The Wolf Of All Streets - Bitcoin Will Hit $1,000,000 | Why Is Arthur Hayes So Bullish On Crypto

Episode Date: March 24, 2024

Arthur Hayes is a renowned figure in the crypto community, widely recognized as one of the pioneers. He consistently provides insightful analysis of the crypto market and blockchain technology through his blog. In this episode of The Wolf Of All Streets podcast, we delve into a myriad of topics ranging from macroeconomics to ETFs, the ongoing bull market, NFTs, and notably, Arthur's bold prediction that BTC will soar to $1,000,000. Watch this episode to learn more about crypto and gain valuable insights from Arthur Hayes himself. Arthur Hayes: https://twitter.com/CryptoHayes Arthur Hayes' blog: https://cryptohayes.medium.com/ ►► Sponsored by iTrust Capital Invest in Bitcoin, Crypto Assets & Gold with Your IRA Using iTrust Capital. 👉 https://bit.ly/itrust-scott ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/   ►►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  ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. USE CODE ‘25OFF’ FOR 25% OFF WHEN VISITING MY LINK.  👉 https://tradingalpha.io/?via=scottmelker     ►►NGRAVE This is the coldest hardware wallet in the world and the only one that I personally use. 👉https://www.ngrave.io/?sca_ref=4531319.pgXuTYJlYd  ►►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   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  Timestamps: 0:00 Intro 1:02 The macro background 3:00 The system wants your money 4:50 iTrustCapital 5:49 The first test of the market 9:55 The wealth effect and meme coins 15:45 The trickle down effect of the pump 17:50 What happens to top coins from previous cycles? 19:00 NFTs 19:45 The new narratives 23:20 When will DeFi be massively used? 24:35 Ethena 28:17 Risk transparency 29:30 Centralized stablecoins 30:20 ETFs 32:40 AI and crypto 35:00 The decentralized systems are still undervalued 36:20 Ethereum’s big bid 39:35 VC deals 43:25 Huge discounts and funding trade 45:48 Playing with degen stuff 47:15 How to get more involved with crypto 48:55 $1,000,000 Bitcoin 51:44 Follow Arthur Hayes 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.

If you don't like Athena, there's Tether. If you don't like Stablecoin, put your money in the fucking bank, right? No one's saying you have to use any of these things. Janet Yellen wakes up out of bed on the wrong side one day and she decides, okay, no more Tether. His name's on that, man. You said it, not me. Ten years of trying, they still don't have a fucking ETF. That started in 2013.

And that's crypto. And it's hilarious. If you're ever feeling down on the market, a little bit depressed, a little bit bearish, there's a very, very simple remedy. You just call Arthur Hayes, you talk to him for about an hour about the market, and all of a sudden you'll be renewed with a bullish vigor like you've never had before. So that's exactly what I did. I called Arthur Hayes, we talked for an hour, and now you guys get to listen and maybe some of that bullishness will rub off on you. So I think you're pretty bullish about what's happening in the market right now. Is that fair to say that you don't think the top is in?

Absolutely. This is fucking fun. Give me the broad strokes on what you think. I guess we could start with macro and then zoom into crypto. I mean, it's the same thing that everyone has been talking about since 2009. Like too much debt, not enough economic progress. And so I think we're reaching the end of the line for the sovereign bond market. And so people are starting to wake up and realize that, why do I own these government bonds? Especially if you take a look at 10-year bond yields across

the world versus the nominal GDP rate in whichever country you're in, most likely you're having negative real yield, meaning the government says, please give me money to do stuff. And then government's not willing to pay you at this rate that the economy is growing. So it's a bad fucking deal. And previously, like, this has been a playback for every single government

since there has been civilization is, let me borrow from the people at a lower rate than the economic growth that my domicile generates. And they use various means of financial repression and whatnot to make that happen. But now for the first time in human history, we have this thing called Bitcoin and crypto. And if you click on your phone, and all of a sudden, you've taken that fiat that's going to be infinitely debased. And now you own some of the hardest assets that we've ever created as a human civilization. So that's the backdrop. Obviously, as money keeps leaking out into Bitcoin, the price rises. That's why it's up however many tens of thousands of percent since 2009. And the banking system has finally realized that the people who hold all these bonds are like,

I don't want to do this anymore. And that's why i believe you're seeing this renewed push for etfs right the wrinkle clowns it took them 10 years of trying they still don't have a fucking etf that started 2013 they get all the credit in the world but yeah i mean how did they not and then larry fink comes in in june 2023 puts an application in boom six, six months later, he gets an ETF and Fidelity and all the other guys. So that tells you something. The establishment wants to hold your crypto because it doesn't want your money to leave the system. buy a Bitcoin ETF or a gold ETF or S&P 500 or NASDAQ 100 or NVIDIA or whatever, right? Just don't leave our little system. Don't actually have economic freedom, financial freedom. We'll give you a derivative called the Bitcoin ETF, stuff your money in there. Now, for some people, obviously, they have no choice. If your retirement account, you can only invest in certain things. The approved good assets that the government tells

you are good for your retirement. Of course, owning physical Bitcoin isn't one of those things, but now you can buy this ETF and we're seeing some of those flows. Or if you're a fund manager and you don't want to update your PPM to add a new asset class, and that's going to be a pain in the ass, now you can onboard the negative correlation and high volatility, good sharp ratio of Bitcoin returns to your portfolio, just go buy one of these products. So that's kind of what we're seeing. We're seeing all this money flow into the system. It's obviously gives a big confidence boost, especially to like the real people who hold real crypto, not on the derivative product. And now we're seeing fucking dog coins go nuts on Solano every weekend. It's the same stuff. It's a wealth effect. It's fun. I'm super bullish.

