The Wolf Of All Streets - Bitcoin Is Going To $40,000 | Sei Launch | Mike Alfred & Jeff Feng

Episode Date: August 16, 2023

One of my favorite guests, Mike Alfred is coming to share his forecast for Bitcoin and crypto. Jeff Feng, the co-founder of Sei will come to the second part to talk about Sei launch.  Mike Alfred: https://twitter.com/mikealfred Jeff Feng: https://twitter.com/jeffdfeng ►►MELD MELD will bring to bear the full power of decentralized financial instruments to the masses. Banks are at the heart of the economy, MELD will become a new set of banking tools that are by the people and for the people. 👉 https://bit.ly/meld-early-access  ►►OKX Sign up for an OKX Trading Account then deposit & trade to unlock mystery box rewards of up to $60,000!  👉 https://www.okx.com/join/SCOTTMELKER  ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets   ►►COINROUTES TRADE SPOT & DERIVATIVES ACROSS CEFI AND DEFI USING YOUR OWN ACCOUNTS WITH THIS ADVANCED ALGORITHMIC PLATFORM. SAVE TONS OF MONEY ON TRADING FEES LIKE THE PROS! 👉 http://bit.ly/3ZXeYKd  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/   Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #trading  0:00 Intro 2:00 Market has changed 6:00 40-50K is possible by the end of the year 11:00 The perfect bullish storm 15:30 I expect 6 figure Bitcoin next cycle 18:00 ETF 22:00 Miners will benefit heavily from Bitcoin price action 30:00 Mike Alfred: I will focus on Bitcoin 33:00 Sei launch: co-founder Jeff Feng 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.

The Bitcoin market has been extremely boring, although yesterday it had a drop of $300 or $400, which sent altcoins flying down 4%, 5%, 6%, 7% in a matter of hours. Largely exactly what I was discussing with Ben Cowan from Into the Cryptoverse yesterday, that whatever move we see from Bitcoin next is likely to be explosive and altcoins are likely to be disproportionately harmed either way that Bitcoin goes. And that was pretty much proven when Bitcoin went two or $300 down and altcoins crashed. Anyways, we know that Bitcoin has been largely sideways and that a big move is coming. A lot of people think it's down, but today's guest thinks it's likely to be going up. He's

even tweeted that he thinks 40,000 is in the cards very soon. I've got Mike Alfred back from a long hiatus, a forced hiatus, but a pleasant one apparently off of Twitter of over 50 days. Glad to have him back here and to see him tweeting once again. And then on the back half of the show, we have Jeff Fang from Say, the founder of Say, which is the largest project everyone's talking about right now, which just launched. And one of the few things where the price is actually up. We're going to talk about that in the back half of the show. You guys don't want to miss it. Let's go. join us today. Mike, you're back. Welcome. Yeah. Thank you, Scott. It's good to be back with you. What happened on Twitter, by the way? Because you were just gone for months, seemingly.

Yeah. I mean, the same thing that's happened to a lot of folks, right? Twitter defaults to using your phone number, right, as a form of authentication. And even if you add another form of authentication, two-factor auth, they'll still default to your phone number. So if somebody takes control of your phone number, then you're going to lose your Twitter account. And you see that happening over and over again over the last few years. It happens to almost like every celebrity, every politician. Yeah. Yeah. For 15 minutes, basically. I knew what it was because every single person I know in crypto that's risen above a certain level has been SimSwapped at least once. And so I had been trained five years ago, like six years ago, someone said, hey, disconnect your phone number

from everything, which I had for everything except for Twitter. So here's what it is. Wow. Glad to have you back. And as you said, you didn't really miss it, right? No, no, it was actually the best summer I've had. I just spent a lot of time with my little daughter who's almost five months old. And so it was kind of a perfect timing, to be honest. Also feels like you went away and the market's exactly the same, 50 something days later, right? Maybe just at the highest level, yeah, on price. But there was a really interesting movement in July. I don't know if you kind of noticed this, but between July 1st and July 13th, there was the July 4th holiday there.

Some of the Bitcoin miners literally doubled in that period. And what was interesting about that to me is that Bitcoin was flat for that month. And it's obviously down month over month. It's down since early July. But a lot of those miners absolutely exploded higher. Coinbase obviously exploded higher over the last, call it, couple of months. So Bitcoin-related equities are behaving quite differently than Bitcoin. And I think what that's signaling is they're pricing in the kind of curve of the next 12, 18, 24, 30 months of Bitcoin prices. And the Bitcoin commodity market is pricing in the here and now, saying, you know, obviously Bitcoin is worth whatever it is, $29,150 right now. But if you're buying a Bitcoin miner with operating leverage to the price of Bitcoin, what you're concerned about

is the price of Bitcoin over 24 months. And that market is saying, or at least it has been since early July, that the prices are going to be going a lot higher. Yeah, that makes perfect sense. I mean, I've got a couple of your tweets here we can just share to give context for our title here, Bitcoin's going to 40,000. Feels like something major is about to happen. So many technical and fundamental factors aligning. The next few weeks could be interesting for Bitcoin. There's a phase shift in the matrix that I was expecting over the last couple of weeks, but it's definitely here now. The back half of August, starting today, is going to surprise people. Hold on tight. With a high degree of confidence, I see 40,000 plus Bitcoin at least once before May 15th, 2024. I totally agree with that. Are you prepared for this scenario and for

