mentality, the hopium, that's what they're chasing. I don't feel that way about the institutional side of the buying market. I feel like there's more of a push to have exposure because of the macro world events that we find ourselves in as an anti-inflationary hedge. And so I'd be curious whether you think the vast majority of the time and effort

is going to be trying to bring retail in with more sex appeal as it pertains to the products that are created, or do you think it's going to be spent trying to hedge against that risk so that it's a more stable foundation against that volatility for institutions to build off of. Before you answer that, Jeff, here's one of the points. The point that you kind of just made is a quote that you put up a few days ago, and I've linked it here so everybody can see it. If you want to comment on that as well, as it relates to, you know, being, taking contrarian positions, and over time you want those contrarian positions. And over time, you want those contrarian positions to turn into consensus. Yeah.

Yeah. I think the art of VC is, in a lot of ways, the art of meme coin trading, I think, was the kind of thing that I was trying to distill here, which is that the end game, of course, is you want there to be true productivity gains with a world changing concept that changes people's lives. That's where we want to get to. But at the very beginning, it's really hard to know if you'll get there. You don't know with like really

big revolutionary ideas. And so what Keith Ruba here actually, I think is intimating is at the very beginning when you're making a great bet, the social consensus is not going to exist. And part of the job of a great VC is to take advantage of it when it's off consensus, but recognize that over time you must convince them to join you because if they don't join you, it'll actually never happen. So there has an inflection point where the VC, the art of a good VC is to change something so ridiculous into a, into a catcher of more capital, more social, more human capital such that the idea then becomes mainstream. And, and I think crypto, there's so many things within the concept of crypto where it feels early stage in the way that it's off market but part of the meme is that it's going to be

valuable uh and so you know a lot of these vc tokens are trying to ride that wave in a way that is fundamentally aligned with the values of the crypto ecosystem, which is inherently challenging at times, as I observed it. Yeah, I think to your point, I think that there's so many rug pulls that have happened over the last two weeks in the meme coin space, and there's so many headlines. But there's one thing that I think a lot of people have forgotten, which is that you don't have to buy the meme coin at launch. I have enough knowledge in this space to tell you with a high degree of confidence that it's a rigged game at launch. That unless you have a sniper bot, you're going to get filled as exit liquidity for the people who do have sniper bots. And so, you know, I think the game right now is to see how high the market cap can get in a very short period of time.

And then you have this massive drawdown. Well, I would argue that there's still life in the project. And you may be, you know, selling doge at those depressed prices there may be an organic movement like you said that changes the narrative and people buy into it and you get this huge influx of retail traders that come back to it and you know if you if you want to really bet with a higher degree of confidence on meme coins, wait until they have four or five cycle crashes, and then wait until they break all-time highs past that after they've been around for six months and a year and everybody's forgotten about them, nobody's thinking about them anymore. And if they start to pick up momentum and traction after they've been deemed dead,

that is a much better place, as as i'm concerned to enter versus the competitive environment that you find yourself in trying to enter when the hype train is at full speed and you're trying to chase the green candle up and so my point is like time will tell which project's gonna you know amass the following that's needed to have critical mass. I can't look at this Libra token, for example. You have a president of a country, tweet about it twice, instantly goes up to a billion dollar market cap, essentially. And then two massive rug pulls that suck all the life and liquidity out of the project. That means that there was a mass exodus of the founders and the devs, but that token is still in the hands of a bunch of people.

Those tokens weren't destroyed. They're still out there in circulation and they're being held by a lot of retail folks that are down 90% on their bags. The point I'm making is that there's still hope. If you as a retail investor find yourself holding one of those bags, there's nothing that keeps you from spending your time, effort, and energy standing on the corner of every city saying, you know, the Libra is the next Bitcoin. And if you

can get people to believe you, then it's going to go up in price and it may end up being a multi-billion dollar coin in the future. But it doesn't mean that it had to have, like the end game doesn't, isn't a reflection of how it started. They take on a life of their own. And as it matures in the market, it either continues to grow or it dies. And, you know, time and people make those decisions. By the way, rug pulls are not a new phenomenon. They just happen much faster than they had in previous market cycles. And they're not only a crypto phenomenon. So I'll remind people because most people aren't old enough

