The Wolf Of All Streets - BTC ATH Everyday, ETH To The Moon? | Crypto Town Hall

Episode Date: March 13, 2024

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Good morning, everybody. Celebrating another Bitcoin all-time high, breaking 73,000 today. I think we should get less excited about that on a daily basis and sort of get used to it. Simon, you jumped right in there. You're ready. You're ready to celebrate 73,000. Yeah, 73,000 is a really nice number. I like the number 73. Yeah, it almost sounds as good as 74 almost no let's stay here let's stay we need to accumulate more yeah the train uh the uh let's accumulate at 20 000 train i think has long left the station although i'm sure there's some bears who still think we're going back to 12. um pretty astounding actually yesterday's price action for anyone who wasn't

paying attention was somewhat quote-unquote crazy. I guess that's what we think is crazy. I would say the 69 to 59 back to 65 day was crazy. But once again, we had this tremendous... And maybe Dave, you can dig into the numbers, whatever happened. But we had this tremendous spot demand going up against over leveraged degenerates who got wiped out really quickly, which we see over and over again, and will continue to happen in this market. So we saw a price basically up around 72-ish, dumped down to 69, which by the way, I even asked Peter Bray yesterday, hey, shouldn't 69 be like a key support that should get tested now? He said

he didn't really view it as such. I did. But we saw basically go right back down to the previous all-time high and bounce and go up higher. And we saw over $300 million in liquidations as usual, and price went back up. What I find notable, and I said this on my show, I was talking to Chris Inks, who's here, and Matt Hogan. I said, listen, what's crazy is that the people who are getting liquidated are long. Like, if you want to know about not using leverage, literally people who are betting on price going up are the ones who are losing all their money as price goes up. Because they're using too much leverage, they get flushed,

and then price goes right back. So I would just say, hey, kids, avoid the leverage. But Dave, I mean, is that effectively what we're seeing? I mean, you're obviously digging into this every day at CoinRoute, increasing spot demand with leverage traders getting wiped. No doubt. I mean, it's funny for anyone who has not heard me recommend my favorite book in trading is the is Reminiscences of the stock operator by Jesse Livermore. And effectively, what you're seeing take place is literally the price action he described back before, you know, in the 1800s and early 1900s, when you were allowed to buy stocks on 98% leverage, so-called bucket shops, and how the bull syndicates would engineer wipeouts to flush

out the leverage so they could buy cheaper and then turn around and buy more. If it wasn't for the fact that history always does tend to repeat or at least rhyme, it would be comical. I mean, I was looking yesterday, I almost tweeted how in a one day piece of trading, a one day period, actually it wasn't even a day, it was like eight hours, we saw a literal perfect textbook, inverse head and shoulders. Now, I don't know any technicians who think an inverse head and shoulders in a day is meaningful, but it is funny how it carved out because essentially it was created from that flush. Yeah, I think we're going to continue

to see this. Larson, I don't think we've had you on here, man. It's been a long time since we've spoken. What do you mean? Glad to have you here. What do you make of the market right now? Yeah, thanks for inviting me. It's great to be here. And yeah, I thought I would say a few things.

I read now that a lot of traditionalists are waking up and they're kind of concerned with the question, like, how can one Bitcoin be worth so much? Like, how much is it even worth? So now that question is coming back. And I thought to share that it really helped me so much. This one quote that someone said at the beginning of my journey that forget about that question. Forget about how much an asset is worth and instead focus on the behaviors of the buyers and the sellers, because often that is much more useful. It's much more practical. And I see now again that many people get like a mental block around that. Like, how can this thing that's not backed by

anything be worth $73,000 or $72,000. It's impossible. It's not worth that much. That's how they are thinking. While at the same time, if instead taking this perspective of the buyers and sellers, we can see what happens, at least on the ETF side. That's like a billion dollars inflow and barely any outflows. Okay, then price goes up. And that's all there is to it.

And that's a much better perspective. And then we talked, yeah, like you guys talked about people are getting liquidated. And I think that's the other perspective that maybe can be good to have with us through this whole bull run. That there's basically two ways

to look at price action. And it's either like a mean reversal. People are mean reversal trading. Mean reversal, that means that if price goes up a lot, you expect that it should go down. That's what people, that's the most intuitive mindset. If it goes up that much, it should drop, right? That's why you see a lot of traders on social media and so on, they go in and short.

They go in short the whole time because they feel like if it's going up that much, it simply must drop. So they take a short and then they get liquidated because it continues going up. And the other perspective is trend trading. Like basically everyone has heard that trend is your friend. And in technology specifically, the second one is much more useful because the trends can get so sticky and they can go much more much longer and much higher than even the biggest optimist can expect and i think that's

what we're in now we're in this trend the trend gets impossibly sticky and they go impossibly high. And it seems unrealistic. And a lot of people will expect that it will drop. A lot of people will take shorts and get liquidated because the trends get so, so sticky. And I think that will continue. Yeah. In the words of that Little Bubble, Michael Saylor, they will be poor. Right.