what might logically happen afterwards? And then we can get into the ETF, I think, a little bit later. But I mean, is that what you're talking about largely is with the miners and that movement that you saw there? What else are you seeing right now that gives you this high degree of confidence? Yeah, that's just one of, I don't know, maybe dozens of things. And again, I've had more time because I haven't had to tweet or read other people's tweets. So I've been running, you know, 10 miles a day outdoors, even in the heat of the summer, all summer, like almost every day. So that's given me a lot of time to really think deeply about what's going on. And one of the interesting things as a backdrop just to consider is Bitcoin's up 75%

year to date right now. And I say that because most people should know that if they're in the Bitcoin market. But if you just look at the sentiment, if you look at the tweets that I'm seeing right now, if you look at kind of the way people feel about Bitcoin, it feels like Bitcoin is down for the year. I think a lot of that is the sequence of returns, right? So if you think back to January, a lot of the return for the full year happened in January. Like Bitcoin was up almost 40% in January. And then it's had a couple of flat and down months between there and then a couple of rallies, right? And so it's been quite painful, right? Even though Bitcoin's up 75%, if you just bought Bitcoin on January 1st and held to now, it feels like you're down. So with that as a backdrop, the other thing to keep in mind technically is that we're coming up on basically all the moving average lines, right? Over the next one to three weeks, we're going to be hitting pretty much all the lines. They're all, 27, 26, 28, right? They're all right kind of below this level. And Bitcoin sort of been trending downwards since around July 13th, 14th.

And so it's going to intersect, I think, with some of those lines. And so for me, what I'm seeing is this setup that's quite unique, where like, there's probably only like $1,000 or $1,500 of downside if it connects with with those lines. But on the upside, I see 40 to 50 K Bitcoin possible by the end of the year. Right. And certainly by the having that seems logical, just thinking about the cost of energy to mine, the hash rate has continued to march higher. So that's a nice leading indicator of network strength. You know, we're well over 400 X hash. None of the miners that I'm seeing are slowing down in their investing in CapEx to build their businesses.

You know, if the halving hits though, and the price is still sort of down at this level, a lot of those miners are going to get shut off, which will paradoxically actually make the miners who are economical at these prices, you know, more productive and more profitable in some ways. So I think there's a lot of ways to win right now, technically, fundamentally, from a sentiment backdrop standpoint. And even if I'm wrong, even if Bitcoin goes down for the rest of the year, it's probably going to 24K or 25K, which is the 20% downside. And you still have something like a 300% or 500% upside over two to three years if you use sort of historical having, post-having behavior, and then you just sort of chop off some percentage of historical returns to account for the size now.

Is there anything on the downside that could change your opinion, like if we start going below 24 or 25, or if there's some fundamental global economic event, I mean, Bitcoin has clearly been completely uncorrelated, right? I mean, it is just no matter what every other market does, no matter what the dollar does, no matter what stocks do, it's just trading sideways. I think we want to see that. But do you think that there could be a black swan in the economy that could sort of change your thesis? I mean, there always could be, right? And that's where the macro bears. I mean, they've been beating the drum on this since last fall, right? I was arguing with people on Twitter at much lower S&P levels saying, look, the sentiment is way too negative

to have this huge macro-led sell-off that takes the S&P below 3,000. That ended up being right, right? Fading that sentiment then ended up being right. Then like a couple of weeks ago, people were too bullish, right? Like all the Wall Street analysts raised their targets and we're going to go up to all time highs before the end of the year. And that was probably too much given that rates have gone up 500 bps off the bottom.

And I don't think that's fully priced in, right? Like if I look at the real estate markets, which I watch very closely, particularly locally, because I have a personal interest, but also because I think it's a good leading indicator for where things are going. People are not convinced yet that they need to lower the prices. They list their house and they just let it sit for six, nine, 12 months at these really high levels because they still have a job, they still have cashflow, and there's still a lot of liquidity in the economy.

So certainly if China crashes, if the bond market crashes, if the commercial real estate market crashes, which sort of is in slow motion, like if you look at office in the US, it's already crashing. The problem is just that the loans don't come up for sort of refinancing that often. And the tenants are locked in for two, three, four, five, seven years in some cases. And so you don't really know what the real underlying value is because it's being masked by the previous interest rate regime, by the previous cheap money regime. So it's certainly possible things could turn down. But Scott, my opinion right now is that unemployment is still so low. There's still so much sort of liquidity broadly in the US economy.

I just don't, I still don't see like massive downside. There would need to be some catalyst that's truly a black swan. And like all the gray swans, in my opinion, are like mostly priced in. Like everybody knows geopolitics are, you know, between the US and China and US and Russia, and some of these things are bad. Everybody knows the office market is turned down. Everybody knows interest rates have gone up a lot, right? Everybody knows that there's a risk that risk assets have sort of priced in, you know, too much, you know, decreases in interest rates from these levels, right? Like the Fed's going to pause and come down. I feel like all that's sort of priced in. What I don't see is anybody pricing in post halving traditional cycle type dynamics where Bitcoin really has the possibility of running 50, 100, 200%. That's not priced in the market. The sentiment is not reflecting it. Almost nobody

seems to think that's going to happen right now. And yet it happens every single time. Yeah, it does happen every single time. And I mean, I agree with you. I think that we'll probably see or seven month time after the halving when we usually see Bitcoin go up. We actually could have the perfect bullish storm with that halving that you say nobody's really pricing it. Yeah, that's obviously possible. I think it's impossible to predict in advance exactly what the fundamental factors are that are going to drive it. That's why even though I make fun of the traders on Twitter from time to time, I've stopped doing that quite as much because some of these technical factors, some of the kind of like Elliott Wave type analysis are actually quite predictive of movements that don't sort of show up in the news flow, right? Like if I showed you the news flow from January to July