Obviously we've had a bit of a pullback. I'm sure we'll have more pullbacks, but the trend is set. We're not deviating from it. Let me know when the politician in your particular part of the world is saying, I'm going to balance the budget. I'm going to cut government services because we've spent above our means for the past 40, 50 years. Let me know when that happens, and then maybe I'll change my opinion on whether or not there's going to be more money printing to keep these bankrupt governments afloat. Crypto investors in the United States face some major challenges. One of them is that there's almost no way to get exposure to the asset class inside of your traditional investment vehicles. The other thing is the taxes. They are absolutely atrocious. What if I told you there was a way to solve both of these problems? Well, there is. And it's with a self-directed IRA from

iTrust Capital. Guys, not only can you open a new self-directed IRA and fund it with the limits each year, but you can actually convert over from your 401k, your Roth IRA, any other IRA that you already have, and you can do that tax-free, just transferring over the balance. And then you can go to cash, buy as much Bitcoin than you want, and not pay taxes when you sell it. You absolutely have to try this if you are in the United States. Use the link down below. It's bit.ly slash itrust-scott. That's B-I-T dot L-Y slash I-T-R-U-S-T dash S-C-O-T-T. You have to try this now. Right. We've obviously had the four-year cycle, which statistically probably not that important with a sample size of two or three. And obviously each time the asset class is different,

but there was an expectation like every previous cycle that we get to having in April. We have maybe a 30% retracement. We have a boring ass summer. And then all of a sudden it's up only in fall, like every other time, but we went up only instead before the having. So a lot of people think that means we have a shorter cycle. I'm more in your camp, which means we're just getting revved up and it's going to be probably a longer cycle and we're just going to go bigger and better. But is there any validity to either of those theories in context of this new all-time high in Bitcoin happening before we even got to the halving in this cycle? So the detractors of all of these flows into Bitcoin, I'll reference

Jim Bianco. He had a great presentation in the recent webinar, and he was comparing the ticket size of flows into Bitcoin. I think it was something around the average purchase is like $25,000 or something, right? So his point, and I think it's a valid point, is we've had a bunch of people who now can buy these Bitcoin ETFs very simple and easy. And what are they going to do when they get their first like darth maul candle when bitcoin's down like 50 fucking percent in like you know two minutes and like oh this is this is fucking crypto are they going to run for the hills are these flows as sticky as we would like to believe like you know it's just

people ticking boxes on their 401k forms or retirement forms and just letting that money flow in every month when they get their paycheck. I don't know. So we're going to have to see that. Will we get that correction? Absolutely. And we're going to test this notion of how sticky are these flows? Are the persistent inflows that we see every day to this, what are the 12 ETFs, will that switch to a net outflow if we get a massive correction in the price? And I think that's going to tell us a lot about how strong this narrative of institutional money,

retail money on the sideline that's in vehicles that couldn't invest in Bitcoin previously, but now can. What's their sensitivity to the price movement of Bitcoin? So we don't know that answer. We'll find out, sure enough. Hopefully, they're diamond handing the shit like we all are on the physical side. But I think that's going to be the first real test of this bull market is how fickle are these new investors?

Are they here for one to two years? Or is it like, I bought Bitcoin, I made 30%. Thank you very much. I'm going to go back into Nvidia. I don't know. So I think that's going to be the first real test of this market. Maybe they're having a sell the news type of event. It happens.

We get to get a correction, watch some people out. We see how things perform. We also have what's going to happen with reverse repos in the US. And is that going to be drawn down sometime in April, May? And what's going to be the response for the US Treasury and the Fed? So we have some things. I still am confident that there's always some things, right? We'll climb the wall of worry and we'll be in the hundreds of thousands of dollars for

a Bitcoin end of the year into next year. But it's not going to be without some pain, I think. And people would be very silly to think that it's just every day after they post a flows in Asia time, the price ramps 5%. Yeah, I think here in the early months of the ETF, we have it sort of ramping up. So you have these small tickets and it's retail investors looking for access. What's going to be interesting is if we get one of those big corrections and those people try to sell off, but we still have new RIAs coming online and some of these funds indexing to 1, two, 3% passively in the face of that.

Right. So there'll be still, I think we still are at a point right now where because everybody doesn't have access and it's just slowly trickling in who gets unlocked that we probably have this fundamental by-wall, you know, sort of pushing up for a while. Maybe that's not the case, but that's sort of my base case on it. Yeah. And the great thing is we're going to test it. We're going to see. And the flows are very public. We'll know in real time what that is and everyone can adjust their expectations accordingly. You talked about the wealth effect before, right? The idea that you start to feel like you're rich, there's all these funds, things are going up. So you start to go full degen and the casino opens. Well, the casino has been solana obviously you talked about

all the dog coins but it's sort of interesting i don't think it's like flows are making their way from the bitcoin etf into dog coins right so it really is that wealth effect it's just the same old crypto degens i think pumping and dumping all over each other and i guess having a good time but like does it concern you at all sometimes the meme coin insanity is at least a local top signal maybe i i love it i think it's it's activity it's it's one of the big use cases of this whole thing is it's a free market anyone can launch anything they want and we can play these little economic games over the internet as humans and trade things right and so we've removed a lot of that from traditional

markets which is why they're so fucking boring and people love trading cryptos i can launch what is it the slurf dude he like locked his coins today he burned yeah we're recording on monday march 18th for people who don't know and i've talked about slurf seven times today and i don't even really dj in that hard but this dude basically did a public presale, which by the way, means just like posting an address on Twitter and people just send you money. They don't know who you are, you're anonymous, you say you're launching a coin and they're so degen that they just send it to an address. And then he accidentally locked himself out or burnt all the tokens. And then none of the presale investors got a refund in solana or any of their tokens and somehow in the meantime of all that bybit launched leverage

futures on this slurf token so you could trade that action with my leverage on bybit come on man and that's crypto and it's hilarious i think it just points to like this you know this that's the funny part the sad part is that everyone is basically like, well, I'm getting these dog shit pieces of fiat. They keep being debased. I have no trust that the people who are supposed to care about the purchasing power of my money and my time actually are safeguarding that. So, yeah, I'm going to go fucking trade Slurf and Bome and whatever else is coming along because that's more fun. I don't want to go fucking give some dude or woman in a suit to go put my money in. I don't know.