The video that Little Bubble put out yesterday, which I can't stop playing. You know, as a former DJ, I'm very entertained. But listen, yesterday, I mean, just to put some math behind this, obviously, we see price drop to 69 and bounce right back. And people say, wow, that's crazy. Well, we had over a billion dollars in net inflows into the Bitcoin spot ETFs yesterday. That's almost 10% of all the net inflows yet. The previous biggest day was around between $600 and $650 million in net inflows. BlackRock over $15 billion now in AUM. Bitwise over $2 billion. Bitwise being the leader for

the crypto native, but being over $2 billion, I think, is the expectation people maybe had for BlackRock in 6 to 12 months. So the buying here of these spot ETFs is astounding. And we've had it coming in a slow trickle because platforms are only slowly coming online and even gaining access. I had Matt Hogan from Bitwise on this morning on my show, along with James Butterfield from CoinShares. And when you put the data behind it, it's very hard right now not to expect that at least in the short term, because of the way these are rolling out to multiple platforms that we don't see the continued demand. That doesn't mean that there can't become a huge seller in the market that counteracts that. But right now, it still seems like we have tailwinds. And to CTO's point, the price in a vacuum is irrelevant. It's just simple supply and demand. And right now, there's more demand than there is supply. And so I would not be

surprised to continue to see these. I mean, Simon, you've been here since the very beginning. What's it like to see these numbers rolling in ahead of the halving cycle? We weren't supposed to make an all-time high until November, December if we did in the four-year cycle. Dave, I know you laugh at it. But Simon, you know, that's poor thinking, because he was really trying to explain what I think is a major psychological shift that most people find hard to get their head around. And it took me a long time, it took me going through the first four year cycle, to really ingrain it in my head. And I think it takes that four years until you can actually adjust yourself to Bitcoin thinking. And Bitcoin thinking is, it always feels like that it can't go any further. It always feels like it's too late.

You've missed the boat. And whenever it crashes at the bottom of the market, it always feels like, all right, maybe, you know, that dream is over that we were going to do something that could operate outside the banking system. It was good while it lasted. And so you're ingrained to think that way that is within your psyche. And it comes from, you know, how everyone thinks about something like this. And so the the rather than thinking in terms of what is it like to have $73,000 Bitcoin, it's about thinking, you know, in terms of, well, if I don't own Bitcoin, what do I own, and then you price Bitcoin against

dollars, euros, real estate, gold, every stock market, every single asset. And you find out that every asset is in a bear market when priced in Bitcoin. And then you've got to get your head around that. And when you get your head around that, you just realize that your job is simply to off-board as much fear as you can afford to cover your expenses, save in Bitcoin, and not really concern yourself about the price. And that is a psychological shift. And so that's what Michael Saylor was just trying to say. But at what point do you sell? Well, sell means buying dollars.

And buying dollars is a really bad strategy unless you need those dollars for utility. And the utility of dollars is paying your rent without currency risk, paying your mortgage without currency risk, paying your staff if you've got a company. But in terms of saving technology, dollars is the worst type of tech. Well, you know, it's the best of the worst type of technologies that you could use. And if you can get your head around that, you can get your head around $73,000 Bitcoin. And if it goes to $125,000 Bitcoin and crashes to $25,000, not be one of those people that says, oh, if only it goes back to $25,000. And when it crashes to $25,000, you don't end up buying it anyway, because you think it's all over.

And that's the cycle. We've seen it for 13 years, and it will continue to persist. Yeah, I mean, people will buy three-day-old moldy bread for a 15% discount at the grocery store, but they won't buy their favorite financial assets when they're on sale. So like literally the only thing that humans are somehow programmed not to buy when it's on sale, but it's really pretty astounding. There's something else I just want to mention. I'm looking right now on BlockDative.com.

The Denkun upgrade, which nobody's talking about seemingly on Ethereum, was supposed to happen. I'm assuming it happened about 30 minutes ago. 155 UTC at Beacon Epic 269568. I can't confirm if it did, but I believe it should have happened just now. Again, this is one of those things that it happens and woohoo, and nothing actually happens. But this upgrade allows for almost non-existent fees on layer twos on Ethereum. This should be, I think, wildly in the news. I think everything's just getting sucked up by the Bitcoin spot ETF vacuum. Have any of you guys taken a look at Denkun or what's happening with it?

Or am I the only one because nobody's paying attention? If you have, feel free to jump in. Go ahead, CTO. I think it confirmed. I think the upgrade happened as far as I can read. And it's interesting, actually, to Simon's point, that if pricing everything in Bitcoin, at least trading and investing gets a whole lot easier. Absolutely.

And that's my strongest recommendation to anyone into altcoins or basically any other asset. Do exactly what Simon says. Price it in Bitcoin instead. It gets much easier to see what's going on. And if pricing Ethereum in BTC, it's much clearer to see that it looks actually like it could be a bottom that has built in the chart. Remains to be seen, but there is a rectangle bottom in that chart, which has confirmed

on the upside and so it could be that ethereum that has kind of been a little bit the lost soul here in recently perhaps we will get new light and we'll have to see of course it is really challenged by particularly solana and the solana ecosystem which has come with a proposition of some more simplicity, perhaps, and traded some decentralization, perhaps, for speed and cost and simplicity and so on. So it is a very interesting point in the market. But I have actually been interested in this Ethereum bottom building for some time. And perhaps it is something like this upgrade that brings attention back.