of this year, in December of last year, when everybody was bearish, by the way, because Bitcoin was 16K and FTX had failed and everybody had lost money and Celsius and BlockFi and Voyager last year, you would have thought there's no way Bitcoin could be up 75% year to date in August. And so sometimes the news flow, the obvious macro factors are not that predictive in part because they're sort of already priced in. If a market gets too negative from a sentiment standpoint, it gets too depressed. It can go up even if the news flow going forward continues to be poor. And I think that's what's going to happen here. We're going to maybe have another year of sort of negative news and Bitcoin won't care. It'll just do what it does. It'll go

down to 25 or down to 27, then up to 40 and down to 35. And then all of a sudden at 45 or 50K Bitcoin in a year from now or 18 months from now, all of a sudden the news flow flips positive and it's like uniformly positive for 12 months, blowing the price to 80, 100, 120, at which point the shoe starts to drop again on the cycle and we draw back down. Happens every single time. People will not turn bullish until all of the things are aligned, the fundamentals, the technicals, the news flow. And by then, a lot of the run has already happened. And so I think what you have to do is extrapolate away from all that and say, look, what do I think the price is going to be at some point at the peak of this cycle? And for me, that's somewhere between 65 and 160K are the logical targets

for what we should see in 2025, maybe 2026 if it runs all the way into early to mid-2026. And so at 29K Bitcoin, if it goes to 26, I shouldn't care very much as long as I have the capability to hold my position between now and Q1 of 2026. So my entire life and the structure of my fund is set up to hold large amounts of Bitcoin exposure through that window. Because I think if you hold through that window, the short-term volatility shouldn't matter. One more thing I want to say about this, because I think it's important. At some point in, I think it was early to mid-June, I turned to my wife in the kitchen. I was like, I just don't see how the S&P could go up anymore. And Bitcoin did not respond at all. Bitcoin looked dead and the S&P looked like it was going to go up forever. And so there were days where I was down,

right? The fund was down and the S&P was up day after day after day in mid-June. And then all of a sudden it flipped and Bitcoin started running. And in like one week, it wiped out all of the outperformance of the S&P over Bitcoin over the previous like month or two. That was the BlackRock week, right? Yeah, yeah. 25 to 31 kind of felt like overnight, right?

And I had been just piling into GBTC and some of the miners during that period and watching NVIDIA, watching Apple, Microsoft, everything just march higher day after day after day. It's relentless. And of course, that's what markets do. They move in a way that convinces you that your positioning is wrong and you need to get with the consensus. You need to get into Apple. You need to get into NVIDIA at the peak. You need to get into Broadcom. You need to be in those names. And Bitcoin is just not working. And literally the moment you capitulate on that idea, Bitcoin shoots up and the S&P turns down. People forget how quickly that can happen.

And that's what I think might happen in the next one to three weeks from here. Right this second, Bitcoin kind of looks bearish, right? It's trading in a bearish way. It doesn't seem to want to move up. It sells off every time it goes up to 30,000. Like a light switch, at some point that could flip and you'll wake up and Bitcoin will be 31K or 32K, and then you'll blink and it'll be 40. And that'll all happen before the commentators, the macro bears can change their positions. And if you listen to them, you end up losing money across the full cycle because eventually Bitcoin is going to 60 or 80. So why do you care whether it goes from 30 to 28 to 32 to 26 to 50? If it eventually gets to 50, you need to be long. I'll tell you this, I'm going to be really disappointed if the cycle high is 60 to 80 this time. I mean, listen, it'd be fine. It's fine. But I really do expect six

figure Bitcoin in the next cycle in 2020. What if the cycle high is 60 to 80 with the backdrop of the 2,500 S&P because we did actually suffer a much larger recession than was predicted because the Fed did over-tighten and the lag effects finally hit, but they hit in a big wave in 2024 going into 2025. Let's say it's lagged all the way out until then. But the force of the having and just the benefits fundamentally, like if you're in Argentina or if you're in Lebanon or if you're in one of these countries that has severe monetary issues, Bitcoin goes up for secular reasons that have nothing to do with macro, that have nothing to do just because it's more useful money. And so I can see a scenario where in that scenario, where you make a lot of money on a relative basis. And so your purchasing power actually goes up more. If you want to buy a house, if you want to buy a car in that scenario, the price in Bitcoin terms has gone down so substantially that even though Bitcoin is only trading at 60,000 or 68,000 USD, that your purchasing power in Bitcoin terms has gone up substantially more than an environment where the S&P doubles from here and Bitcoin goes up 5x. So you have to think about it in terms of purchasing power. And so I would love to see a Bitcoin bull run in a true recession because then

Bitcoin would be more valuable on a relative basis. Yeah. If we top at 80, but the S&P is down 50%, I will take that as a massive win for sure. So I guess it is definitely all relative. And you can't talk about what's coming for Bitcoin without talking about the ETF, of course. I mean, you mentioned, obviously, that we saw that massive move up on BlackRock ETF. You tweeted this, a hypothetical BlackRock spot Bitcoin ETF approval isn't just about price. It's also about legitimizing the entire Bitcoin space. Bitcoin miners, custodians, exchanges, payment companies, et cetera, are all way undervalued. There'll be an almost instant 20 to 100% legitimacy premium. The more levered to Bitcoin, the better. Funds like

