The Wolf Of All Streets - Bitcoin Rebounds Massively after Bloodbath | Crypto Town Hall

Episode Date: January 14, 2025

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Morning, everybody. Happy Tuesday, January 14th here at 10.20 a.m. Eastern Standard Time. Welcome to Crypto Town Hall. We do this every single weekday at 10.15 a.m. Eastern Standard Time. And what a difference a day can make. Bitcoin rebounds massively after a bloodbath yesterday we were lamenting price action dropping below 90 000 it had just happened around 9 40 a.m about 30 minutes before the show and we had calls for 75 and 70 and 80 and 85 now you go on x and we're quoting tom Lee heading straight to $250,000. So by the way, both of those things can happen. We could easily see $80,000 this year and $250,000 this year. So I think that it's all about timeframe,

but incredible to see how fast sentiment shifts in the crypto space. Within hours, actually, yesterday, we were, I think, below 90,000 and then back to roughly 93, if I remember correctly, maybe within one hour. So clearly, moral of the story, whether the bottom is in here or not, there was a hell of a lot of liquidity and buying action just around $90,000. And that's the kind of rebound and reaction you want to see from a level like that if you are bullish and believe that you are in a bull market. Before I jump into the panel, I just want to review a couple news stories. I always forget to do this, but after all, this is supposed to be a news and breaking news show. I think one of the stories, obviously, was Trump preparing several crypto executive orders on day one.

The one that people are talking about the most will be the overturn of SAB 121. For those who don't remember, that was the absurd memo from the SEC, not even a law, but before Chevron was overturned. You might remember that the regulators in the United States were allowed to just say stuff and act as if they were the law passed by Congress, not the case. But SAB 121 was the directive that said that anyone custodying Bitcoin, any institution would have to list it as a liability rather than an asset, meaning that let's say they wanted to custody an ETF that had $10 billion.

If they were going to put $10 billion on the balance sheet, they had to write it up, put it as a liability, which meant they had to somehow have $10 billion in cash on the other side of the balance sheet. Absolutely absurd, impossible, stupid rule. Congress agreed. Senate agreed. They both passed and then Biden vetoed it, for those who don't recall, which made absolutely no sense. Well, Trump's saying he's going to fix that on day one with an executive order. Some nice housecleaning that should allow the larger institutions to participate in Bitcoin and to custody it. You might also remember that somewhere in there, there was an exemption given to Bank

of New York Mellon. If you were ever curious as to whether the SEC and the United States government picks winners, that was very clear evidence that was happening. Other big stories, Tether moving headquarters from the British Virgin Islands to El Salvador. We have Meta's board advised to buy Bitcoin with Treasury. Nobody necessarily expected that to happen. The largest bank in Italy buys 11 Bitcoin, $1 million euro, 1 million euros worth of Bitcoin, about $1.03 million, saying that they're testing it. But this is the biggest bank in Italy adding Bitcoin to their balance sheet. So we are seeing

this happening all over the world. Of course, we have BlackRock's Bitcoin ETF launching in Canada. We had a report by BlackRock saying that Bitcoin adoption is outpacing the phones and internet. And of course, finally, maybe this is the best one for triggering Giddings, Elizabeth Warren encouraging Besant to be strict on crypto. Guy hasn't even gotten his job yet. And Elizabeth Warren is already in the peanut gallery screaming from the sidelines from her place of irrelevance that the treasury needs to crack down on crypto. Of course, we had JP Morgan CEO Jamie Dimon effectively saying the same yesterday. Okay, I know that was a lot, but it gives us our five-minute summary.

Let's first dig into what's happening here with the market, and then we can move on to some of the bigger issues and the stories. I mean, Dave, we were sitting here yesterday. It was 90,000 depression. It was 90,000. We were excited. It was 89,500. We were going to $5 immediately. And here we are back, you know, trading 96, $97,000 and in the range.

So I can't talk for long. I'm on a boat, actually, with friends but uh we're still in no wake zone so you can hear me but all i want to say is what i said yesterday is still true we're in a range we like to stay in said range until uh the inauguration and we see what he does uh panic is silly uh panic is is for losers you know, people like you who bought on the dip are going to be happy at the end. And, you know, in a trading market, this is what you expect. The direction is up until proven otherwise is really the point. I was saying it yesterday and I was happy. I was in another space in the afternoon. I made the point that I was so glad that all three speakers before me were all bearish saying, oh my God, doom and gloom, crowing about their shorts, et cetera, et cetera.

And yeah, I mean, you know, when I hear stuff like that, I just laugh and it just made me feel good. My exact words were, I'm happy that everybody's bearish because I always get nervous when everyone agrees with me. His actual words were, have fun staying poor, I think is what he said. No, Dave, no, no, I don't like that. I'm kidding. I'm kidding. I don't like that. But but the but the but the point for the listeners is listen, if you have a thesis, unless something changes, don't get yourself shaken out of it. Meaning set your stops in a place where where if you're doing a short term. Meaning, set your stops in a place where if you're doing a short-term trade, then set your stops tight. And if you're doing a long-term trade,

then just don't be over leveraged. It's really that simple. And as many times as we all repeat that, people keep falling into it. Look at how much got liquidated yesterday. And yet today, if you look, liquidation's on the short side, despite the fact that we're way higher than we were when the liquidation started, it is still less. So people keep going long and getting liquidated. And the shorts are generally smarter and they're not quite as crazy. Makes sense. I can hear the captain in the background. So we're going to let you go do your boating while all of us freeze elsewhere in the world. Paul Fulis, the two of you, obviously, technical analysts

watching the market. Maybe Paul first give your take and then Fulis. Hey, Mark. Go ahead, Paul. Hey, Scott. Sorry. I've been just following the rates markets and that's where my expertise is and my concerns. Like, I just view it as, you know, looking at the, I guess, federal budget. And I said this on another space is like pre-COVID, we were at a four and a half trillion kind of budget. Post-COVID, at COVID, we're at seven plus trillion.