This is all lost if looking in the USD chart. Then Ethereum has gone up a lot and that's all you see. But if pricing it in BTC instead, it gets much more interesting. Because anyone can see that everything is going up in usd terms but is it going up in btc terms that's the question yeah chris i know you have thoughts on that and that both of us have been talking about that ethereum base for a very long time but yeah jump in on your thoughts on ethereum here price action wise yeah man i mean you know again like you said we've been talking about it for she's i don't know it seems like forever right and everybody was all

upset and everybody's all freaking out. But I mean, at the end of the day, remember, Ethereum hit its bear market low in June of 22 before, you know, Bitcoin hit its, which was November. And so then Ethereum just continued to consolidate, you know, to accumulate there from that June 22nd until, what is that there, right around December of 23. And then we popped out and we just had some hot sideways on it. It seems like people got even more bearish over that little bit of sideways sitting on top of the breakout there from December until February. And then it just took off, right? It took off like a scalded cat. You know, I've still got, you know, this initial target, interior target here at 4626. And we're sitting at just below 4000 at the moment. And so, you know, I mean, it just, it just continues to show, you know, all other narratives and all other, you know, fundamental stuff, whatever out of the side,

it just shows how, you know, how people tend to get and, you know, that pessimism that we saw, that's the kind of sentiment you look for when you go, okay, you know, we're getting ready to kind of take off. And so, yeah, I mean, I think it just continues, you know, running overall. You know, I mean, I'm sitting here looking at the daily stochastic RSI and that thing is almost reset. And all we did here was go, let me see here, from basically around 4,100 to a pullback of about 3,935. So, I mean, very, very small pullback. And we've almost reset that stochastic RSI. And so I'm just looking forward to continue further here.

Simon? Yeah, so again, like CTO said, if you price your Ethereum and Bitcoin, you realize that there is definitely, it bounces around a certain trend. But once you've got your core Bitcoin position, the reason I do like Ethereum as a longer term investment vehicle is because it is higher risk because it can change and it does change. So today we had the upgrades and the upgrade is really focusing on enabling layer twos because it realizes Ethereum now is a proof of stake network, there's genuine risk of it being owned by the stakers. And the stakers are currently the exchanges. There's massive centralization in terms of the pools of staking. And as we move into an ETF era, that becomes a real governance issue. But at the same time, because you can stake it on chain, you can earn non-leveraged, non-interest bearing yield, which essentially is just the function of the adoption of the network, which creates a deflationary supply.

But people find it a lot harder to understand the economics of how Ethereum works. But the way to think about it from this perspective is when you're pricing it in Bitcoin, think of Ethereum like a non-interest bearing bond market that you can then kick off a coupon. And with that ETH-based coupon, you can trade it into Bitcoin and always end up with more Bitcoin every day because you're utilizing this higher risk, more leveraged proof of stake network in order to accumulate more on the Bitcoin proof of work network. That's how I think about it. That's a pretty good framing for Bitcoin maximalists to look at a way to make more Bitcoin, right? So I want to provide maybe a different framework to think about it, right?

If you are someone who understands Bitcoin as a long-term Bitcoin holder and believer, and you're thinking about a long-term as opposed to a short-term allocation to Ethereum, I think these things have very different narratives and very different long-term theses, right? Bitcoin is really all in on the hard money narrative. I don't think that's something that ETH can credibly do because of how often it hard forks and that there's not a definite monetary policy associated with it. ETH is, in my mind, more of a call option on the Web3,

DeFi, we're going to do non-Bitcoin crypto stuff on the blockchain future, right? And you may or may not believe in that. You might believe in some parts of it or not others. You may believe that that stuff will be built on ETH or you might think it'll be built on custom built blockchains, right? Or ETH layer twos or even on Bitcoin. But I think over the long term, if you're just trying to get beta to Bitcoin, it might make more sense just to have, you know, either leverage Bitcoin exposure or, you know, even riskier altcoins that tend to pump harder. I would see ETH as like a really different, you know, investment thesis that you really have to ask yourself, do you believe in if you're going to hold it out for the long term? I agree that they're separate investment thesis. It's always been my case. I say it every time I'm interviewed that, you know, you have Bitcoin. I view almost Ethereum and altcoins as an entirely different market than Bitcoin. So what I see, obviously, Bitcoiners get angry about Ethereum, which I guess intellectually understand. I always sort of respond that it's like gold bugs getting pissed at someone for investing in Amazon because they believe in Amazon web services. You know what I mean? Like I just view them as utterly different assets and non-competitive. So

there's room for both without viewing one as a threat to the other. See, Scott, I completely agree with that. But they did shift the economics with the merge. You have to be comfortable with what Ethereum is, right? So like, I agree with you. Exactly. Yeah. So it is, you know, you do get a higher burn as a function of the adoption of the networks. And you do have, although you've got that whole DeFi, you know, side of it, which is an important side, you've got the competition of whether that ends up on Bitcoin, which is a new emerging trend, which we've been waiting for for like 10 years, and now it's kind of coming back. But also, there's the centralized adoption that most stable coins, although,