Negatively real yielding bonds, just because it's like what you should do with your money. I mean, in past cycles, I feel like, you know, we had Doge coin was sort of the leader of the last one. There was all these anecdotal stories.

I talked to CZ at that time and he was like, there aren't enough customer service people in China for me to hire to onboard people who want to trade Doge, right? We saw Robin Hood, he's like couldn't onboard people fast enough for Doge. But there was still this myth that Doge had some fundamental value. It was an investment. The Dallas Mavericks were going to allow you to buy merchandise with it.

It's different this time. I hate to say this time it's different this time. I just, you know, I hate to say this time it's different, but this time it seems like it's a full push rate, pushback, rage against the machine game. Stop like just people having fun with their money. They know it's completely worthless and these are lottery tickets and it's just a casino. I mean,

do you think that it's different with the memes this time? Cause it seems like they're launching a thousand a day now. I mean, I guess. Jackson Palmer was very explicit that dogecoin was a joke well he knew and people just said yeah fuck that like i'm gonna i'm gonna ramp this shit so i don't know if it was ever any different it's just how much people actually you know what they justified to themselves why they're doing this um i think the more left curve that you approach this shit with the more money you'll probably make because you'll know i'm investing in dog shit at the point in time at which the momentum of this meme declines this thing is going to plummet like a

fucking rock so i don't know maybe i made my 100x somebody money because i got in early take my chips off the table and you know enjoy myself with the money that I've made. So I think trying to intellectualize this too much leads you to probably lose more money. Yeah, it's a game of hot potato and you just got to be good at it. Yeah, I think that's the reality. Musical chairs, hot potato, whatever analogy you want to give for it. You don't hold these as fundamental investments until the next cycle, which people tend to do with coins like Doge or i mean when you start seeing you know i think andrew kong was on twitter saying like meme coins is like an asset class like i mean i know he's talking his own paradigm but like when you start seeing like vc funds like taking subscriptions

and like meme coins then you know okay maybe we've gone too far we're not there yet but i'm sure we will get there but in the cycle of like dog with hat is like 30 billion or one of these things surpasses sheep in terms of market cap. We'll probably get some like, you know, promoters out there saying, yeah, we know how to pick the best memes on the internet and crypto. So please pay us two and 20 and put your money with us. Yeah, exactly. I mean, I saw Franklin Templeton last week did a report, which I thought was shocking from such a major and respected financial institution. It was about meme coins and their relationship effectively with the protocols on them. And I guess the implication was that all of these protocols need meme coins and massive speculation to push more TVL and to grow those. So without meme coins, would we be seeing these moves on Solana or avax or any of these of course not because this is solana's a chain is where this solana's a chain where the activity is activity equals soul burn therefore or use it users and usage at least is being used for something it's

kind of the same argument why people say oh no bitcoin ordinals are really bad because it's bloating and blocks go fuck you like people want to use the block space it's an open free system if they want to pay for it then let them put their jpegs on bitcoin i have no problem with that like the human culture if we take human culture and put it on the blockchain the sky's the limit for the valuation of things these things and meme coins is just uh an iteration of like what we could do if we all collectively believed in whatever it is on a particular chain. So how much of that TVL or that value or that interest do you think will trickle down into,

I guess, more fundamentally sound or killer apps that may bring mainstream adoption on these chains? Do you think that some of it will trickle down in Solana to some killer DeFi app, for example, or into some, you know, NFT projects that are, you know, bringing your mortgage on the blockchain, all the myths of the past, right? Do you think that it'll trickle down? Or do you think that once the meme coin craze ends, we see a massive sort of exit, you know, rush to the exits? I think usually my point is the price is everything. And so if I'm a Solana or any L1, I need to convince a developer to develop on my chain. And that is a function of how many users are there. Because as an engineer, I want to build something that's useful to as many people as possible.

And so if Solana has a high price, people are talking about it, there's more developer talent that says, I would rather go to this chain because I know there's users here for whatever I want to build. Now, they may be able to come to create some dog shit meme command, but who cares? They're there and they're active and they're doing stuff on the chain. So that is value add for any L1. So I think it'd be silly for any L1, you know, the foundation is what discourages activity because at the end of the day, your chain is more valuable. The more developers you have building, whatever it is, and it's up to them to figure out what they think the community wants.

But this is a good signal that, Oh, there's shit happening here. It's not some dead chain. Therefore I should build something. So what about the chains that there isn't shit happening? Are they actually dead chains? Cause we see these 2017 and 2000, you know, all the past cycle darlings, some like solana have made massive moves right in the face of talk about a wall of worry i mean you had ftx and sbf and all those things yeah then you got the like uh you know top 10 market cap coins of 2016 and 2017 that maybe not really made it but i don't say the names on that. You said it, not me. The Cardanos, the XRPs, whatever they are,

the sort of darlings of two cycles ago. Do they die or does everything trickle down and eventually everything gets its pump? I don't think they die. They might just lose relevance. Nothing goes to zero. They'll always be of value. And if you build a community of people who are diehard about whatever it is, even if

the chain itself doesn't deliver on usage or apps or whatever you think is valuable, people still believe it. They hold the token. They want to go up. So they're going to keep talking about it. And that's the beauty of these network is if you give people a stake in the network, they will be willing to ignore a lot of things as long as that token price goes up. Yeah. The community is things as long as that token price goes up.