on crypto Twitter to remember these things. But Enron existed, WorldCom, MCI existed, other versions of quote unquote rug pulls where there was enormous fraud. When that fraud was detected and uncovered, the equity went effectively to zero within moments. Yeah. I mean, Andrew, I'll give you an even cleaner example. SPACs. Yep. Yeah. SPACs. If you are the promoter behind the SPAC, the kinds of economics you're able to accrue in ways that look different than the underlying common investors in the future is exactly kind of the incentive misalignment and information asymmetry that meme coin launch pads look like at some level. Right. And so, yes, the SEC might say there's all these disclosures that tell you about these things. So now it's legitimate that it comes to market.

But actually, the core thing still has incredible economic and information asymmetry. Right. And so the thing about meme coins that I think is unfortunate is the virtue of blockchain, which is that it's so transparent. And so people can call out on it much more easily than, hey, let's actually look at all the capitalization of the SPAC table and see who's on it and why are they on it? And why are they being invited? Oh, because they can promote it. Like all those kinds of stuff is hidden. And so, i agree with you enron being a fraud etc is a is great uh example of generally like things not working out uh as is vc investing too where 90 percent of things fail but when we talk about specifically like these kinds of economic and

information asymmetry as you've pointed out they're in our regulated systems in different ways people just don't know about it as much as they would because there's not as much transparency the way crypto brings itself to that standard. Well, and I don't think people understand how to read the tea leaves, if you will. I think a lot of people that get into crypto, they look at the market cap and they look at the price. And that's what leads them into making the purchase and then they look at some twitter account that's you know some key in online influencer that's saying hey this is the greatest project that's the the end of their due diligence and you know it's it's gambling and and it's it's serving a market set that we want to serve everybody likes

to gamble but we can learn exceptional lessons from this market. I think there's more baby than bathwater, to be honest with you. And honestly, if you look at where we've come from, again, draw comparisons from the past, real world, traditional past, like lottery tickets, but also the NFT space, the ICO space, the pink sheet space. There's always been these types of markets, and they typically are the drivers of the technology because they have to change much more quickly than the legacy does. And so if you look at the problem with the meme coin space right now, you you can dissect it and there's probably an infinite number of things that you can improve upon but one of the major things that

isn't being spoken about and it should be is that there are technology companies that are building platforms that are enticing people to to rug pull that have buttons that say rug pull, and you push it and it dumps every account, every wallet that you have, and it dumps all the supply that you have. So there are easy solutions where, you know, if you remove that functionality, for example, from the technology that allows you to launch a meme coin, then what's that going to do? It's going to make the rug pulls fewer and further between, and we're going to be able to isolate the bad actors that are building technology to rug pull,

to defraud the markets, and it's going to become less and less attractive to do so. So it's going to force people to start playing within the same rule structure that we're comfortable with and that the market agrees is a safe rule structure. And watching the meme market and just educating yourself, I encourage anyone that's been in crypto to download the Phantom Wallet, download DexScreener, and start monitoring this undercarriage of the crypto space you don't have to put one dollar towards it but boy you're going to learn a lot of lessons from it i mean that the

millions of coins that have been launched and the liquidity that people are locking to those coins um they're they're going to be around a lot longer than you think. And I think that I would predict that there's going to be a resurgence of projects that are going to come full circle back around. They will have dumped and been called totally dead. And then someone's going to see the opportunity. It's a vehicle for liquidity. There's locked liquidity on chain that you can work off of. And again, the asymmetry in terms of the difference between what people know and what people are betting on. If you look at, for example, the Libra token, there's $100 million that's sitting in an account

and they're debating currently whether they're going to re-inject that $100 million back into the token. Now, who knows? You don't know whether they're going to do-inject that $100 million back into the token. Now, who knows? You don't know whether they're going to do it or not. There's no regulators that's going to force them to do it. But if they do that, the price is going to skyrocket. $100 million going into Lever's liquidity pool right now should take the price up back to where close to all-time highs it was, where it was at all-time highs. So you've got this wealth that's being concentrated in an unfair manner in the meme coin space. But that wealth is addicted to meme coins. So it's just going to be recycling through multiple meme coins. And it's going to bring an evolution of sophistication into that market. And it's going to bring regulation into that market.