you know, you kind of put them on. So for example, a bunch of it went on to tron um simply because you know it was cheaper uh and then some and then all of a sudden you know usdc and circle tried to go public and they realized that they might be in the middle of a blockchain that is in the midst of a money laundering investigation so then they have to switch it back to Ethereum as kind of like the more reliable chain. And so if someone is issuing a stable coin, while they could go for cheaper, faster, better fees, there is a function of, you know, if the ETH ETF is approved and staking as a service becomes clarified in the US and virtually in other places, which is big ifs at the moment, then you do have a proof of stake network that has more stability if you're making

a very long term decision. And maybe, who knows, some municipality, some central bank into the future says, well, actually, rather than trying to own our own chain or using a private blockchain owned by JP Morgan, maybe we just want to issue these things on a proof of stake network and have a big part of it. So there is a centralized play and decentralized play there. Yeah. And to your point, Simon, then you get further down the sort of curve of differentiating why people are using these things and on different chains, right? Where we start the conversation with Bitcoin and Ethereum as investments and how people should frame that. And then you get down to TRX, right? To Tron. And the bulk, over 50% of Tether's market cap, over 50 billion of it last I checked, was moving on Tron. That has nothing to do with people's belief in Tron or an investment or a comparison. That's because as you said,

it's faster and cheaper and those are people who are literally using this every day to survive, right? Those are people who are transacting daily in Tether to either do remittances, buy things, or just get out of their hyperinflating currencies. And that brings us back to the upgrade today, because the upgrade today is about being able to, you know, get get more adoption on layer two so that things do stay on ETH. And then the stakers can benefit from the burn and the economics behind ETH. Alexei, go ahead.

To add into that, I mean, yes, absolutely, ETHL2 has contributed to this, but also Bitcoin is moving into the ecosystem. And it's not just projects like Bob, which and a few others that are coming more in from the Web3 native side and trying to enable Web3 use cases. You also had Marathon Digital announce that they're building Layer 2s now and focusing on institutional use cases. And I do think that this potentially challenges this institutional play that you just described for Ethereum. Because if you look at Bitcoin right now, that has regulatory clarity, right? Mining is a much older business model and much better understood than staking, and especially from regulatory perspective. So having now EVM based, like layer twos on Bitcoin,

secure by proof of work, that offer you the same feature set as Ethereum, I think that could definitely be a challenge because you have cheap transactions, you have fast block times, you have high throughput, but no longer the risk potentially to uncertainties around staking. Now, of course, that comes more from this new batch probably of merge mind layer twos that Marathon recently announced. For us, for example, as Bob, we are a hybrid. So we definitely kind of sit in between these two ecosystems. So for us, this kind of complete independence of proof of stake does not apply.

We leverage that for actually connecting to the ecosystem. But on these new designs of Bitcoin-focused sidechains, I think that could be an interesting place specifically for institutional adoption. Simon? Yeah, I completely agree. And I think it is a two-tiered thing. So that's why it's so ethereal. That's why it's so interesting,

this whole Bitcoin and ETH thing, and being able to create that competition for the different types of use case. So now Ethereum has tried to adjust itself to more of the store of value economics. And then Bitcoin has now decided to adjust itself to a culture of more of the different types of use cases. And then you've got the two different cultures, right? So one is you accept and you submit that decentralization matters or you have the culture of control. And so that's the big difference of why some would choose.

And these decisions are going to be punished into the future because the truth will prevail but the the advantage with ethereum is if you come from a culture of control you could cut you could try as a large bank or financial institution to own the entire as much of the stake as possible like michael saylor is trying to accumulate and get to that 1% position, which I think is now reached or about to reach. And so it's kind of like, you know, if you were thinking forward as a large financial institution by owning more and more of ETH, it's a bit like having your shares in the Federal Reserve at the formation of the system. So you can manipulate the whole system for how you want

it to go, but you can't do that with Bitcoin. So that's why it's a bit of a it's a bit of a two tiered play when you're thinking along those lines. Can miners do that with Bitcoin in theory? Well, in theory, but you've got the separation of the different parts of the ecosystem and nodes and mining. But yeah, you yeah, mining has always been a certain centralization risk. Right. I mean, we used to fear China, right? I mean, China had 40% Bitcoin mining or something at the peak. And then obviously, China went offline and everybody panicked. And apparently, we had a bear market because China was no longer in the market. Right. But there have been centralization risks to mining in the past.

Yeah. So now you get back down to the big block, small block debate, because then it's important to have node operators that can afford with small blocks in order to have a way more decentralized network. really come into play when you start to see these large financial institutions getting into the mining side and the importance of having a decentralized network of node operators marshall you were giving the hearts and you're my go-to mining guy sorry zach marshall then then zach okay well we all know bitcoin classics the real bitcoin all right so i just want to go ahead and put oh stop uh no it's stop. No, it's interesting, right? I was talking a lot today earlier about how I thought that there would be a lot of sell-off from mining stocks into the ETF. And we kind of saw that early, but we didn't really see that anymore. And I think people are starting to realize that mining is just like a high IRR business.

Like if you run mining well, you're not going to get better IRR anywhere. And it's just like it's a good commodities production business. And that's just I think the street's starting to wake up to that now, which is good because now, you know, before all mining stocks would trade with Bitcoin. A perfect correlation. Now you're starting to see a bifurcation between good operators and bad operators. So, I mean, overall, from the mining sector, I'm excited to see that. On the Ethereum stuff, look, I think any rational Bitcoin maxi would say that if Ethereum was just marketed as like the world's decentralized computer, and you can do all kinds of crazy stuff on it, you can do all kinds of crazy stuff on it. You can do all kinds of cool things on it.