GBTC, companies with large holdings like MSTR, and miners like Iris Energy and Cypher with massive operating leverage at higher spot prices will all benefit. So are these all basically ways that you can take a leveraged upside bet on Bitcoin's ETF approval that are even better potentially than buying Bitcoin? I mean, I know you've always focused on miners and that's sort of the approach. Yeah, exactly. So when you think about it, like if you're an institutional investor and you want exposure to Bitcoin, you're definitely going to own paper Bitcoin. Let's just call it what it is. Maxis will come on and yell at you or whatever, but none of them have ever been a CFO of a public company. They've never been Michael Saylor. They've never run a multi-billion dollar Bitcoin

fund like GBTC. All of the institutional investors have to use a third-party custodian, just part of good internal controls, good audit, auditability, et cetera, et cetera, et cetera. And so really what you ask when you want exposure to Bitcoin as an institutional investor is whose paper do I want to own? Do I want to own the Paxos version of Bitcoin? Do I want to own the Coinbase version of Bitcoin? Or God forbid, do I want to own the FTX version of Bitcoin? And so there is some counterparty analysis that needs to go into this fundamentally. And that's one of the reasons why, in addition to many others, that I thought the grayscale Bitcoin trust was such an interesting trade at the beginning of this year, particularly

for institutional investors, is because you have that embedded discount arbitrage, which of course worked, right? GBTC is up 120 something percent and Bitcoin's up 75%. So even though it underperformed in previous periods, if your first time owning GBTC was this year, you've done quite well on a relative basis. Miners are not really that fundamentally different, right? The difference was in December and January when I was heavily piling into some of these stocks, right? I have 3 million, 4 million, 5 million shares of a few of those companies. When I was piling into them, what you're getting with a Bitcoin miner is a set of

operating physical infrastructure. So you own land, you own buildings, you own transformers, you have substations, you plug into the grid, you have a grid connection, and you could repurpose those assets if necessary to AI, to high frequency trading, to synthetic biology. There are other things you can do with high quality computing infrastructure. And so you have this sort of margin of safety, like a la Warren Buffett, where you want to buy a set of assets at pennies on the dollar or 50 cents on the dollar. And you had that in December and January in that space. And so unlike with Bitcoin, where people, value investors will argue, hey, there's no margin of safety, there's no cash flows. With these infrastructure businesses, you do. Now, importantly, also, you have this operating leverage to the price of Bitcoin,

right? Because let's say it costs you $20,000 all in to mine one Bitcoin at $25,000 and the price is $29,000. Well, right now you have a sort of pretty small operating margin, right? But if the price of Bitcoin goes to 60,000 and your energy costs stay the same, you just grew your profits by some order of magnitude. And that's why you see these outsized movements. So when Bitcoin tends to double, historically, the best run miners go up 4X, 6X, sometimes 8X, right? Like if you look at, I mentioned Cypher in that tweet, Cypher was trading at 38 cents in December. It hit a high of $5 and something like 32 cents mid-July,

right? So you actually did. And I was calling out those names, by the way, Scott, in Spaces. Oh yeah, you did a year. You talked about CBTC and the miners. Yep. Cypher, et cetera. And so yeah, Bitcoin's up 75% year to date, but if you bottom ticked Cypher, you know, you're up well over 10% trough to peak. Now you had to trade in that window, right? Because it's not currently up that much. But my argument over the next two years is it sort of doesn't matter as long as you own exposure to Bitcoin that reliably provides, right, the upside of Bitcoin or more, then as an institutional investor, it doesn't matter whether it's Bitcoin in cold storage.

For an individual who really wants to be self-sovereign and be off the grid and be able to use a ham radio to interact with the Bitcoin ledger and all that stuff, just disregard everything I'm saying. But for somebody who's running a fund or somebody who's running a public company and wants exposure, these are the set of alternatives that you have. And I do believe at current prices, a lot of the top miners with low down in the balance sheet and with really good operating leverage. And that means, look, you have to have a low operating costs and you need to have a high gross margin today because that post halving, these businesses are not going to get easier. They're going to get harder. And so you need to have a good business today, a really

good business today relative to everyone else to make sure that you get profitable post halving. But if the price of Bitcoin goes up enough, it won't matter. All of the miners are going to go up and they're going to go up a lot over the next 24 months. And so again, my time window right now is 24 to 30 months, not a month from now, while I am interested in the price of Bitcoin over the next one to three weeks, because I think it's a critical time period. My real focus is how do you make money over 24 months from now? Yeah, and this news actually just broke.

I was talking about the benefit to custodians, and obviously we saw the downside with Prime Trust and BitGo was going to be the buyer. But now BitGo announcing that they've secured another $100 in seriously round at 1.75 billion valuation. I mean, they're a very strong custodian. Is this one of those situations where they could benefit massively from what we're talking about? I mean, all the custodians that survive and prove to be custodians that don't lose private keys. Yeah. I mean, like, look, I think, you I think Anchorage has really stepped away from the pack. They've run in a very conservative way. They were started by former kind of security consultants.