Yeah. Community is only as good as the, well, the community only lasts when price is going up. And then there's like the 10% that's left that become the passionate community members, toxic maxis, no matter what, but like 90% of them leave. It's like every NFT project, like turnt up turtles or, you know, pandering penguins. I don't know what they were all called, but like those people who associated with their NFT and like, I'm, I am my lion or whatever. And then like price goes to zero. You don't, you're not your lion anymore. Yeah. Back to LV. I mean, that really is. Do you think NFTs like the, those collections will catch another bid or do you think we're going to see new, you know, 10,000 PFP collections, or do you think we're going to see new you know 10 000 pfp collections or do you think it may be the next cycle of nfts will be sort of more fundamental well the the blue chips will be

the blue chips punks apes pudgies like you know rafiqs all that kind of stuff that the stuff that held value during the bear market it still had trading volume will go up a lot because they've been in the first doing whatever it is new for an n. I'm sure there's going to be new people who create new ideas and using this technological construct to do new things. And that's going to be super interesting. I have no idea what those are, but at least we have this open platform for people to experiment with like bringing some culture to the blockchain and we'll see what happens. So a lot of people want to know what's going to be the big narratives of this cycle, right? I think we've got deep in obviously as one of them. And there's quite a few AI has been catching a crazy bid for the last,

for the last while. Do you think that all of those previous sort of cycles we had come to more relevance? We talked about NFT just now, but like, do you think we get a huge real advancement in DeFi or metaverse? You know, cause we had the DeFi summer with tacos and yams and we had NFT summer and we had the metaverse fall,

but all those things like had their pump and then you realize, well, we can't do the metaverse yet in crypto or we can't do AAA games in crypto yet, right? Is this the cycle where we see those previous narratives sort of come to fruition? Well, we see this, the project that can survive a bear yet, right? Is this the cycle where we see those previous narratives sort of come to fruition? Well, we see the project that can survive a bear market, right? So take Metaverse, for example.

Obviously, I'm a big Wilderworld holder. They've been releasing some good stuff. I think the game is live or almost going to be live. We'll see it resonates with people. Things like Shrapnel, I'm an advisor for that. Another very good first-person shooter is crushing it. So again, if you build quality stuff, it takes time. Maybe you got rewarded for just saying you were going to build it in the last cycle,

but now you built something. And then the question is, can I get back above that high watermark that I was at in 2021? And so that's the question. And people are going to expect some high-quality shit to get you back above that hopium phase that we were in. And DeFi, I mean, DeFi is still chugging along. Uniswap, D-R-D-X, all these DEXs, they're crushing it. The volumes are increasing. They're becoming more relevant. Yes, they're not the price discovery place at the moment, but I think that's going to change and that cycle

into the next as more and more people are like, huh, I like this non-custodial thing. I like being able to trade a lot of these long tail assets. I like all the different flavors that people have brought to what is a two-sided marketplace that's outside of the centralized exchanges who are now probably more catering to like HFT shops shops which is how most centralized exchanges evolve over time it's what does the virtues and the citadels and tower research what do they want versus what's going to be really appealing to the retail user it just occurred to me when you were talking about d5 that one of the huge differences in the meme coin trend this time is that people had to sign up and wait for a centralized exchange to trade meme coins largely last time and this time is that people had to sign up and wait for a centralized exchange to trade meme

coins largely last time. And this time you can just make one and the degents can have at it without any of that sort of barrier in the way. That's probably why memes are going so wild this time. You don't need to wait to get KYC'd on Binance to trade it. Yeah. And he's going in Jupiter, Iridium or whatever on Solana and boom, it's there. You have an idea. You think you can tap it to a zeitgeist in the community? Boom, it's up and then people can trade it yeah and he's going in jupiter iridium or whatever on solana and boom it's there you have an idea you think you can tap it to a zeitgeist in the community boom it's it's up and then people can trade it and so people are getting introduced through that i want to trade this culture oh this is how a decentralized exchange works maybe i would have gone on you know a robin hood or coin base of finance previously to trade one of these things. But I heard about it on the forums. I couldn't trade it there because it took the BD teams there a weekend

to get that up on the centralized exchange. It's launched here. Trading volume is pretty liquid and pretty deep for a fucking sloth meme that was created overnight. Oh, I like this. This is cool. What else can I trade on these things? And so you're introducing people to this whole concept of what is a decentralized exchange?

And maybe the user experience isn't the best, it's not as good as a centralized exchange, but once I've gotten used to it, then the reticence to try it out for something else diminishes. Yeah, that makes perfect sense. I guess to my previous question, do we see people start to actually use DeFi as a parallel financial system to opt out of the banks in this cycle? Or is it still somewhat crypto native and people who understand it who are willing to take the risk on yield? And then we'll get into Athena after that. But I mean, do you think that we will really start to see people in Venezuela or one of these places outside of just using stable coins start to actually use DeFi? I think so. Because again, it's becoming more expensive for centralized exchanges to serve all of these smaller places. And so they're going to get left behind. And so, hey, I'm not getting served the way I think I should be served by this centralized company. Here's an open platform. I can go on less than five minutes.

Boom. I'm using some wallet app. And now I've connected to the entire world's order book. And I can trade stuff. And, yes, it took a little bit of a learning curve to understand what this means. But I didn't have any other option. I heard this crypto thing is pumping. I tried to get access to it. I couldn't. Then I learned how to use this other open financial

system. Like, wow, this is really amazing. It's way better than the shitty banks that I have to deal with on a day-to-day basis in my country. Yeah. So let's talk about Dina. You guys made a lot of waves. Obviously, you're an advisor, but the whole project was based on that. I guess it was a Medium blog post a while back, maybe a year ago, right? And I actually had Guy Young on right when you guys launched to talk to him and sort of dig in and understand it better myself. Are people still upset about this? It seems like you kind of had this bipolarity of people who thought it was the most amazing thing since sliced bread and then a whole bunch of people who thought we were for some reason doing Celsius again. I love it. I think we want pathos. We want emotion. We want controversy. It shouldn't be that

you want something that everyone agrees with you. It's got to be controversial. Otherwise, no one's going to at least investigate it. People are upset. Oh, it's just cash and carry. I can do it myself. Of course you can. No one said you couldn't do it. There's been other projects that have done this before. Absolutely. It's all about execution. This isn't really a novel idea. I've been saying this and other people have been saying this, like we can create a synthetic dollar even before I wrote that blog post. It's just that Guy and the team have hit a particular moment in time where there is this worry that we've outsourced this critical function in our markets to the TradFi banks.