I don't think anybody would have a problem with that. I think the rub comes where people start conflating it with a monetary instrument. It just changes a lot, I think, to Simon's point. But yeah, I think what the SEC is going to do regarding staking, I think, is probably the biggest hangup. I'm most interested to see how they regulate that because I think that is huge regulatory capture potential and how people can... It just seems... I don't know how that plays out. That's what I'm most interested to see. Zach? I just want to make two quick points. So one, quickly on the staking, I think

it is important to distinguish between native staking and then staking as a service. And I think when we're talking about securities law, which we often are in crypto, I think native staking, at least in my judgment, does not look like any kind of securities offering. You're providing a service to the network by honestly validating blocks. You get rewarded with new issuance of ETH or whatever the native token is. You get punished by slashing if you don't do it, and that's a service. Now, staking as a service looks more like you're just getting yield. Someone else is doing the work for you, depending on how active they are in running the

validator nodes and making the decisions about how much yield you get and what blocks to validate and avoiding slashing, right, you might be reliant on their efforts. And I think the line will probably there be drawn somewhere, you know, between the sort of rocket pools and the LIDOs of the world, which seem like they're really just passing on the ability to participate in staking to users. And then, you know, what we saw with Kraken, which is much more of a custodial, seem more like a securities offering product. The other quick thing I wanted to say is we're talking about sort of what ETH is and what the long term view is.

And one of the lenses I think might be helpful to think about this is the debate between sort of the Solana ecosystem and the Celestia ecosystem about modular versus monolithic blockchains, which I think is going to be one of the big themes of this cycle. Do you have one blockchain, you know, sort of like Solana, that's meant to be fast for applications at the base layer and encompass everything? Or do you, you know, have a modular blockchain where, you know, you have a core layer one, and then you have other parts that are that are bolted on to do specific tasks. And I think if you are look to look at Bitcoin, the extent that there is going to be crypto on Bitcoin, it's very clearly going to be modular. If you use that new framing to look at sort of the old system, we're not going to make compromises at the Bitcoin layer one to the sound money base layer in order to add crypto functionality, right? The stuff that people have figured out with ordinals,

basically are loopholes or things that people have been able to figure out and not things core devs have added. Ethereum, I think, doesn't quite know what it wants to be between a monolithic blockchain and a modular blockchain. I think it started out as a monolithic blockchain thesis with the world computer and everything that's going to happen on Ethereum. Then fees got really high. There's competition with other blockchains. And I think it's moved in a more modular direction with L2s. But if you look at these hard forks, two recent ones, 1559, which seems to try and compete with Bitcoin for hard money by burning supply and becoming deflationary.

And then the recent one, the Dekun upgrade that just happened today, I think is really meant to compete with Solana and losing retail market share for people who just want to trade meme coins and not pay big fees. It really seems like ETH is just going to try and grab at whatever the narratives are. And I suppose you could see that as a good thing, that it's going to be the most adaptable blockchain and it's going to try and be everything to everyone. But if you were going to give the negative case, it's that it doesn't seem like there is a coherent thesis around what Ethereum is supposed to be. Zach, I asked you a question because I actually don't know the answer. You said that Dancun is sort of a response to Solana. I'm not sure. So that's why I'm asking. Wasn't Dancun, I'm assuming, part of the original roadmap that the merge was sort of the beginning of?

Or was this something that actually was sort of considered and come up with because of what's happening elsewhere. I was under the impression, I could be wrong, that Denkun has, you know, that this series of upgrades were there from the very beginning. So it wasn't necessarily in response to what's happening. Yeah, I don't think it's an either or, right? I think if you look at when these things get adopted, right, the merge had been promised forever. And then it finally happened when it happened. And around the time of 1559, because of the post block size wars, Bitcoin really won the sort of hard money competition. And the small blockers in Bitcoin won over the big blockers. And I think that's sort of what allowed 1559 to be popular and move forward, that Ethereum wanted to play in that hard money space. I think it's also not an accident that Dikkun is happening now when the meme coins that are

going crazy are the ones that it's really cheap and convenient to do on Phantom Wallet, on Solana, because Solana is really more meant for those transactions. And paying $200 in gas fees on ETH is not going to work for people who want to bet, you know, 20 bucks on dog with hat. Can I add one perspective on this with monolithic versus modular or whatever we call it? Because I've been through this journey one time before, for everyone listening, I was part of creating the mobile data networks that we use today. And it's funny because we had the exact same discussions maybe 20 years ago or something like that. Because the idea that what

seemed the most likely outcome was that we have separate, somehow sliced the networks. So we have different use cases, have different slices of the network. Perhaps if you want something really reliable, you're willing to pay more. So you can have a more reliable fixed or mobile network. While if you're doing something which isn't that important, but you're very price sensitive, maybe you have like a cheaper, a little slower network and so on. And we actually thought that would be the future. In the end, it hasn't been. If we look at at the world today most companies or most use cases using fixed or mobile internet networks we just use the internet you just buy the best access you can

to the internet and you just use it and hope for the best so that became the outcome in the end for the mobile and fixed data networks which kind of is a little bit unintuitive and surprising, perhaps. But that is the reality. And then we can discuss why did that happen? Why don't we have different slices of the internet for different use cases in practice and different companies? Why don't they have their own networks in the end that have different characteristics and so on?