So they've been experts at security. In fact, a lot of their security analysis for hedge fund managers over the last five years is what I got like four or five years ago because of the funds that I was doing business with back then. They would recommend the stuff that the Anchorage founders would recommend, right? And so I took all those steps, which is a good reason why even though I got SIM swapped, I didn't lose anything. Nobody was able to access any of my

wallets or any of my accounts. And so Anchorage has done a good job. Their valuation's gone up. I think their last round, they had Goldman and had like sovereign wealth funds. And so I think they're in a good position. Bitco is in good condition. Coinbase, who we've talked about ad nauseum on your program over the last two years, despite all the negativity and all the things that sort of haven't worked, they haven't lost anybody's keys and they still hold all the Bitcoin, that grayscale and microstrategy and everybody's deposited with them. And Coinbase finally wins approval to list crypto futures in the US. How big is this? This just broke, I think this morning or in the middle of the night last night while I was sleeping,

but they're going to be able to offer futures. I'm assuming it will be extremely low leverage, but either way, this seems like absolutely monster news. Yeah. I mean, you can already trade futures with the CME, right? And so it's too good to see a crypto native firm get the approval. I think the ETF approval when and if it comes is much more critical, right? Because BlackRock saying, hey, look, we've got this ETF that we're going to offer to the masses and Coinbase is the custodian, I think is a much bigger stamp of approval than a futures product, which is mostly going to be used by institutional investors. And I think the other thing, Scott, is the futures are, in my opinion, being used right now to sort of compress volatility. There's a lot of these

trades that are sort of self-sustaining where people are sort of betting against volatility. That's holding volatility down at, in my view, an artificially low level. I think that trade's going to explode at some point. It probably will overlap with some news event in the next few months, potentially in the next few weeks. And when volatility goes back up, it will reveal that a lot of people were betting in sort of a one-way direction. Because again, like the GBTC arbitrage trade, it looks like you're picking up free money when trades like that are working. And then when they break, you give all that back and potentially bankrupt yourself if you were using too much leverage in doing those trades.

So futures, they're not necessarily a nefarious thing, right? Nobody's necessarily using it to actively manipulate, but there are people that are using it to do things that maybe make money for their funds or whatever in the short term, but they're not maybe really economic trades across a full cycle. And you only find that out when the trades break. Yeah. Hello, 3AC. Hello, BlockFi. Hello, everybody else who is using them for the cash and carry trade or who is trading the GPTC premium in sort of the same way. Right. As you mentioned, it's just a trade that has to be timed. Yeah. And that's what I think the maxis and a lot of the individual, you know,

pleb type people just, they dismiss. Like a lot of what's actually driving the market are people that are doing things for completely different reasons than they are. Right? So if you're just buying and holding Bitcoin, you're the safest investor because you've got no leverage. You've got no duration on your trade. You've got no time constraints.

If you just hold it and you don't lose control of your keys, that Bitcoin is going to buy more stuff in the real world in two or three years. I'm highly confident of that. But these institutions and a lot of these hedge funds are doing different types of trades because again, they have to use a custodian anyway. So to them, it doesn't matter who's paper Bitcoin or who's futures product. It's what they care about is capturing the magnitude of those moves, which is why I was perfectly comfortable putting GBTC in Alpine Fox because I was comfortable that Coinbase,

the custodian, wasn't going to lose the grayscale Bitcoin. And that was really the biggest risk. When I'm evaluating what instruments to hold in the fund to express that Bitcoin exposure, I'm mostly just concerned about over the next two years, where's the counterparty risk? And most of the risk has been sort of flushed out of the system. The weakest players are mostly gone with the exception of some of the offshore unregulated exchanges, which we've talked about, I won't get into again. There are a few other sort of weak players left out there, but no US institution is looking to do business with them at this point because they mostly understand now that buying paper Bitcoin from those firms is the same thing, right, as potentially buying paper Bitcoin from one of the firms that's already defaulted. Yeah, and I think that, once again, you mentioned before, since it's taking so long, the worst case scenarios are largely priced in even with those offshore exchanges.

Yeah, Yeah. I'd say it wouldn't rock the market if something terrible happened, but everybody's expecting, for example, everyone's expecting DOJ action against Binance, right? I don't know that it will or won't happen, but everybody's expecting it. I mean, as I said earlier, there's been a steady stream of negative. It's a steady drumbeat of negative news this whole year. And Bitcoin's up 75%. I mean, that I said earlier, there's been a steady stream of negative. It's a steady drumbeat of negative news this whole year. And Bitcoin's up 75%. I mean, that tells you everything you need to know. Price is truth, right?

To quote the traders. And so it doesn't really matter sort of what else people, you know, what other companies fail and what other people get arrested. There might be more arrests. There might be more failures. But I don't think that that necessarily has to impact Bitcoin's price negatively other than maybe a short-term move. And that's what I'm seeing now is like, if there's any negative news flow, it seems to be like literally like a six-hour move and then a recovery. And then a week later, you're higher. And that's telling me that we're going a lot higher in the next six to

12 months. And again, the one to three week thing is really mostly kind of a technically oriented analysis. I mean, I've been thinking about this for a few weeks now. It just feels like August, the first half of July was sort of uniformly bullish for like the broader Bitcoin market. And then mid-July, the Bitcoin price did not confirm that bullishness. And then we sort of traded down the rest of the month. Early August, it's like S&P is negative, right?