And nothing against Tether and Circle and First Digital and these companies. It's fundamental to the business model that the bank has to allow them to exist. Why are we trusting TradFi banks to give us this 24-7 digital fiat token? Why not build it ourselves and have it within our own ecosystem? And so that's kind of the message that I want to get out there. And obviously, Athena is doing well. But even if they don't do well, I think this still is a concept that has merit of trust ourselves, trust the centralized intermediaries within crypto to create something useful, rather than trusting the centralized intermediaries and TradFi, who we want to disintermediate and destroy, right? So I think that is fundamentally

something that we have to embrace, whether it's Athena or something else. This is a valid thing to want to own within our own ecosystem. Yeah. I mean, people can do the cash and carry trade by themselves, but they'll mess it up just like everybody did last time, right? Probably if you don't have a professional sort of handling that, but the way that it sort of accrues into this synthetic dollar is different, right? That hasn't really happened. I mean, that is a sort of unique and novel approach. And then you can take that, well, we won't call it stable coin, that synthetic dollar and do everything that you can do with a stable coin, or at least theoretically in the future, right? Yeah. And then that's the beauty

of DeFi, the Lego composability of everything, right? I can take my USDE, I can pay people with it at Maelstrom, my family office. We have an all policy. We only pay people in USDE, all vendors, all deals, everything. Because obviously we want to support this project that we're an advisor of, right? You can do that. You can stick your USDE and make, I don't know what the yield is now, like 50, 60%, whatever it is, which is basically let me just capture the cash and carry basis. Now, it is not that difficult a trade to put on, but it's annoying to monitor and to make sure you're not going to get liquidated and that's counterparty risk and all these things. And that's what Guy and his team are there to do is to tell you about all these risks, tell you how they're managing them. And for you to make

a decision of, does that make sense for your portfolio. And then we're getting interest rate curves with Pendle. So now you can take your staked USDE, that DeFi asset, and you can term it out over different periods to see, I want to lock in this high rate for a month, three months, nine months, whatever it is. So now we're starting to see a proto yield curve, all based on something within our ecosystem, which is the native yield of staked ETH and how much people are willing to pay for leveraged on centralized exchanges to trade ETH USD and maybe in the future, SOL and Bitcoin USD. Yeah, something you said is telling and to me is one of the most important points of this cycle. Even with all the degeneracy that we have going on, I think a lot more people are talking about

and being transparent about the risks, right? Nobody's saying that this project doesn't have risk. They're saying, these are the exact risks. Are you willing to take it? That's the difference between this and the lunas of the world that we saw last time, right? Don't want every time someone questioned him would like dunk on you, like you were the dumbestas of the world that we saw last time, right? Doquan, every time someone questioned him would like dunk on you

like you were the dumbest person in the world for pointing out something that was fundamentally, obviously wrong. You know, he was empowered by the biggest VCs and really felt like if you criticized him, he had, you know, full green light to go out and tell you you were stupid publicly. Nobody's doing that this time right now.

Yeah, exactly. And again, it's a choice. And my whole point is let's give people choices. If you don't like Athena, there's Tether. If you don't like stablecoin, put your money in the fucking bank, right? No one's saying you have to use any of these things. But there's an opportunity to create a space where we have a stablecoin that is guaranteed by some of the most respected institutions within crypto rather than guaranteed by a bunch of banks who hate our guts. So are you still worried about centralized

stable coins then? Because they are, as you said, custodied with a bunch of banks that hate our guts. Yeah. I'm not worried that they don't have the money. My worry is more, hey, there's some political thing that happens that we have no idea what it is. Janet Yellen wakes up out of bed on the wrong side one day and she decides, okay, no more Tether, right? It's literally just a phone call. It's literally just a phone call. Hey, I don't like that you're banking Tether. Well, the US Secretary says she don't like that you're banking Tether. What do you do? You fucking debank the Tether. And that there goes Tether, right? And so it's just that simple. We have no way to understand when that's going to happen, why that would happen, what the complex global political things that are going on in the United States would make her do something like that or Powell or any large banking. We don't know, but we do know here's the risk. Are you willing to take it? That's all we know right now. Do you have any similar concerns about the ETFs? I think the ETFs, the concern is number one, the pernicious negative effects of passive investing as a thing. And we've seen that effect in traditional markets where we've destroyed price discovery. The stock that's most valuable is the stock that has the highest market cap, not the stock that earns the best return on capital. And that's just a fact of indexing

and how people allocate to these things.'s not you know and so then it's a question of if these etfs accumulate a lot of assets their passivity will lead to could lead to stuff not happening on the networks and then they die over time right because stuff needs to happen when you do stuff with these assets for them to hold value unlike Unlike gold, which is literally just an arrangement of atoms, it is what it is. Whether you move it from one place or another, it's still gold. But Bitcoin, if it doesn't move, if there's no transactions, if there's no fees being paid to miners, then there's no more network. And so that's the fundamental difference between the two. Is this a problem that's going to manifest itself anytime soon? No, it's more of a theoretical thing. The more thing that's pertinent is what happens if there needs to be a bail-in of a particular financial system, which says, hey, I've got all this debt. Oh, look, there's $100 billion of assets that I could force to buy my bonds, right? Okay, let me just go over here

and change the rules because I can. And now you got to go buy these bonds. And you thought you escaped something, but you really didn't because your money is still within these institutions that I oversee as the government. And so that's the real risk for anyone. This cycle is, okay, this door was open for a period of time. The situation has gotten worse. We're going to close the door. And all the capital that is in any sort of trad-fi institution is fair game to be debased, regardless of what the asset you think you hold is. Yeah. Maybe the answer then, the lucky answer that we have right now to that passivity and to killing the network is ordinals and BRC20s and dare I say, meme coins coming to Bitcoin. Yeah, for sure. Absolutely.