And the question is, what does a new administration coming in, are they going to go back to that four plus, you know, four trillion dollar budget or kind of like stick at the seven trillion? And that's really kind of thing affecting rates and ultimately, you know, people losing, you know, the people losing interest in the dollar and focusing on Bitcoin. So I don't see the government really stepping back. It's just going to be too much. So we'll continue to see rates higher, inflation higher, and then kind of a need for Bitcoin. So that's the only thing I'm kind of looking at right now these days.

Paulus? Thanks, Scott. Yeah, I mean, it's a tale as all this time, isn't it? People capitulating at what is effectively support, range lows, weak hands transferring money to diamond hands or those who had conviction all along or more conviction at least than those who sold um i mean i said it uh a number of maybe not the last call but the call before that i felt like btc was just setting up for a range um there was an interesting fractal that i pulled a few times going back to january and de and December of just a year ago where we had a very similar thing. It's almost spooky how similar the fractal is playing out where we had a range that chopped

up a bunch of traders who were expecting either higher or lower, followed by a low deviation, which kind of knocked out a lot of the long side of the books. And then price continued to chat higher, kind of in accordance with the high timeframe trend. Kind of seeing that now, I mean, really nice buyback off the lows. Someone mentioned, I think it was Dave mentioned liquidations there. Yeah, we had like $900 million of liquidations yesterday, majority of which were on the long side when we spiked down

to 88 or 89k, whatever it was. But also quite a lot on the short side then was guys trying to short that balance, which is never going to be a good idea, basically shorting support. But yeah, I mean, there's a lesson in there about leverage. There's a lesson in there about conviction. There's a lesson in there about weak um there's a lesson in there about um about about uh weekends and capitulate capitulating your bags i had guys on my stream yesterday asking me whether they should sell their long-term spot holdings this is just before we got the bounce now btc was was uh was bleeding and heading towards uh sub 90k guys were asking should they sell their long-term holdings with the expectation that they would be able to buy them back lower the most dangerous

the most dangerous notion in investing by the way okay if you want to be a trader do whatever you want but i'm gonna sell to buy back lower is the guy who buys at 150 every time yes exactly and that's exactly what i said i, you're playing with fire there because especially in crypto, it doesn't take much to set off the tinderbox and to get things exciting again, which we basically saw. So, I mean, I advise that guy. I hope he didn't do it in the end. But I said that that's a it's a fool's game because you're really looking for tiny percentage gains like on your spot bag where where you might miss a huge upside move and the last point i want to make is just regarding the ai agent uh coins um i'm sure many of our

listeners will be aware that coins like ai xbt virtual uh a16z we had uh just a huge effectively like a capitulation event on these coins i think ai xbt was down like 65 or something in two weeks virtual was the same down 60 in in a week those coins have bounced so hard to the point where ai xbt now is like oh i'm just looking at it now it's like less than five percent away from an all-time high it has bounced in the last 24 hours it has bounced 75 percent and something that i've been saying uh this month in particular if you have a conviction in the ai agent meta and the ai agent narrative going into 2025 many guys are saying it's going to be the narrative of this year if you believe that the ai agent economy is going to be worth

10 or hundreds of millions or even billions right then picking up long-term positions here is is a no-brainer as far as i'm concerned i mean maybe xbt has already kind of moved but looking at other coins here uh these are blue chips that were down 60 70 percent uh their first major capitulation event and bouncing hard now i think those coins are a no-brainer in terms of long-term holds. So we should have had you on yesterday. We should have had you on yesterday. Exactly. Exactly.

Yeah. Yeah. Bounce back 75%. I would have loved to have had you tell me that yesterday. I would have bought all that stuff. And for people who are wondering kind of what you're describing, if you're wondering how markets move and why charts quote unquote work or any of these things, when you have a key level, like a 90, 90,000, the reason you see all those liquidations, and then you see

all of this incredible buying action is not just because of active traders, but also because of passive traders who have certain kinds of orders sitting. And then of course, you might have actually someone who wants to buy pushing price lower to have the liquidity to fill their bids. So I don't think people understand that that's how this often works. But if price is 91,000, and you know that there's a ton of stops right below 90,000, because retail traders tend to put their stop just below a psychological level. Well, every time someone stops out, that becomes a buy order because they're selling, right? And then on the other side, you're looking for other sellers, which

is people who are going to go short when a key level breaks. Those then become liquidity for you to buy. So when you have a big whale who wants to fill a big position, they may actually be the ones selling down into their own buy orders. And to me, that's what this move looked like, a classic sort of liquidity grab. And I just think that when you look at charts, you have to understand that there's going to be areas where there's tons of liquidity with people. It happened on the upside. If you're looking to sell, you might have to actually buy price up to a point where the opposite happens. But you kind of took us, Foles, into the altcoin market. I think that a lot of people still, even watching all this price action,