It feels like sentiment's gone super negative. The recession is here now, right? Blah, blah, blah, blah, blah. But it just doesn't feel like that's going to sustain, in my opinion. And I think it'll flip positive. It may take until like the 20th. It may take another three, four days. Like maybe next week is the week where it turns. It still feels kind of dark right now, but when it does turn,

it could turn quite quickly and we could have a very positive end of this month to confirm some of those technical levels. From your lips to the Bitcoin God's ears, my friend. I think everybody here would be really excited to see you be right on that one. Anything else you want to add before I let you go? No, nothing new, Scott. I would just reconfirm that Bitcoin's the one asset in this ecosystem that once you've fully underwritten it, it's really easy to just put in your portfolio and hold it. And I think if you do that through this full cycle, which is still going to last another 18 to 30 months looking forward, I think you'll do quite well. If you get too cute with the trading, if you try to get into some of these altcoins or some of

these NFTs and some of these other things, you can get burned. And so I would continue to stick with Bitcoin as a core holding. Yeah. I mean, as I said at the beginning, we saw Bitcoin sneeze for like two or 300 bucks downside yesterday and also went down 5%. Like across the board. Right. So if that's a sign of what would happen if Bitcoin went, say, down to 25 or 24, then you better hold on to your ass if you have a whole lot of altcoins in your portfolio. Mike, man, thank you so much. It's great to have you back. Great to have you back on Twitter. And hopefully we'll see you again very soon here. All right. Sounds good. Thanks, Scott. All right, man. Thank you. Yeah. I'll happily take 40K Bitcoin. I would either take 25 and

then 40K because I'm already bidding 25, but I would happily also take 40. Frankly, I would sell a little bit and then buy again at 25 if it came back down there. I do think, I mean, I know that someone up here in the comments, I think it was Christopher pointed out that last year I kind of made the point looking for the comment. I can't find it, but I did make the point that I thought that it was going to be real. Here you go. Scott did say last fall we would range for a year and be boring as fuck. Yeah, I did. And that's always been sort of my premise for what was likely to happen here. And pretty much happening, right? I mean, we have these big spikes, 25 to 31, 15 to 22. But in the grander scale of what Bitcoin can do and what

we can see in this market, definitely not that exciting. And I think that's fine. It's the way it always goes in the year before the halving. There's nothing new here. As I've said, you can literally like fall off, fallen on your head, gone into a coma, ignored the recession, the Fed, Jerome Powell, I don't remember, Evergrande, boats getting caught in the Suez Canal, what other disaster, Ukraine, all the other disasters that have happened. And you could open, I mean, I'll open it. Let me see. You can open this halving chart that I opened yesterday. And nothing's going to be very different, right? We're looking at the same thing every single time, right? We're right here. I do think that means we probably, like in these other

ones, get this one more dip to flush it out, as I talked with Ben at some point, and then up to new highs, up to new highs. Nothing new here. But speaking of altcoins and projects, the hottest one on the market right now is SEI. That's with a S-E-I. It's exploding up thousands of percent. I'm sure we're not going to talk too much about the token, but you can see here, say token skyrockets over 3,000% on crypto exchange listings. Here's the chart. Obviously, you see a lot of these charts when tokens drop. It's a massive move to the upside. But while everything else is seemingly boring and going down, there's a lot of excitement around this project. And of course, that means we're just going to go right to the source and ask the guy behind it. So I've got Jeff Fang here. What's up, Jeff? How are you today?

Hey, Scott. Hey, nice to meet you, man. Nice to meet you as well. So listen, I mean, maybe just really quickly give us the broad strokes, the price action to us, sort of irrelevant. Why does it matter? What is it? I mean, it's being touted now as the fastest layer one blockchain in the world. I'm sure that you have a few people who would push back and argue with you about that. The Solana guys, right? And then, of course, the premise being that decentralized exchanges are going to grow as there's a crackdown on centralized exchanges and you make them more efficient, faster, easier to use.

So give us the broad strokes. Yeah. Yeah. No, I'm excited to be here. So I'll try to make best use of my airtime. Yeah, the last couple couple days have been pretty pretty pretty insane uh so you're sort of seeing me at the the trough of a lot of this um in the in the midst of all the insanity just sleep everything uh yeah we like to get our

guests we like to get our guests at their lowest most sleep deprived uh point so that we can challenge them and and see what they're made of. Yeah, yeah, you're getting you're getting peak, peak honesty for me at this point. Yeah, I don't have time for anything else. Yeah, the launch so far has been unbelievable. And I think widespread our team has been shocked, especially during these kind of conditions during these kind of sentiments, exactly how much the global sort of community is really dialing into the Say launch. I'll go right into the action of things. I'd say the thing that, the feedback we've gotten from the community, from users that really stands out about Say is candidly just the honesty. Say is a very simple thesis. There's one core reason why the initial Say Labs, myself, my co-founder had started Say is we have one

simple thesis. We believe that the fundamental value prop of blockchains is the ability to exchange digital assets. So, period. That is the single biggest value prop. And I think a lot of times when people think about the exchange of assets, when they think about trading, they always think about finance within the lens of finance. And what's taken our team a lot of time to really educate folks on, educate partners and projects building on top of Sayon is

the exchange of assets and trading is actually universal. It is critical to every type of application, especially every kind of application in crypto and Web3. So if you look at all of the successful apps in crypto today, they by and large fall into two buckets. They're either directly in exchange. So think Uniswap, OpenSea, Blur, Magic Eden, NFT or token exchanges, and even Axie Infinity step in products and applications that people view as games. But the core user experience is the exchange of the digital assets. So speculation. That's one big bucket. The second, I'd say a big use case is speculation today. We really see that changing and really driving genuine economic improvement, but