And I think it has to do with laziness. We're all pretty lazy as a species. And we tend to just do what seems the simpler and the most obvious option. So I think I don't have the answer. And I don't know what will happen this time. But it is food for thought if people in the end will will give enough life to all these separate late twos and and so on to really give them life or if people get will get lazy this time too and just use layer one simpler option somehow or if one layer two will become the

internet somehow and then you occasionally settle back to layer one. One of the layer twos will become like the dominant network, and then you occasionally settle back financially on an expensive and slow layer one. Go ahead, Fano. So we actually, so this is our first time on the spaces. Hey, it's an honor to be here. My name is Jordan. I'm one of the advisors of the FOMO Bull Club, which is a multi-chain decentralized launchpad and liquidity hub for mean coins. And we're going to be launching first on Polygon.

We're moving to Ethereum, Sui, Solana, Manta Network, and all those different things. So, one thing that we're seeing, and we do a lot of research on this, is around, you know, the different liquidity layers. And the reason we chose Polygon as the first place that we really want to launch this for meme coins and making, and drive volume to each chain that we're on because we're like a lightning rod that brings attention. It's an attention economy, right? So, Polygon 2.0 is going to be coming out Q4, and that's going to be an ag layer of all the different ecosystem partners. That'll be Polygon POS, that'll be with Validium, with Validium, CDK, ZK-AVM, and then also all of the other blockchains out there and all the, especially the EVM layers can plug into that ag layer and

create basically like the internet of Web3. And so, that's the reason that we chose Polygon. So, you know, to kind of, you know, try to like, you know, let everyone know that these types of things are being worked on. They've been worked on by amazing teams that have tons of funding. And this is also something that's going to help us to create that mass adoption that we're looking for as retail comes in. Because as I think it was, Zach was saying with Denkun, right? I mean, of course, that was on the roadmap because you can't have mass adoption on Ethereum without lower gas fees, right? That's one of the most exciting things about these other blockchains is that people can get involved. You know, you got 3 billion people in the world right now

live off of less than $1 a day, right? And they can't pay a $20 or $30 or $40 or $50 gas fee to try to change their financial destiny. So, you know, that's definitely something that we're excited to see coming. You should explore Bitcoin a little too, man. Like we have the same thing happening around BTC and with the inflow of interest from builders and users back to Bitcoin, I think you'll see a lot of excitement around this.

In fact, we hosted the Bitcoin Renaissance event at East Denver, right? It was a Bitcoin focus event at an ETH conference. We had 1,500 people attend. Polygon was actually involved. We had Sandeep come on stage. So I think Polygon is also obviously excited about the Bitcoin space because you have quite a few teams building in the Bitcoin ecosystem. So yeah, I mean, if you want to explore Bitcoin later, too, let me know.

I think there's a lot of interest and opportunity to bring fun back to Bitcoin. We would absolutely love to explore those opportunities. We've actually talked with different ecosystems like, you know, Syscoin and, you know, what's happening with Rolex and things like that with the Bitcoin, you know, layer two, layer one, you know, type of narrative. So definitely DM us so that we can continue those conversations i'll shoot the idea all right i'll actually how close are we on these bitcoin layer twos you know we have this tendency in crypto obviously to get really really excited about things early and then we're kind of a cycle before they actually you know sort of proliferate and

become popular seems like as much as being, perhaps obviously these other chains have a massive head start. Ah, tomorrow. No, I'm kidding. Obviously, in crypto, we tend to get overexcited. I think you'll see two things though. I think you'll see some of the groundbreaking tech going live over the next year, but that's still going to take a while. So BitVM, which really is a game changer and allows us to do optimistic roll-ups on Bitcoin, that is happening. There's lots of work being done. There's more and more funding flowing into that. By the way, if you want to support, let me know. We're also helping with open source funding for the developers there. But that's going to take probably a year. My gut feeling, and I would be conservative if I say probably a year, but you have teams launching with middle ground solutions that, for example,

we leverage ETH as a bootstrapping layer and then add security through Bitcoin prefer work and merged mining a couple of months down the road. And we're launching at the halving. And then there's a few other teams I'm aware of that are also pretty close to launch. So I think the Bitcoin halving will really kick off this, hopefully. Well, I'm pretty sure it will be a Bitcoin summer and you see us and other L2s go live and start competing for the market. And probably vampiring and sucking off liquidity from many of the Ethel 2s that will struggle to differentiate themselves, I think, to be fair. And one thing that's important to recognize, too, is when it comes to meme coins,

because we're talking with tons of different chains right now, right? Every chain wants meme coins. They want successful meme coins on their chains. And, I mean, it's like, because they understand that it builds the culture, that it builds the ecosystem that it brings eyes on, right. It brings lots of exposure. And so, you know, we, we, we just can't wait to launch what we're building here with FOMO bull club, because we're unruggable, you know, we were, we're community driven a launch pad. You know, we,