Someone's willing to pay for the block space, let them pay for it. So what other narratives are you excited about for this cycle? Let me ask you this. Do you think that ai and crypto actually make sense together do you think we're just doing the uh long island blockchain ice tea thing and ascribing the name ai to a bunch of shit uh so that it can pump i think it from a fundamental sense it makes sense will we see like we us get to that situation in this cycle i don't think so this is the dream and hope cycle this is the you know nvidia is going to sell a hundred billion this quarter, 200 billion next quarter, a trillion dollars of chips the quarter after that, because there's just this insatiable demand to build, you know, CapEx, insatiable demand for data storage for AI. I don't doubt that there is this

demand, but every time us humans have to ascribe a probability to a future when it's going in our favor we think the future is going to be bigger than it actually is every single time it's happening with every single new technology i don't care that people say oh yeah it's super transformative i believe it i believe i think you know as mark andrewson say software will eat the world yeah it will eat the world too but software eating the world is still when he said i don't know he said that in the 90s yeah it's still eating the world is still, when he said, I don't know if he said that in the 90s, it's still eating the world. I mean, yes, there's been lots of value,

but there's been peaks and troughs and all these sorts of things. So I think right now we're in the euphoric phase of, wow, look at all these things that we could do with AI. Look at all this productivity that we could gain. Look at all these things that AI economic agents could do with a crypto blockchain that makes sense fundamentally to a computer program that doesn't make sense in a traditional legal perspective.

And if NVIDIA and some of these companies keep pumping, we're going to keep believing that AI and crypto is a thing. I think AI and crypto will be a thing. And maybe that's the next cycle or the cycle after that in terms of seeing actual AI agents paying each other using Bitcoin or some other things or actually using DeFi, but it's not going to stop us now from pumping the shit out of some of these coins. That's right. And humans think, to your point, humans think that everything's about to happen now. They're terrible at predicting how fast things will happen at the beginning,

but they're equally terrible at understanding how fast they do go when they go parabolic. It's like they're all somewhere stuck in the middle, right? So you kind of made my point. We saw the first iterations of DeFi and NFTs and Metaverse. I mean, Facebook changed their name to Meta and every token that was Metaverse related went up like 100x or whatever it was, right? It's absurd. And we're doing that right now. This is the Metaverse fall of this cycle. Is everything pumping because of Nvidia, right? I mean, that's basically it. Exactly. Yeah. So we just wait a couple cycles, and then we'll probably actually see something that gets some meaningful level of adoption. I mean, I align with you exactly on that thinking, and I'm wondering if that's going to be deep in

too. It'll be everything. Building these networks is hard. It's this physical infrastructure, these fundamental things that we want it's hard to do right look at ethereum right people were laughing at it back in 2015 me included right and now look at how transformative it is and how many other copycats it's inspired and how much economic activity is happening because of what um those people created have we fully anticipated the you know game taking nature of the world's decentralized computer, whether it's a theorem or it's another L1? Absolutely not. We're still underestimating how much we can do outside of the traditional analog financial system. So I think it's the

same thing over and over and over again. And that's why it's fun. It's a cycle. It rhymes. It's not the same every time. Gives us something to do as investors. Yeah, the thing that hasn't rhymed this cycle is an Ethereum pump. Well, we'll see. Maybe with the ETF comes. Right.

I mean, it's moving on dollars. But on the Bitcoin pair, if that's still a thing, it's obviously been a major laggard. But personally, I think that's an opportunity, not an indictment. But I'd love to hear your thinking on it. I just think it's a laggard. So you buy the laggard. But maybe that's just me. I think ETH is going to catch a really, really big bid, especially if these ETFs are going to pass. And why do I think the ETFs on ETH and SOL and all these other assets?

Because they're making so much fucking money. These are the most like the biggest etf launches in the history and etfs have been around since the mid 90s um starting in in the us so we're talking about bigger than spies bigger than queues like bitcoin etfs these motherfuckers are raking in aum and some of these guys aren't charging fees. 56 billion total. It's insane. I mean, that is bananas. So if this is Bitcoin, why not Ethereum? Why not Solana? Why not any of them? And it's not only the BlackRock's and the Fidelity's of the world who make money on the AUM. It's the sell side investment banks who love this too, because BlackRock is their client.

Oh, I need to create redeem. That's what I'm calling JP Morgan, Citibank, Goldman. Oh, I need to repo these crypto assets. Who am I calling this stock bar loan desk? I need some financing. Oh, I'm going to the bank for that. Hey, I need to trade some funky derivative stuff. Oh, okay. Guess what? My friendly investment bank has some products to offer me. So it's volatile. It's's emotional people are on tv talking about it all across the world it's the first time in a long time that you have your client base is excited to learn about something new rather than the sap went on 50 basis points today went down 50 basis points today is the fed gonna rate 25 basis points in this meeting we're gonna parse every fucking word of the ecb communicate to see whether or not they're going to raise rates at the next meeting. Fucking boring. I want some fucking salon. I want some dog money. And guess what? Now you can have a product traded that you as a bank earn fees on. There's no way that these ETFs don't

get approved. I know that there's possible politicians in particular, you know, US policies don't like it, but you know, the banks run everything in every single major jurisdiction. And so if the banks want to make money on these things, they will have them. Yeah. I mean, it's funny you talk about all these professionals parsing all this data, 0.25 basis points, and they've been literally wrong about everything that's going to happen for like a year and a half now. I mean, if you looked at predictive markets and listen to these people, we would have had six rate cuts by now. Exactly. Last time I checked, we still have a cut.