absolutely, that's a huge, huge portion of it today. I don't say it in a negative way. I don't say it in a negative way. Even if it's going to be a massive casino, we need an efficient and well-run casino that operates at high frequency and exactly what you're trying to do. So even if the premise is, hey, crypto is just a big casino, you're improving the casino yeah yeah it's a better a better caesar's palace um the other big bucket is indirect exchanges so uh it's ones that people may not be as um as privy to uh examples would be metamask stable coins uh and ave so metamask as an example it's a wallet. However, 95% of the actual users of Metamask end up in the same destination. It's like if you took an airline, but the airlines only ended up at exchanges, only flew you straight to NYSE, because most of the users end up on Uniswap, OpenSea, Metamask swap. It's the same kind of core demand driver. So that's the simple thesis behind Say. That's why if you believe that the exchange of assets is the core value prop of blockchains entirely, then how do we solve

that problem? How do we make the user experience? How do we make it so that any kind of exchange or trading function that happens on chain can finally compete head on with Coinbase, with Binance, the exchanges that we sort of all know today. And that's the simple problem that CETA tries to solve. Well, I mean, after FTX, we saw quite a few times when DEX volume, specifically Uniswap, was larger even than that of Coinbase, right? So while there was sort of fun about centralized exchanges and DeFi was thriving, we've seen those moments. Right. But now we have the flip side of late where we saw the curve finance situation and the loan by the founder that could have crashed all of DeFi. So, I mean, do you still think that DeFi is ready for the prime time, that DeFi is actually ready to take on all of that volume that is missing

from centralized exchanges. Let's say, you know, we get another half a billion people coming into crypto on the next bull run. Is DeFi going to be a shit show or is it going to actually be able to function? Yeah. Yeah. I think that's the quintessential question. The short answer is absolutely not. Not even a chance. That's precisely why something like Say needs to exist. That problem needs to be solved. Whether or not it's Say or other infrastructure teams that solves it, that's the single most important piece. So if we take a huge step back and look at technology and innovation cycles broadly, it by and large happens in what's called an app infrastructure cycle. So a big jump in infrastructure enables brand new applications to be built,

which then forces improvement in infrastructure to enable the next big leap. So the first big part of the cycle was Ethereum and a lot of the big public blockchains. That enabled a lot of decentralized applications to get built. So Uniswap and a lot of the big public blockchains. That enabled a lot of decentralized applications to get built. So Uniswap and these kind of apps finally hit part of market fit. In fact, if you look over the last two years of the cycle, Uniswap is one of the few apps with deep part of market fit. That means you're not giving out any incentives and people still use this. Effectively how normal applications work. We use Google Maps, but we don't need to be incentivized to use Google Maps. Once Uniswap

is found in that deep part of market fit, there's only one thing to do next. Scale. You know that people want to use this. How do you get this in front of more and more people? And how do you support them? That is the problem that we're at right now. That is the core problem that Say wants to address. So I'd say without someone addressing this problem, it is in fact impossible for DeFi, but any kind of application broadly, like I'd say gaming, NFTs, maybe folks, things that people don't view as trading related are deeply connected to trading. That's the core for demand driver. Yeah, I agree with you that it's all about the exchange of digital assets and that more things will be tokenized in the future and that we're going to need to scale.

So what makes, say, technologically different? I mean, I think everybody who follows here is pretty crypto native. We're all aware of the trilemma, right? The fact that you either have to give up security speed or cost, whatever. You have to give up something to be faster or to be more secure or to make any of these claims. And that's been a problem for a lot of these blockchains. So how do you actually make the claim? What's different that makes this the fastest layer one? And is that a claim that you're making or is that just a claim that people are making? I don't even know, to be honest. No, yeah, it's a fully testable. The finality, per se, is indeed point blank the fastest.

In fact, magnitude faster than any other chain, any other piece of infrastructure that is on that is live today. So, yes, all of that stuff is fully backed. And there's plenty of evidence on both the website as well as a lot of research reports. To circle back to your core question, I'd say one of the big reasons why SAE has resonated across a lot of founders, applications, and teams building on top, because that's the end of the day, the core core. If you were to look at a public blockchain as who is the core user base, the core customer that's important is developers. Who's most important to Ethereum necessarily?

It's some of the folks building on top, the Uniswap. That's what brings the users in. People don't necessarily use Uniswap, use Ethereum because of the token. There's no apps on it um so it what has been really resonating with a lot of the founders and builders is the honesty of the say value prop you know the the team will go the foundation will go into a conversation with a gaming team and say, look, the focus for say is and will always be the exact same.

How do you offer the best user experience for applications to do any kind of exchange of assets? And gaming teams are first, well, why don't you optimize it for gaming? What's the benefit there? No. It's the exchange of assets because that is just as critical to the

distribution and the growth of your game because that is just as critical to the distribution and the growth of your game than it is for an exchange. You may not like it, you may not want it, but you have to embrace that speculatory, the exchange and trading piece of the user base. In terms of how that happens, and some of the more of the specifics, the focus in the value prop of Say is very user-centric. So when you look at other public ledgers, blockchains, a lot of them are focused on a technical advancement. Hey, we are trying to solve for parallelization. We're trying to solve for consensus improvement.

Say translates all of that to the user. The only thing and the only problem that says focus on solving isn't necessarily a technical issue. It's a user issue. And that's maybe one of the big things that gets lost in a lot of projects and building in crypto and web three today is they get too focused on solving exciting technical problem without mapping it back to, okay, what's the problem that the user faces? You know, it's kind of startup 101.