say, you know, when alt season? We got a couple masters here, Gaurav and Vineet. People might not know this. I don't really talk about it much publicly, but Gaurav and I are not only close friends, but actually over the past cycle, I've learned the lesson that there's a lot of things I do have time to do and watch the market 24-7, 365 is not one of them. So actually his company, TVMM, handles all of my research and

my entries and exits. I don't actually generally do my own buying and selling. He handles that for me and I trust him implicitly. So if you're wondering why he's on stage and I would trust someone like that, well, well, here he is because you know, if, if it's a three o'clock in the morning on a Sunday and something needs to be done, I'm not going to be paying attention. And his team always is. So, I mean, Gaurav, you know, he's talking about AI agents here. I think it's over a lot of people's heads,

but it's becoming more of a sort of, yeah. Yeah, it's like up to two minutes before this call started, I mean, this space started, I was with the AI16Z team and they're launching other products and they're setting up the whole product release sequence and the plan. So, you know they want the setting up

everything community support whatnot um so you know that that's how amazing the space is growing and i have no doubt that this would be the narrative of the of the bull run not because of the memes and not because of all the fun that's happening. But the essential thing that I feel and being a VC for 16 years and watching multiple trends around, you know, coming in and going out, I think we are at the brink of changing UX on internet. Like the UX of the internet is changing for the first time. I mean, for one more time.

And what's happening this time is instead of you trying to get on a website, trying to find what's useful for you, let's say let's use the best use case in reference to the space, which is, let's say, using an exchange. You'll go in and try to find limit orders and try to find what this order means and more sophisticated orders means and how options work. What we're looking at is go on this interface and say, I want to acquire $2 million worth of Bitcoin. And I want to sell it at 200. Every time it hits 200k, of course, we all wish. And then I want to buy a 200k, sorry, sell at 200k and buy it

back at 100k. Or maybe just set up a tracing order. Sorry, I got too technical. Let's just see every time it does a 5%, sell my 1%. Think of a prompt that wobbles in your head when you go through multiple charts, right? And just type it, and that will happen. So this UX is changing, and that applies to every single aspect of internet. And of course, there has to be a lot of training and user onboarding that of course, can happen through the means that we're going through in the current cycle. So I have no doubt that we're about to, to enter, we have already entered, but we're about to see a whole new era of AI awakening, not in just I mean, not just the UX part, but of course, a lot of solution and research part. But I think, yes, the value cycle has triggered itself.

And, you know, Vineet, my friend here, has a stellar background of investing. His last previous funds have made themselves whole with just one or two out of the 99 or 96 investments. And at this point, when he's spinning out a new fund I think he would have better things to say about it we need passing out to you your new fun you're launching today right Sigma literally yeah the fun got announced just four hours back on coin desk uh again it's another hunt so this is my third one you know I did Phoenix VC and I did cipher Capital when uh Goro mentioned it was actually one project which is uh suey our suey bag is worth 100 million dollars and uh the total fund was around 80 million deployed so yeah we got uh very lucky with that but we

also had these amazing things like say network was part of it uh better chain is part of it so can you call me i just in fact can you call me and gora just call us next time actually you know i'll throw you like a thousand bucks. It's great. Come on, let's go. You know, the fund did a six sex in the last two years, which is a bear market. And if Scott remembers, I have goes on his podcast when I do, I think the bear market was at its top and everyone was saying it's the end. And he said, us needs to come in. I was like, doesn't matter.

The market's going to go back up you know those 150 200 k's will happen and kathy woods is not a fool saying it's a million dollars in the next 10 15 years so you know people are very uh emotional in nature uh as soon as it goes to 18 000 they think it's going to zero and as soon as it goes over 100 000 they think it's a million dollars next. But coming to the AI agent part, I actually had a podcast with Eran just a few hours back. I think, you know, for me as a value investor, it's all about what are people using and what will get people on board. You know, when I look at DeFi, DeFi has not even kicked off yet.

You know, when you look at identity, it's still growing. You know, when you look at games, everyone says games are dead. Trust me, let's wait for something. And I think they've stopped saying that with off the grid to some degree. I will say it since we do have finally one example of a legitimate AAA game. I think there is hope in gaming a little more.

So I'm an investor to off the grid personally as well. Again, you know, two years back when you were in GDC and people were talking about building infrastructures where three web two gamers don't have to think about wallets and last year when people like my pet hooligan were talking about

IPs you know about this rabbit or it was nine heroes talking about these cats I think gaming is evolving six months back when we were in cypher capital we were the top five investors in gaming you know people were saying it's a dead thing but it has bounced back now when i come to ai agents this is a very controversial one where people will beat me up how many of us have actually used any of these ai agents have you speculated with the coin to the different thing but have you used these ai agents is what i'm asking and this is what i asked in fact in this podcast i have asked the users to tell me the ones which they have used to do something in their life you know i use chat gpt to build up content understand but have you used any ai agents gaming ai agents was another thing where you train your ai agent to build a character and the character

goes on and wins against i don't do that in a game i take the playstation and play it myself so i have controversial views that yes it is a fad hopefully something good comes out of which we which we start using like in trading they are saying ai agents will be used to emotionlessly trade for you but again you know it's too early to predict i'm still more on the consumer focus sides which will get people normal people to do normal stuff that's my views on it yeah so i think you and gorov can both be right but i think that uh in crypto we always see these sort of like bubbles gaming was a perfect example it was supposed to happen last cycle and it's actually happening this cycle but you everybody got excited about it last time we saw these massive pumps then it goes through this bear market it's dead and