we take out a lot of the risk with meme coins, especially with, uh, with the retail. So, you know, what, so one, one of my good friends is actually Nathan with a crypto magazine, and he does a lot of research on what's happening, you know, a different sentiment around crypto and, and also the, the different things and experiences that people have, especially retail when they come into the crypto space. And what they found is that 70%, 70% of people that come into crypto for the first time, they either get rugged, exploited, have a bad experience. And so, and a lot of that's because, you know, they get caught up in the FOMO, right? They get caught up in the FOMO and the hype of meme coins and they get into meme coins of teams that are there to just scam them, right? They're there to just do something that is... Just use them as exit liquidity, right? And I can speak to this because I actually am the co-founder of Polydoge, which is the most successful meme coin on Polygon. And so I got to see like all the inner workings

of how to create these communities and how to really take care of your community and make sure that you do things the right way and intentionally, right? And so- Yeah, still 70% of those people are still gonna lose their body dude, right? I know

your name is FOMO book club, and we're talking about the negatives of FOMO in meme coins. I'm not really being critical at all. I made the point yesterday that I think meme coins have probably brought more people into crypto and NFTs as well than almost anything. But even, you know, if they're unruggable or whatever, I mean, at the end of the day, it's a game of hot potato where most people are going to lose their money. Correct. Well, that is correct. I mean, that's correct. Like, you know, you're, you're not going to be able to, every bet that you make is not going to win, right. Just like with startups where it's what 3% that make it within the first two years. So, I mean, you know, obviously it is a game of, you know, numbers and trying to find a community that you can really get behind and that you can support and build with, right, within a meme coin ecosystem.

Obviously, 99% of meme coins don't make it, right? They don't even make it past up to 1 million. And the ones that do, people buy at the top and then lots go down. Like Doge is the most successful meme point of all time, obviously has a long history, but most people bought it at 70 cents or higher. I'm not saying they won't get their money back. It won't make new all-time highs. But most people bought it like my aunt who was calling me, telling me that Elon Musk was going on Saturday Night Live.

And saying, Elon Musk was going on Saturday Night Live. Should I buy Doge? I said, no, everybody should literally sell it this second because you called me and asked me that question. I remember that. And I was also a part of that FOMO club at the time because Dogecoin was one of my first crypto investments before I got orange-pilled. And so, yeah, I remember seeing that and going, oh man, what's happening? Why is it going down? Right. And yeah, it's not easy to navigate this space, but we definitely are helping to create

less risk, right? Less risk for the meme coins. I can appreciate that because meme coins aren't going anywhere, right? So... No, definitely not, not. Definitely not. Doge is a funny segue. My, my wife who happens to be on stage loves to remind me of what our doge would have been worth if I hadn't traded it through the 2016 and 2017 cycles. I think we did the calculation of somewhere from 40 to $60 million, which I was playing with to make 10 and 15 grand here and there with Chris inks over here when we were trading at the, on the Bitcoin cycles. But we're talking about mainstream adoption and the

fact that meme coins have arguably brought in countless people. I actually formulated a thesis yesterday live here that maybe when we reach all-time highs in Doge again is when mainstream will get involved and excited again because they won't be underwater anymore. And, you know, meme coins have for better or for worse been a massive gateway. Another thing that we have when talking about mainstream adoption is that we have these moments in time when we have either huge celebrities, artists, politicians, whatever, start to talk about Bitcoin. And one of the lead stories actually today,

and I talked about on my YouTube show, was that Drake on Instagram shared a Michael Saylor video. Drake obviously has, I believe, like 146 million followers there. And shared a video where Michael Saylor was effectively saying that you wouldn't sell part of your Manhattan real estate to buy a cup of coffee and that Bitcoin doesn't need to be a currency. It's the same one where he said that it would eat gold. Emmy, you're here. You're a huge Drake and Saylor fan. I want to know if you actually saw it in passing or heard about it. I want to get a pulse for how many people actually saw this. Oh, yeah. Well, I think I was in the top 1% of all Drake listens on Spotify, so you could consider me a super fan there. Um, but yeah,

I saw it come through on his, but I'm so like jaded by crypto news in general. I'm just like, Oh, Drake posted a sailor video. Cool. I didn't even think it was like that big of news until I, of course came on Twitter and saw everyone tweeting about it. But, um, I don't know if you guys saw, um, I think that was the second best Drake video that came out in the last month, to be honest. I don't know if you saw the best Drake video. Drake posted nude selfies guys. So yeah, if you want to get super awkward. Anyways. Um, but yeah, I mean, I think obviously mainstream adoption is going to happen through celebrity as well, like celebrities pushing out content like that.

But as a huge Taylor fan as well, like it's just good seeing those two worlds come together. I mean, he's, Taylor's going to always be, you know, the closest thing we have to Satoshi I feel like at this point. So it's, it's always good to see it come through. What I found interesting about the Drake video is it's completely organic, right? I think last cycle we had all these, like, forced money grabs by celebrities,

you know, like the Soulja Boys and, you know, the Kim Kardashian, obviously, Ethereum Max, which, you know, her getting charged for that was complete bullshit. But this is, to me, this is slightly different because it's just something that it seems like, you know, Drake was watching it and decided to share it with his fans, right? So do you think that there's like a public perception or a difference when something is clearly like a forced paid advertisement versus when you just have this sort of organically happening?