Yeah. UX, I mean, UX UI is atrocious in crypto. I think we all agree with that and that everybody wants to build faster and safer and secure, but they don't think about the fact that nobody actually wants to use it, right? Literally, it doesn't matter how fast it is if only 100,000 people are using it, right? I mean, it is scaling for the future, but we've had sort of this promise. It's frustrating. I think we're just early, but this promise for two cycles now

where we would need this faster and just nobody's using it, so it doesn't matter, right? And to the point of what you said, you get a bunch of traders that are speculating and it's kind of this player to player and player versus player environment. And that's really been the use case. But I can see, I mean, it says here, same maintenance live after test sets.

He's more than 7.5 million wallets created. That's a lot. So why are people creating these wallets? How are you seeing that many? Is this for speculation? I mean, for people to trade? Is this for real usage? Where are these wallets coming from?

Yeah, so I'd say the core of SayLab's team is primarily based out of most of the United States and Europe. And then more and more of the foundation, as that team was getting built, they realized that a big, big part of the user base also grew from Asia. So SAVE became a lot more global, candidly, a lot faster than we were ready for, that we were expecting. So I'd say a big chunk of that usage also comes from some of the global communities. So Korea, particularly, a bit in Turkey. So these are just examples of a few communities

that we never really intended on, but I'd say really grew. And this sort of user value prop really resonated with them. I think one big component that has helped with user traction is simplicity, which is always something that I think a lot of good, really, really good qualified teams get wrong in crypto is they expect users to go through this whole process, this whole educational process. Here's how it works. Here's what you have to do.

Boom, boom, boom, step by step. Say it's very simple. Come here. This is the best destination for you to exchange assets. And that's resonated across all of the teams building on top. So here's where you exchange any kind of asset. Can be NFTs, can be tokens, doesn't matter. Can be risk.

You can exchange any kind of asset here. And I think that's the simplicity. It only takes one sentence for users to really get it. And then what does that mean in terms of the technical roadmap? A ton of things. In fact, it includes things that other blockchains are entirely focused on. That's just sort of part three of the roadmap of Say. Because in order to solve that problem,

the ultimate problem of an exchange or a trading app building on Say and being able to operate exactly like Coinbase, that includes a lot of big technical advancements. So that means parallelization. Say it's one of the only chains to do parallelization. Say it's the only chain that does twin turbo consensus. It's a custom built consensus where a lot of improvements are made

that no other chain has done to really speed up things without as much of a trade-off. So there are a lot of things that the engineering team has broken into. It doesn't always come with the exact trade-offs. There is some trade-off, but the trade-off becomes smaller and smaller as we continue to experiment, as you see more and more changes happening at the infrastructure level.

I can tell from the comments that you guys have some critics. They're probably trolls and bots. I can't really tell. But man, there's a lot of people here who are really angry that I'm having you on the show. One guy's over here accusing me of getting paid by you guys to have you on the show, which is obviously not the case. Why are they mad? Can you tell me why people are angry? Did something happen that I completely missed? Yeah. So the SAFE Foundation is a team that handles any potential token distribution going into launch. I think that the biggest priority for the foundation is get the SAFE token into the hands of as many stakeholders as possible. So the network continues to grow and decentralization globally. I think a lot of folks are eagerly awaiting some kind of token distribution, although not necessarily directly involved. Yeah, understandably, in terms of all the logistics

that go into planning something like a mainnet release, it means you pretty much need like all 10 types of ecosystem partners all aligned at once. It's like the stars aligning. So it's much, much more of a complex launch than let's just say launching an application. Not to say that in one's particularly launching an application isn't difficult.

It's just that you kind of need all the stars to align at once. Because if you have one sort of ecosystem partner mismatch, let's just say like a single application or a single wallet or a single validator, it can really push things back. So the teams, that's why I sort of look like a mess. Our team's kind of scrambling as much as we can. I just see like the same comments over and over again, which means it's probably bots, like no airdrop, no community, no airdrop, no community. Was there an airdrop that was promised that didn't happen or something? From what I understand from the foundation,

it should be a matter of time. Okay, so calm down. Calm down, guys. Well, Jeff, thank you, man. I look forward to seeing where this goes in the future. Trust me, I'm not unused to having trolls in the comments. They're still saying, what about the airdrop? He just told not unused to having trolls in the comments. There's still saying, what about the airdrop?

He just told you it's probably a matter of time. Just so you guys know, even though you're a bot, I'm going to address you here directly. Jeff, thank you very much, man. Go get some sleep. I hope you're able to rest

and I hope that everything sorts itself and works out. Obviously, there's a hell of a lot of excitement. Investors should be happy. Price is up and you have a whole lot of traction. So I hope to see it continue in the future for you you it's an honor to be here scott thanks for taking

the time thank you jeff oh you guys are aggressive over there man fun fun by the way just to be really really clear for dw whoever i'm not a fucking bot uh who said did scott losing millions in celsius really lower his standards to this? Causation is not correlation, you douche. Also, that's the, anyways. Yeah, you made the accusation that I took money to have them on. It's so dumb.

I just want you guys to know very clearly, I have sponsors with big fucking red logos in the corner that you can look at any single time transparent. But I do not, do not have guests pay to come on the show. Dumb. Do not. It's the hottest thing on these streets of crypto right now. So we thought we'd bring the guy on to talk about it.

And to be quite honest, I thought it was interesting. So if you didn't like it, come back tomorrow. Come back tomorrow. We'll do some different shit. You can pretend it never happened. So anyways, guys, that's all I got for you today. Heading over to Twitter spaces in about 20 minutes. Should be awesome.

I didn't even lose money on Celsius. There's Voyager. Voyager. Anyways, guys, that's all I got for you today. I will see you tomorrow. Peace.