then you start to see legitimate things to me like my default setting is that ai agents will be like that i'll see this massive hype around them and then it'll kind of die and then we'll see the actual use cases like vinit to your point like where people actually use them right and then we'll see absolutely and i was not talking about the means anyways like i said it starts with onboarding with means but eventually you know all this ux part that i explained agree uh will kick in with time i'm actually in sync with beneath instead of uh being on the contrary yeah so gaurav one of the things that i see in the cycles is you know when you look at the 2017 cycle you know people were planting trees in africa and raising capital then you had the 2021 cycle where use cases like avian compound came and people were saying crypto can be used for

something you know i was lending and borrowing on our way then you have the new cycle where users will come on board so thing is you know ai agent this is probably the first cycle where everyone's raising capital next cycle they will actually start using uh the use cases and adoption will come probably after that so i it can happen faster as well so i'm not saying that these are not the future but they will adopt and uh build up something new and that's where the alpha lies because 100 percent 100 percent a lot of like the amount of just one last thing the kind of the amount of projects um i'm getting pitched in terms of established large scale, at some point of time, billion dollar company, now maybe not, and super, super well established people in crypto. up with their ai interface so they just want a single i mean a chat gp t like interface and people not getting into the trading activity and simply like posting it there posting the requirements there that's one i'm looking at multiple applications around entertainment

um and other utilities even even moving coins from one one to another chain so i mean i'm like again i'm all game to the utility thing i mean uh mario and me had this conversation for probably two years when when he was trying to push us and convince us for nfts and you know and we said like no nft this shape of nft is useless yes there will be use case and we'll jump into it. But these are this is stupidity out in the market. So like, you know, again, a decade and a half plus of an investment experience, I'm actually not at all into, into memes and these early use cases and fully, fully bought into the intrinsic economic value of a token. So fully in sync. That's it. Gareth, you had your hand up.

Yeah, I was just going to say, it's really interesting that you're diving into AI agents a bit, because we had an internal call with a very talented team of developers that we're working with, and they were showcasing some AI agents that they've been busy tinkering with. And I think this is true right now. The narrative is very much like it shifted from meme coins into AI agents. And most of the AI agents that we're seeing are simply just LLMs with command prompt ability to go and tweet and post things and interact with people and be an LLM and generate text that seems like it's a human, right?

And right now, I'm struggling to see the intrinsic value of that. And I very much agree with both Gaurav and what VB was saying in terms of, you know, these AI agents need to get to a point where they're like infrastructure and they're doing very useful things whether that's balancing your actual trading portfolio um you know or doing meaningful things rather than just you know truth terminal pumping up goats and then everyone making loads of money i mean it's great to make a load of money but it didn't really do anything other than automate the management of an X account and use its ability to generate coherent language to mobilize a load of people to buy a token. And I'd love to see this AI agent sort of mania move towards something that's

useful. And I would love to see it happen in 2025. And I think there's a lot of people that are obviously building great tools, but at the moment moment it just seems like it's a trend and lots of people are jumping on that trend just like they were six months ago, everyone scrambling to launch the latest meme coin with a great community. Now you can leverage artificial intelligence tools to create content that gives you the illusion of community and a very vibrant and busy community.

But meanwhile, it could just be a horde of bots being managed by AI agents. And I'd love for it to be more valuable than that for our industry specifically, because this is supposed to be the future of finance, just not the future of automating and generating content that leads to a certain amount of people making a load of money. And that's just my two cents on the AI agents today. Nicole and Matthew.

Yeah, I just had a quick note on kind of the gaming tokens, and I guess the thesis might apply for the AI agents as well. It seems to me like a lot of these projects, in my opinion, just kind of go down the wrong structural path. The idea is like, hey, let's launch a blockchain and then build a token on top of it. But the problem is, is most blockchain users out there and most of the devs in this space, researchers, not a lot of people are necessarily gamers. So it seems like you're creating a game, which is already hard enough to do, to make a popular game. There are so many different gaming developers who are struggling to even make any kind of popular game right now, let alone one that has all these crazy intricacies to it with blockchain technology involved. But then it's being pitched to people who don't even really game and being like, hey, adopt this game that might not even be really fun.

There might not be any users. And it's on this kind of micro cap blockchain with not a lot of value there. To me, the holy grail of gaming is like when a game people play has functionality in which you can buy Bitcoin or you can buy something like a top tier digital asset or access some marketplace that doesn't silo you into some smaller community. So to me, it just seems like the most important thing for any game is to be pitching to a gaming community that already likes the game or already has an economy of scale there and already has users. And then like bringing cryptocurrencies, native assets that have value, that have these deep ecosystems already built out for them. Like, I don't think it makes sense to reinvent an entire DeFi opportunity for a game when we already have

DeFi opportunities built out and we already have very liquid cryptocurrencies that can be incorporated? Like how do you get something like Bitcoin or XRP and GTA? How do you make it so you can fuel these economies through those platforms and build natively there? Because that's where the users are. That's where the gamers are. That's where people want to integrate.