I don't know. So yeah, I mean, again, it's all about where the flow is, who's paying fees. BlackRock and Fidelity are some of the biggest fee payers across the street. And if they now have this crypto thing, every bank's getting in line to get their piece of the pie. Yeah, I mean, there was that interesting story maybe a month or six weeks ago, right after the ETFs launched, where a bunch of banks wrote a letter to the SEC or the treasury or someone and said, can you just change some of these custody rules on crypto for us? Yeah. Oh,

we want to hold these things down. Oh, really? Okay. Of course you do. Why should Coinbase, some like, you know, San Francisco fucking company get to have all this custody revenue? Fuck, Brian, I want that money. That told me everything I needed to know, right? Because when those dudes are having FOMO, you know that something's different. Exactly. Yeah. So listen, you said you have a family office, Maelstrom, right?

I'm curious because I'm not even a VC. I do some angel stuff, but everybody has my telegram. I don't think I've ever seen so many, I mean, angel stuff, but everybody has my telegram. I don't think I've ever seen so many, I mean, maybe quality, but also ridiculous or just volume of pre-sale VC, angel, seed, KOL round pitches in my entire life, including the peak of 2021. Are you seeing the same thing? What does it mean? Because I know you're probably seeing the same thing. Yeah. So I think we were fortunate enough to start allocating in late 2022 and all throughout 2023 and like the depths of the bear market.

And so I don't do that. I don't pick the investments. That's, you know, he's the head of the team. He does all that. My point is to put on the cycle hat and I say, go now spend the fucking money or, hey, we need to pull back and just harvest right and so we did a lot of deals 22 23 they're coming to fruition now now if you start and no one was allocating back then we you know we would sit around and our media like well what's a16z doing what's these big

funds billions of dollars supposedly to invest in crypto and we're not seeing them on any of these deals but now all of a sudden the market heats up and you're not seeing them on any of these deals but now all of a sudden the market heats up and you're seeing a60d 100 million dollars in the eigen layer taking the whole round like stuff like that right so there's all this money chasing you know the same number of quality projects and so right now you're getting back into the hey i've got a free product free protocol revenue thing with 120120 million fully diluted valuation. I don't want to play in that market, especially because we don't have LP's money. It's just my money.

No one gets paid once we sell stuff. This isn't like, let's market up and take unrealized gains as P&L. No, we don't do that shit. So it's like we need an exit plan. If I'm investing now, I'm not getting liquidity on my tokens until maybe like 2027. And I believe that's going to be past this cycle. And so even if we really like a project now, it's like, well, why don't I just wait for the token generation event, the TGE, and I'll buy it in the secondary. Okay, I'm not going to get the 10x or 20x price pump if I had bought it in the pre-sale, but I couldn't sell it anyways.

Let me play this cycle on a liquid basis, make my money. And then when I'm ready to really go hard at quality projects that are now in the next bear market, we're allocating what everyone else is saying, you know what, we're too scared to put money to work. So that's kind of how we think. And yeah, you're seeing so many different shitcoin funds and pre-sale deals, all these OTC pre-sale deal chats, like trading SAFs. And when everyone wants to buy something, I don't want to be buying. I just want to look at my portfolio. So we did a good job. Let's have a think about something that's really valuable that we might just be chilling out a bit and obviously doing more on the advisory side versus allocating and trying to compete with all this money trying to get into crypto all at the same time yeah so it's a little bubbly you're not really looking to throw your however many grand they'll allow that you fight for into some random gaming project in 2024 yeah and it's not that you might not make money. I'm sure a lot of you will still make money.

People will make money, yeah. It's a timeline. And we have a very high liquidity preference and we want our money as soon as possible back in our pockets rather than sitting in a term sheet waiting for your token to get released. So it's just a difference.

And obviously, if you have an LP style structure where you don't want market signals in your portfolio, you just want to mark them up periodically so that you don't see the market volatility, then you love this market because it doesn't really matter to you. You still make your 2% management fees as long as the money is within your fund. Yeah, it's been wild. So when you talk about buying on the secondary, you're just buying the launch and buying OTC. I mean, for people who don't understand. Yeah. And one of the big stories right now has been how much Solana is being sold as OTC by FTX. Right. What do you make of like Pantera raising a fund to buy Salada at 60 cents when it's trading at $2? I've heard Brevin Howard doing the same. I mean, do you think that,

what does that tell you? Or have you even seen that? I mean, again, it's really a funding trade. And I got pitched this trade as well. I think it's 38% discount or whatever it is, right? But it's locked up for four years. Again, if you have an LP structure where I charge you two, whatever percent percent as long as the assets are with me and i lock you up for five years i create some spv hey you want to buy a salon at a discount sure of course well guess what every second that you are in this structure i'm charging you fees for nothing well then yeah of course they don't give a fuck of this thing everyone locks come in% discount, but you don't get your money until four years. Just buy a fucking Solana if you like it.

And then if it punts from $140 to $200, sell it and keep doing that. You'll make more money. Or then put your fiat winnings into Athena and compound it at 60%. I don't know. I'd rather do that than lock my money up with a fund. But again, everyone's different in terms of their preferences. To me, it just doesn't work for us. You talk about that 60%. It probably just gives people like hives after hearing about 20%, 15% last time being too high. But can you indefinitely ride 60% yield?

No, it's a variable rate. It's definitely a variable rate and it's definitely predicated on the prices rising, right? Because I'm willing to pay 60% annualized interest to get leverage because the asset that I'm trading goes up 20% in two days. Do I give a fuck about paying an annualized 60% yield? No, because the thing that I'm trading is moving up and down a lot. So yes, you're getting a high yield if you do these cash and carry strategies. But on the other end, you're giving up the upside price performance. So at least for myself, I have these yield strategies that are part of the portfolio that pays my credit card bills.