It's going to bring a lot of education into that market to where if you get burned on a meme coin, what's the likelihood that you're going to go straight back in and invest in another one or buy another one? It's going to be harder. And then if you get burned again, it's going to be harder subsequently the next time and the next time. And it's going to educate you as to why this market exists, but also what the fallacies in the market are. Yeah. Yeah. That's why at some level I shared that meme coin is natural selection. It truly is, instead of just taking thousands of years happening in a day or less,

but the reality is this is what it is it's a sorting mechanism of idiocy and people who are talented otherwise and navigating whatever the world offers um you know at the end of the day like i agree with the uh notion of generally the people who are really good at this stuff are not dumb. Like they're, they're, they're actually building incredible softwares and it's very competitive, actually this meme world in itself. And so there's also this notion that like the total sum of all this is useless, but I actually see a lot of really smart people learning how to build these infrastructure on the back of this profit motive where they're outsmarting another really

smart person. And it does become like a human capital game, which is also why then I made the joke of like, you either become a bot or you expire like as a human. And it's, and meme coins is accelerating that unfortunate trend for like the age of AI. But, you know, when you really think about it, you know, why is Renaissance technology so good at what they do? They don't really care what the underlying stocks are.

They just trade data and systems that can take advantage of it. And in a world where you're building IP off of those types of things, how could you judge that world versus what Rentech does with equities where they don't actually care at all about what the underlying equities do for the world anyway? So, you know, you have to almost take like a parallel stance on your view on Renaissance technology as a business before you go down the path of whether you decide meme coin trading in itself is unproductive for the people that are building like human capital behind it. There's a, you know, whether it's my thesis or somebody else's thesis, I just like the thesis

that what's being built in terms of Bitcoin gamification right now, most people have not noticed it, at least retail, most real tail folks have not understood it yet. And my thesis is like other cycles, whether it was the ICO cycles with NFT done in the meme coin space can be applied to whether it's bitcoin options swaps all sort of um exotic stuff that you've described here uh today jeff that's going to be available to people and they're they're going to be able to take that education that they learned to some degree and apply it to bitcoin and bitcoin yeah yeah my guess is is that's one of the reasons why a guy like Larry Fink, who never makes any price predictions on anything ever decided at Davos to say, well, you know what, based on, you know, don't quote me, but I think Bitcoin's probably going to five, six, seven

hundred thousand dollars. I guess that's an it's incredible statement from a guy like that. My guess is, is the underpinning here is he knows all the stuff that's being built's an, it's incredible statement from a guy like that. My guess is, is the underpinning here is he knows all the stuff that's being built. He knows he he's been through different cycles of things being built the way things are being built underneath Bitcoin right now. He knows what it means and where it goes. And so, you know, he's also pumping his bags at Bitcoin made him the most amount of money. And so he's a Bitcoin believer. It's just simple human nature at the end of the day. I do think he loves the notion of tokenizing everything and that's making him kind of open his eyes up beyond just Bitcoin. But I do think

you're right. I think him being involved, it's no different than if you go to the teenage years right what's important to teenagers these days shoes fragrances some of the shoes and the fragrances go for insane money it's a market unto itself there's trading in the market there's sneaker cons that are going on and then if you elevate beyond that you go into into the 20-year-old to 30-year-old category. What do they love? They love watches. They love the next tier of asset that they get. Yeah, a car.