It seems so risky to say, okay, let's create this brand new game that might not even be fun and have a token want to integrate. That it seems so risky to say, okay, let's create this brand new game that might not even be fun and have a token attached to it. It just doesn't seem like it's a great way to aggregate users and liquidity. Well, I think there are always, Matthew, I'm gonna let you go, but I think there are always two paths for gaming that we looked at last cycle and kind of said not that these things are happening. And that was either someone creates a off the grid type game that,

you know, has some sort of crypto native functionality, but that's abstracted away. So like, you don't know it's a crypto game that had to happen, right? And I think we saw that. And the other side, Mikkel, I think is what you're describing is like,

when does Fortnite or GTA or one of these just incorporate crypto in some way who already has the audience? And that side, I don't think it's happened yet. Right. Yeah, I think it's a great business just to have a platform you could bring to some of these already developed games for them to be able to incorporate some kind of native economy or some kind of native functionality that way you're not taking game risk you're just saying hey if you want to be able to

adopt a system and you don't want to do the dev work to build it out yourself like this is how you can kind of adopt a more neutral approach to incorporating this technology into your game rather than trying to build out a whole game and then wondering if anyone's even going to find the game fun or you even have users for it. Yeah, because that's why that couldn't happen last cycle, because building a good game takes literally years and tens of millions of dollars, if not more. Right. So it makes sense that it took until now to even see one game that starts to bubble like that. Matthew, go ahead. Hey, good morning. Yeah, to Mikkel's point, I think that Grand Theft Auto is probably going to be,

it's wildly speculated to have some sort of crypto integration in it. And that would be a pretty big catalyst for adoption, just given the volume of people that play it. But on the side of like investing with AI and using agents for that kind of work, I think it's really ironic that the group of folks who are, you know, so adamant about not your keys, not your crypto, are willing to hand over their crypto to untested, unverified,

and like sort of new based AI agents that are that are going to be trading on their behalf. And I would just caution people to be very, you know, very use very small amounts or test these out and try it before you put lots of money into them. Because we really it's it's really been so new since these things have come out. And we don't really know if they run rogue, if they're any good, like you can only back test so far. And I think it's just really important for folks to internalize, like, you can't get away from the work required to invest, like you have to do the research, you have to do the fundamentals, you can't just pass this off to some AI agent and hope and pray that you're going to do 6x, 10x, 100x better than the person next door. That's just not the way it's going to work. You're more than welcome to try it. But

it's a terrible, terrible strategy. It's just the next get rich quick scheme. In case you guys don't know, Matthew is our resident registered investment advisor. So he's going to come on and warn you about risk as part of his job, fiduciary duty to our audience. But yeah, to me that Matthew, I think you really just summed it up. It's the next, like, what can I get rich really fast on casino lottery ticket? I'm going to throw in $100 because some influencer said he threw in $100 and became a millionaire. Right. And at the end of the day, like, it's not going to go that well for you or for 99.9% of people who haven't done the work. In fact, because it was mentioned about AI agents and investing in the last podcast, for 99.9% of people who haven't done the work. Vineet.

In fact, because it was mentioned about AI agents and investing in the last podcast, Eran specifically told me, so is the VC business going to get completely automated? Again, you know, yes, maybe in trading, AI agents can help remove the emotions out of the game while you're investing. They can see the trends, they can see the news and build all about investing.

But investing is also long term, where probably an AI agent can never meet a founder and understand how great that founder is and what is his vision. Is he trying to actually build a billion dollar startup? In fact, what I see a lot of times with a lot of influencers is that they end up making a lot of bad investments. You know, Sui, initially, how many influencers were in those deals? How many were there in off the grid? The point is what AI agent can replicate

is me meeting the founder and understanding what he has done in his life. And does he have the capability and capacity to actually build what he's promising on? So yes, maybe in trading, AI agents are great, but in investing, you need a human touch where people understand people and people understand people's capability yeah it's not like i mean listen ai adds uh interesting and

potentially beneficial element but it's not like algorithmic trading and taking the emotions out and letting a uh algo or a computer trade for you as a new thing i mean what percentage of i wonder maybe dave tal you might have a guess what what percentage of I wonder maybe Dave, you might have a guess. What percentage of stock trading do you think is algorithmic and is not executed by a human being or you could jump into it doesn't matter. But what percentage? Yeah, I mean, the first thing is, there's, I mean, one of the one of the co authors of the transformer white paper made a quote, and I truly agree with that. I think most of us will do who have actually used AI in real life and have tried to solve things with it.

AI is a great pathfinder. If you know where you have to go, it cannot lead you or tell you where to go. So having that as a basis, it won't. I mean, that's the current state of it and by the way the the cto not mira but the latest cto of open ai has already published an article stating that we have almost hit a wall uh in terms of the smartness adding smartness to the to the ai to the llms uh for now now having said that platform um it can be trading, it can be investing, and you can approach a million job or million professionals, and they'll always be able to call out the limitations

of AI against that profession, because they know, or probably have used, so they know the difference and intricacies of their job. And that's, let's accept it. That's the reality of AI for now. So it's only a good pathfinder. Like Vineet said, it can remove the emotions, but it really, really can't tell you where to go. It's confused enough, as we call it, hallucinated. About algorithmic trading, I keep repeating this statement almost three times a day,

being in the business of market making and trading, got to make trading i i keep repeating this statement almost three times a day um you know being in the business of market making and trading where we say if trading could be solved by by ai sam altman wouldn't be busy solving human interaction he would just use all his firepower all his ai smartness team a, and simply solve the trading market and mint money day in, day out. Is he doing it? Is XAI doing it? Is any of the smarter AI companies doing it?

Actually, no. And in the last 10 years, I've seen, I don't know, 500 plus proposals of algorithmic trading companies having PhDs and whatnot and whatnot. And only 1% or 2% have actually delivered real results. proposals of algorithmic trading companies having PhDs and whatnot and whatnot, and only one or two percent have actually delivered real results. And those results, guess what, are essentially trading strategies of human coded into an AI or an algorithm, right? So there is a major human element. So I don't have a precise or a profound answer to your question, Scott, how much trading has shifted to AI?