And then you have the assets that are appreciating in value. So I don't have to sell assets to pay expenses. Yeah, that makes perfect sense. Is there anything else that you're really looking towards for this cycle that's got you pumped up? Let me ask you a better question because I kind of asked you that before. How much time are you spending on a daily basis

deep in this DGEN stuff, actually flipping this stuff around and playing with it? Are you watching from the sidelines or participating in another way? Because I'm watching from the sidelines. I don't have time to be on Solana sending random people money on Twitter and hoping for the best. So to me, it's almost like... No, I mean, I'm lucky enough that I can make enough money in lower yielding things on my capital where I don't have to sit there and sling meme coins over the weekend. I'd rather be working on my forehand. But for other people, it makes complete sense, right? You have a day job and

over the weekend, you're able to earn more than your monthly salary by correctly trading meme coins. I get it. Just different. I probably get involved in a more protocol level and stuff that we're advising. So take, for example, Pendle. We're an advisor. I'm writing a very in-depth piece about interest rate markets and why I'm so bullish on those coming to DeFi. And I think Pendle is going to be the one that takes it forward. Okay, well, I'm going to take some of my money. I'm going to put it in these Pendle products. I'm going to try it out. I'm going to ask questions. I'm going to figure out what I don't understand. That's where I interact with these things. It's more like I'm going to write something about it. I probably put my own money against it to see what makes sense, what doesn't make sense, and make sure that I understand it in

my own mind so that I can communicate it in a thoughtful manner to my readership. For somebody who's new to this market, or maybe has owned Bitcoin or Ethereum for a while, what's your base idea for how they should start to get more involved? Last cycle, my sort of base idea, and certainly during the bear market, is I would tell people just buy a bunch of L1s, because you're not going to find that 100X thing that goes crazy on Solana. Now you might, but at that time, you'll accrue the value in Solana by holding the layer one, right? You get the 5X instead of the 100X. I mean, is owning a bunch of L1s still a decent strategy?

I mean, how would you tell people to approach this market when they want to go further down the risk curve? I think it's, everyone comes to crypto with their own experience in whatever field. And there's probably something in crypto that speaks to that. Say that you're some sort of creative artist, maybe it's the NFT space or creator,

sovereign identity, that kind of stuff. Go to where you understand, start reading these white papers see what makes sense see we can try out they can bring this experience that you already came to crypto with into crypto and just go down the rabbit hole that way rather than saying okay whatever i heard on the discord channel that went up 100 last weekend i'm just gonna go try to ape into that and learn that way i mean of course you do that, but I think you'll find it a little bit more interesting if you try to marry it with something that you already know a little bit about. What is the problem in the old industry that maybe you work in at a full-time job that this crypto vertical is trying to solve? And does it make sense what these people are doing or not? And start your journey that way. And that'll get you to have a critical eye of reading what people say in a white paper. Does this make sense? And you'll like the fact that you've already pointed out there

will be a next cycle. So I want people to know that we're not talking about the super cycle that never goes down. I'm already getting the, now that we have ETF money, it's a new paradigm. I heard someone say new paradigm today, I almost puked, right? It's a new paradigm, can't go down anymore. We get inflows, come on now, we'll see our cycles, right? But how big can this one be? I think we get to a million dollar Bitcoin, at least like on a tick, right? I think we can get there. I think if we really see a concerted global effort by all the major economic blocks to financially repress people into buying their bonds, and we have this little door of crypto

open in the bond market is what? I don't know, however many tens or hundreds of trillions of dollars, right? We don't need all that money to come into crypto. We just need a little bit. And remember that it's a marginal price. It's not about the whole market cap. The last price is only, maybe only a Satoshi trades at a million Bitcoin, but that'll be the last price, right? That's how it works in markets. It's all about at the margin. So at the margin, if we have global fixed income investors who hold bonds who are like i'm getting a bad deal at least i'm going to allocate

some of this money into crypto that i don't think we have a big enough imagination about how high we could go because the global bond market is just so massive and when the bond investors make a decision collectively that they don't like being in a particular market, they will stampede into something else and it will cause reverberations around the global economy. And thankfully, we have this thing called crypto. We have a little small door and some people can be saved. Most people will not. But those of us who hold these assets, I think, are in for some massive gains in fiat terms. And that comes with a whole host of issues in and of itself. Is that the right way to value your portfolio or not? It's more of a philosophical question.

But I do believe that if we really hit this sovereign debt bubble, if that is deflating this cycle, then we have no, it's going to be so ridiculous how high this stuff goes. I personally denominate my net worth in slurf. I got little doggy hats everywhere. You know, I got beanies all over my apartment. Changes, so yeah. We should launch Frog with Hat. Has anybody done that yet?

Because it feels like we can- I'm sure. I'm going to have to come up with a new meme. Yeah, we're going to need something new, man. I'm going to call you after this person, you know, we'll come up with something. But yeah, I'm going to dominate my net worth in slurf and I I feel like it's going to go pretty good for me this cycle, man. Listen, anytime I need to feel bullish, I'm just going to call you. Exactly. You know, you get me turned up.

Until I'm not bullish anymore. Call me then too. Arthur, where can everybody follow you and check out everything that you're working on? On X at Crypto Hayes and also on Medium and Substack Crypto Hayes as well. Crypto Chatter Digest is my weekly newsletter-ish thing. On X still doesn't roll off the tongue for me. I know. I think it's not a verb. It's not a verb. I think Elon needs to find an X verb.

Am I like triple X-ing? I don't know. On X meant something a lot different when I was younger than oning? I don't know. On it, it's something a lot different when I was younger than on Twitter. I don't know, man. It just sounds different. Thanks so much. Enjoy your tennis game. Thank you. Let's go.