And this is just that. But I think the difference here is that I don't think that retail is ever going to trade all of the sexy products that are going to be derivative products of Bitcoin. I don't think that's, I think they're going to keep trading sneakers, which are the, you know, the meme coins and the smaller things. But I do think that the amount of liquidity that lies in the locker room of Larry Fink makes all of that retail trading look very, very small. And so the buyers that Larry is bringing into the

equation are not retail buyers. He's doing what Michael Saylor is doing. He's trying to bring corporations, institutions, and sovereign nations to the table. And if he's successful in getting that momentum to the place that the retail momentum was in Bitcoin, it will be a proverbial arms race as it relates to people buying Bitcoin specifically. And I think that's the key thing I've said for the last six months is I'm just watching that Bitcoin dominance number because that tells me a lot about this cycle. Because I do think that more, I think the amount of money that's going to come into bitcoin is going to make every other coin look like a meme coin including ethereum that's my personal take i think bitcoin is so stable and i think it's so predictable that they can build substantially more

infrastructure around it than they can something like Ethereum where there's a lot of unknowns that have to be wrestled with before you start building kingdoms on it. One last point from Jeff, and then we'll let him go. We'll talk about ArchPublic. So Jeff, any parting thoughts, my friend? Yeah, I think that this has been a fascinating discussion. I end with the same note I began with, which is that whether you like it or not, whether you have good feelings or bad feelings, whether you think it's immoral or immoral, the reality is this is the way the world is going. Hyperfinancialization is a trend. And so we must all accept it and then try to think of ways then we can improve the system

so that we minimize losses for the unfortunate where they may actually be net worse off. And there are issues, mental health issues associated with these things, with gambling, of course. And we should, as a society, care about those things. But to take the view that we can kill the whole thing when there's been years of hyper-financialization happening in a regulated way is misguided. So we need to channel that energy differently.

Of course, I feel horrible for the people that are losing money, meme coin trading, if they have a mental health issue associated with that. And we have to find a way to ameliorate the situations. The other thing about meme coin trading, and I haven't seen many people talk about it, is that it could actually become a national security issue. Here's how it can become a national security issue. Millet actually came out yesterday and said it's very unlikely that Argentina has even lost money trading Libra because it's not part of what Argentina does. And actually, if anything, it was PVP versus Americans and the Chinese. And so if you believe meme coins actually is kind of like a wealth extraction that's happening in a global borderless manner

where the Chinese, for example, are extracting wealth from the American mental health issued people, like that becomes actually a national security problem, right? That's actually money leaving the US. So like, that's a lens I'm actually really sympathetic to where we have to think about like, the aftermath of the inevitable trends of what things may be happening. But the reality is that meme coin in itself could be a way to wage economic warfare. And I know it sounds crazy, but like, if you think

about how crypto sometimes sits at this weird, murky intersection of that kind of dark money, borderless capital, you know, I think it's in our interest to make sure people are educated about it. They know what they're doing. And also realize that it can't just actually like not exist it's not americans playing against americans there's other countries involved yeah well i just like bitcoin well i just like bitcoin it can't be shut down because you can't shut it down that's right well the only thing you can do to your point and i thought about this when i was listening to the interview with um the team the dev team that launched the um uh liebrich he says, I have $100 million sitting in an account, and I don't know what to do with it. It's not mine. That's what his

words were. And Dave said, well, whose is it? And he said, it's the Argentinians' governments. And so right in that moment, I thought the exact same thing that you just articulated is the Argentinian government sucked $100 million out of the U.S. economy because there were no players on the other side of that trade that didn't come, or very few that didn't come from the United States. And that is a real large issue that the regulators have to figure out. And if they don't, then it does pose a risk, a national security risk. And the larger the coin, if you look at what Trump's coin did, for example, I'd say it had the opposite effect. But the amount of participants outside the United States are so few and far between compared to the participants inside the United States. We have the risk. No one else does. The more we participate in this market,

the more money that could be extracted from the US economy into another economy. Because now those funds are outside of our control. They could choose to put them back into the meme coin world and we could have a, you know, fair and equitable contest to see who can extract the most. But in most cases, it's not. It's looked at as a way to extract and then they put it to real world use and it never enters the market again and we never have a shot to get it back again. So that, that is something that will have to be addressed in spades. Guys. We appreciate your time, Jeff. Thanks for being on. It's been fantastic here today.

Producer is telling us we need to wrap up. So we'll chat a little bit about arch public, but thanks, Jeff. We appreciate you having you on. We'll, we'll see you soon. That's great. Yeah. See you guys. Have a good week. Take care. Let's go.