I don't think the modern LLMs have actually solved much for trading. Yeah, to be clear, I just meant more like pre-AI algorithmic trading, right? Just high frequency trading. Yeah, let's call it portfolio management with AI 16Z kind of shit, right? Now, in that, I think the major play right now is um is not real trading if anyone is following uh ai 16z dow's fund all of these platforms closely the real value is actually not created in trading and in fact there have been instances where the value of uh you know the drawdown has been 80 percent uh the real value is actually created on the hive where new projects are allocating 50 to 90 percent and simply donating that supply

to a ai 16z uh fund um so that's a that's an information an important piece of information for those who actually haven't uh seen under the hood uh so it's not the trading value that everybody is trading on you know, or betting on. I think, yeah, that's everything from my side. Like trading hasn't really been automated by these bots. I don't even think I told you this, bad me. But it's funny, someone on my team, a guy who like helps with a lot of my content and editing and stuff. We have like a chat where like he throws all this DJ and stuff at me and I never do any of it or understand it, but he's deep down the rabbit hole. And there was one of these

AI agent DAOs that just launched, AICC or something. I don't know if that's the correct thing. He said, he literally, he messaged me. He was like, look at the list of like influencers on this thing. He was like, you can just throw in like one or two soul. And like, these things are popular, could go to zero. Then another guy jumped in and was like, dude, this is too degen for you and your audience, obviously. And I was like, dude, I have no idea what we're even talking about. Like this is dumb as shit ever. Um, because that's my natural gut reaction to everything in crypto until like four years later. Um, and, and, but then he launched, I guess. And he was like, if you had put in this or like people took, you know, a half a soul and turned it into 70 or something.

And he was like, if you put it in, it was like your 10 soul you could have gotten. He's like, you should just message them and they'll give you an allocation because you're an influencer. I was like, but you have to, and he was like, you just have to attach your Twitter account and your wallet.

I was like, you want me to go, not that he was trying to, he was just presenting, I guess, an opportunity, but like the notion that I was going to go on this thing and attach my Twitter account to like some AI agent that I don't know what it does or whatever, like seems like a guarantee that I'm going to be getting hacked and tweeting a bunch of scams. And then afterwards, like, yeah, whatever you put in would have been like $2 million or something. And then a day later, I start to see all these like influencer and bankless. I don't know anything about it, by the way, just getting absolutely destroyed for some

reason. I spent the last 24 hours on it. Yeah. Tell me about it. I know a lot of detail. All right. So I'm not saying any of those people were doing anything wrong, but it seems like it would have just been a cash grab. And then if you had sold any, you would have gotten shit on anyways. Yeah, it's a typical story. The supply was allocated to, of course, quote unquote, right people. And there was like a good plan. Again, of course, I cannot get into the internal strategy. And the entire bankless FUD

is about somebody sold. I mean, come on, that's what they're supposed to do. They're a fund, right? They're supposed to sell and make money for their LPs, not make money for the holders of the products, right? So they did what they were supposed to do, and they made money. And eventually, they were nice enough to maybe buy back. I have no direct relationships. I'm just saying, this is how things work. I'm not trying to be critical of them at all. I just saw that. Listen, we've all been.

If you have a large account, you've been on the wrong side of that kind of situation, no matter what. Clearly. Right. So like, I'm not criticizing them, but I think like the criticism that I saw was like, maybe they had the founder on or something and the fact that they could like be bullish on it, but also selling. But like you said, I mean, people don't understand. There's VC. I mean, there's business models where you get paid in tokens. And if you want to fund your

operations, you have to sell tokens, no matter what you think about them. I mean, listen to people like shit on Kathy Wood. Every time she sells Coinbase stock, how can you be bullish on Coinbase and you're selling because she has to rebalance her portfolio because of a fiduciary duty to the people investing in her fund that's why you have to sell and at the same time at the same time end of the day if a project is launching today and it's a dow to manage fund like it's a fund right and now everything that you see on the launch is essentially speculation they haven't started deploying what are you betting on so it's a speculation and if somebody is sensible cashed out on speculation i mean i think he's is only only good in investing and exits and having said that uh one of the core elements um of of this industry and i'm sorry i'm jumping back probably

15 minutes um to a topic that was discussed 15 minutes ago look we are in crypto right we are the degens of finance you just can't deny the fact there will be more degen people more degen than you and they'll be like you are i mean we are since 2015 we we like calling nfts and memes and you know this stupidity degen guess what people were talking the same shit about us when we got into bitcoin right so yes there's a modern generation that is trading better than us right on ai maybe so you can't tell them to not put their money because you put your money in bitcoin when nobody else was doing that right so they're putting're putting money in AI. I mean, let them do it. They might crash. I mean, Bitcoin crashed as well. 100%. Matthew, go ahead. The big problem there was that there was no lock

ups with AICC. Also, to your other question, algorithmic trading, according to ChatGPT, accounts for approximately 60 to 70% of all equity trading volume, which I think is interesting. One final point just on the AI thing, which I think really comes back to an interesting point about the efficient market hypothesis, is people need to take a logical step about what happens when everybody starts to use AI together. And that's diminishing returns, because if all AI is used to benefit people's portfolios and it's all AI PVP, basically it negates any of the price discrepancies or arbitrage opportunities within the market. And therefore, there's really just no places to go find additional capital or additional arbitrage opportunities. So it's an interesting space we're in right now because there are people

using it and there are people who aren't. But the minute every advisor or every person starts to use AI, I think that there's a big diminishing returns to any arbitrage opportunities or any quote unquote mispricing that you might see in the space, regardless of its traditional finance or crypto. Yeah, I've seen that. I don't know if it was here or on YouTube. I was talking about it, but I'm starting to see the idea of AI exchanges bubbling, you know, like an exchange that order books, market makings, all AI, and then your agent trades against another agent. It's still a net zero. I mean, it's still a net zero game, right? Like if my agent is someone's agent has to lose for my agent to win. Right.

So how is it like an innovation if somebody's buying and somebody's selling and somebody's making money and somebody's losing it so is it just so that i can like offload the responsibility emotionally on some stupid ai or you know i think it's i think all these things are coming and they're brilliant but the notion that like you're just going to have an ai go do it and it's going to be done well is it's nonsense but it's always just like producing content and i'm watching it on twitter these days yeah and my numbers are huge i've programmed ai to watch my shows great yeah matthew were you about to say something sorry just just to the point that if you take that back to how we can help listeners and how we can talk about communities building wealth it comes back to a point can help listeners and how we can talk about communities building wealth,

it comes back to a point that Warren Buffett made, which is inactivity strikes us as intelligent behavior, low activity, low trade volumes, like lower misses, lower tax implications, like pick a road and stay on it and just be comfortable with it. Inactivity is intelligent in this space.

Let's make more. It's a, it's a it's like a long said mantra that people in crypto need to hear like if you have high con you know I know people who earlier in cycles you know most of us would be like pray praying and spraying spraying and praying you know we got to be in every hot thing everybody does it in their first cycle they FOMO into everything they buy the top no matter how good the bull market is they're buying all the wrong things at all the wrong times you know i had people who would tell me you know listen you just like find one to three things you have high

conviction in buy them in the bear market and just wait and all those people generally tend to outperform you know if you have to pick right but uh you you know, Mark Yusko always comes on the show and says, you know, concentration earns wealth. Diversification keeps it right. So you're not going to get rich by diversifying into 100 different crypto assets. Well, I don't know. Maybe not. Vinit, you said, you know, that you cover your whole fund times like six from one of the investments. So maybe there is something to be said in crypto for uh for uh

spray and pray right so again you know that was not a spray and pray investment that was a sui investment this was a guy who was handpicked by mark zuckerberg to lead the technology division of facebook and later went on to build a sui network so it wasn't technically i don't do a lot of spray and pay because i wasn't i was being i was being like uh light-hearted i know that what you do is very serious i wasn't trying to minimize it all right yep but but but i have a decent angle as well i do you know a lot of people who know me know that i seeded a meme villa in bali in the summer holidays and we did do some fun stuff in fact i was in baby shark early on i was in baby shark at 20 million it went all the way to 250 million but that's me on a personal level on a

on a vc level it's more about still investing where the founders have some capability to build and yeah one investment ends up in fact the second one we invested in peak at uh a 30 million valuation its peak is about uh 70x our investment. So that's another 40 million right there. So two investments covering double the fund so far. I was offered peak and didn't do it for some reason. That was before Gaurav was looking at my investments. Somebody else was doing it. Yeah.

Did you look at my pet rolling? Although I think the round was much higher. I think the round was much higher than that. You did a 200 million round. We did peak uh when it was 40 million dollars and interestingly peak was nearly going to crash as well because the cfo stole a lot of money last token 349 singapore but again you know as long as uh you know some of some due diligence goes into finding these projects it's not a spray and pray it's more of a

much better calculated a bet but again you still lose a lot of money sometimes when founders lose their yeah to be clear you're on the show for the first time but yeah it was i think you're right i think maybe it was like a 200 million i try not to like i get offered all these like kol you need to like share things on social media rounds i i just say no to all of them because i don't do that go ahead rounds. I just say no to all of them. Go ahead. No, I was just giving Vinit, I was just saying, Vinit, probably it's

your first time in the Cryptotron Hall. Please don't reveal private deal details of the hosts. But I think it's the second one Mario was hosting. No, I didn't invest. It was actually Mario's team that I think looked at it first.

So I don't think there's nothing like I think we're transparent on that here. I'm just saying I didn't end up doing it, but that probably is about the valuation of a round

that was offered to me. Nice to know you got it 5x. Sorry, you were saying something. No, I said, I think when Gaurav said

this is probably the first time, actually, it is, I think the second time because one of my other projects, Revolving Studios, Amar had done a, I think it was a town hall with Mario and Yat and Sandeep were on board as well. So, yeah, it's good to be here.

And again, lucky for us, we are the VP guys. It's a joke. We're having fun. Yeah, of course. We only got a few minutes left. We talked about AI agents. Just since I have both Vinit and Gaurav here, I think we all agree that all of these things are going to have their bubbles and hype cycles.

But we kind of mentioned gaming. We mentioned AI agents. For me, if I'm looking at things that may seriously perform in this cycle I still think real world assets and big but are there other sort of buckets that you're looking for not just like where you can make a bunch of money on a coin and then it's going to go down and we're going to suffer a brutal bear market but where we might actually see sort of like meaningful level of adoption in 25 in this year? So for me, you know, anything that you're going,

oh, but you got a positive and that'll be. Yeah, for me, I think Bitcoin is the biggest runner. And if you want to really go degen, go margin or a little bit futures, not go 5x, just a little bit futures. And if you want to go a little bit more degen, go on Doge. And again, a little bit of futures. Again, not an investment advice.

I'm just saying this is what I would do and I'm doing. And then, of course, industry category, subcategory wise, AI is a good bet for the next three months for sure. And then there will be a larger wave like we had in gaming. And nobody's got hair, so nobody knows what works and what doesn't. And eventually everything will go down. So you can be as sensible as Vineeth is and maybe hold your liquidity to buy it in the dump. And then your investment cycle and efficiency, I mean, will be small and your efficiency will be better and you'll be more liquid. So you wipe off the floor of the markets at the bottom and then, you know, whatever, sell it in the next cycle.

So that's my quick bit in there. My part would be, you know, anything that gets users on board rail users on board and not speculators on board would be important that's what i'm asking what are those things exactly my question that's what they would be rwas rwas in terms of real estate actually going on blockchain and not just some random tie-up being announced on news actual users coming on board it would be gaming it would be identity you know i have invested in humanity protocol sometime back if we can assign a hash rate to a uh yeah idea a year back maybe yeah you know if you can i didn't i put a hash rate against a person and you know all the benefits

go to him it's a great idea to be on so you know those uh three four things defy is defy has still not will become that big as it can so i think those are the four or five things but one advice that i tell to everyone is you know everyone's thinking that bitcoin will end up becoming a million dollars in the next six months unfortunately that's not going to happen it will have its ups and downs before it goes to a million the whole game is if you make a hundred x how do you take liquidity out to have capital when the market collapses and if people think that in the next one and a half two years the market does not collapse unfortunately they have no clue how this market works inflation is re creeping back up we are doing the 1970s stagflation uh copy uh what do you call only two more interest rates to go is going to be a magical

moment again. And I would be investing in the next one and a half years, left, right and center. We did 140 investments in the last two years. So that would be me investing again in the next one year. So dare I say people take profits when things are up, and then don't go spend that on a stupid watch. Wait till the bear market and buy again. So what I've been advising is that anything that you make money in the next six months to one year, because this time the all time high has no value. It can be 150. It can be 200. That's not the issue. The issue is how long will the cycle last? Take 25 percent out in solid gold and keep it across your uh what you call lockers wherever in the

world you want to keep because you need an asset that is highly liquid and non-spendable you know having cash in your house lends you buying a ferrari which you have to end up selling in a bear market so have an asset that's liquid and non-expendable so basically having gold bars in your swiss bank account because the market will come down in the next one and a half two years because inflation has re creeping back up and go and buy the whole world that i mean that's what the fund you know sigma was launched sigma was not thought about just one month back it was thought two uh years back uh that we will raise capital when everyone's the warren buffet on the street and we'll deploy when everyone thinks that uh is going to die tomorrow. That's probably in a year's time from now.

I'm very well aligned there. Did David just disappear right when he was about to jump up? He did. I was about to invite David Towle to speak, but I think, guys, we got right there at the end of time. Sometimes we run over, sometimes we're shorter, but it was an awesome conversation. I want to leave it on a high.

Faneet, congratulations on the launch of Sigma. I think everybody will be watching. That's awesome. It was like announced on CoinDesk and everything. Big news. Go ahead. Sorry. You're welcome.

And Gaurav, thanks for taking time out of your busy schedule to, you know, to grace us with your presence. Matthew, Gareth, everybody else who with your presence, Matthew, Gareth, everybody else who was up here guys, give everybody a follow. Got a lot of exciting things that are going to be happening in the future, both in the space and with the show and our property. So I appreciate all of you for listening and tuning in really for me, I can say that people are, you know, we don't really monetize to any great

deal at this point spaces and stuff. And I've had a lot of people be like, why do you show up and host every single day? I do it because I learned so much coming here. And I've always sort of framed the reason that I like to host shows is because it's an educational process for me. I never want to be the one who's like telling you what you should and shouldn't do. I want to ask really smart people what you should and shouldn't do, right? And process that and take it into account even for my own investing and the way I approach my, you know, I think we've all suffered through the FOMO bear markets. I'm saying all this, not that you care, but because, you know,

because Gaurav is here and he handled a lot of this and, you know, I mean, shit, the guy taught me to meditate too, right? Not, not, not just, uh, not just my portfolio, but also to, you know, help get my, my brain straight, you know, but, uh, you, you do need trusted people and that can just be people that you listen to on a show that you think are really intelligent to help guide you and control your emotions and make sure that you make good decisions. so i think to at the end of the day let's do a meditation town hall one day we should at the end of the day gorov's guys gorov has the craziest story of any human being you've ever met we got to do another like full podcast and we're not going to talk about crypto i'm just going to talk about like meditating and doing like tricks on motorcycles and stuff um but uh you know it's very

important that you have like trusted people around you, which we try to facilitate here to help, you know, keep you in check and give you very good guidance on what's likely to happen. So that's what we're trying to do. I'm always learning as well from everybody here and appreciate that I can show up every day and get to do that. It's like going to college and having the best professors answer all your personal questions without having to pay. It's awesome. So that's Crypto Town Hall in a nutshell, guys. We'll be back tomorrow, 10, 15 a.m. Eastern Standard Time. Once again, give all our guests a follow. Vineet, congratulations. See you guys tomorrow. Bye. Thank you, guys. Cheers, all. Bye-bye.