Oh, absolutely. And I think the fans can see that as well i mean the drake often he's a he's a pretty known gambler like he's constantly posting his bets um you know betting on sports and other things so uh so i think his fans are used to seeing that side i think you know it's just going to come across more organically if he's just posting a raw video that he found online as opposed to hey guys buy this shit meme coin and see what happens but uh but yeah i mean marketing in that sense is always going to work better when it is organic rather than a paid advertisement or you know some brand trying to get you in on their pre-sales for a like of a tweet. Yeah. And Drake, as you mentioned, I think he made a million dollar Bitcoin bet on the 2022

Super Bowl. So this is nothing new from him. He totally gets it. It was just sort of in a different sort of market when that happened. By the way, imagine what that million dollar bet would be worth at this point. Have we seen any other kind of, not to Emmy necessarily to anyone else, like have we seen anything else on this scale or like this that was organic of late or has it only been sort of the paid things? We always get all the negatives from politicians, but we haven't really seen a wave of celebrities in Bitcoin this time. Am I, Am I wrong?

Does anyone, I mean, Carlo, have you seen anything you haven't spoken? I'm trying, I'm actually struggling to think of another example like this. You know, it's funny you baited me into this space because of the title with the NFT bloodbath. You're welcome. You know, I haven't seen a lot yet, but that's not to say that it isn't coming, because I think you're going to see a lot of celebrities like Snoop who may rotate back in. But I think they are also, to a certain extent, somewhat gun shy because of all the lawsuits we saw coming down against influencers. So I think they'll probably be more cautious. Drake endorsing Bitcoin through the sailor video is probably a safer play for him because Bitcoin has been deemed to not be a

security across the board and more centralized or decentralized, I should say. But when you're talking about coming in and endorsing various L1s and L2s and shit coins and NFTs. I think this cycle, they'll probably be more cautious. They'll do the cost benefit analysis, I'm sure, the Kardashian factor where they'll decide how much can I make on this and how much is the SEC going to tag me? None of this is legal advice, of course, but that's going to probably be the game that's being played. Yeah, sorry. My question to that then is, obviously Drake posted this organically, right? The Bitcoin Association didn't call him up

and offer him money for it. What about when a celebrity talks about one of these things? Elon Musk with Doge, right? Clearly there's nobody from Doge that's paying Elon Musk to talk about this token. So is there a risk to somebody talking about a token literally organically if it's an unregistered security, if they're not getting paid in any way, shape, or form? It's an area that is still obviously emerging, and it's very much the Wild West in

this space right now. But if you look at the disclosure requirements, generally speaking, the FTC requires that if you have a financial interest in something, and if you're talking about it and you have a huge platform where you are actually, you know, in these days, it's not a big stretch to be an influencer in any space. But if you're an influencer and you're talking about something that you have an interest in, in trying to drive the price up, well, that certainly gives you exposure. So you have to disclose any interest, always say, I own this. Disclosure.

Yeah. Yep. Disclosure. The other... Zach. Yeah. I was going to say, the other, I think, area of law that's really not settled here, but is potentially incredibly problematic in the crypto space is how insider trading laws apply to crypto. And interestingly, insider trading laws don't just apply to securities, they also apply to commodities trading. And crypto is in this weird space where a lot of these tokens are both publicly traded, and they're essentially startups.

And we have frameworks for, you know, what we do with startup equity, where everyone has inside information who holds these closely held shares. We have, you know, legal frameworks for public companies and how careful you need to be about statements and what material non-public information you have with those. But the mashup of the two that you see in crypto, we have some precedent for securities and non-securities where people have been charged with insider trading, like in the OpenSea example, in the Coinbase example. But what does that mean for someone who has, you know, non-public information or who works, you know, with a project either directly or as a service provider who wants to

trade in that token, I think is a big open question. Yeah, my bigger question. Go ahead, Carla. Yeah, no, it's still a gray area. We saw it in the Nate Chastain case. They didn't go at it as a traditional insider trading, but they included insider trading language in the indictment, but instead chose to go the easier road, which is money laundering and wire fraud, because then they don't have to make the heavy lift of trying to convince a jury that these are securities or commodities. Yeah, I guess my question then is the next step to that, which is, let's say it's Drake, for example, and he owns Solana, right? And he just is passionate about Solana and just tweets about it with no interest. That's obviously not insider

training. He doesn't have information that's not public, but he can move the price in theory and sell, right? So there's no insider information. There's nobody paying you as an influencer celebrity, but the price moves because you tweet something and you do have a personal financial interest in that asset i don't think there's anything wrong with that i mean haven't we seen hedge fund managers talk their book since the beginning of time if i speculate where the line is here i'm definitely curious to get your view on this as well i think there are two things where you can get into trouble i think just talking about the price of something you own is not inherently problematic. I think the two areas you can run

into trouble are one, if you have some piece of information that really could turn things into insider trading. I don't think that's the case with Drake and Bitcoin. But let's say Elon Musk that knows that Tesla is about to integrate Doge in some big way, and then takes a Doge position ahead of that, right? He is insider information about Tesla that I think could make his trading in Doge, even if Doge is legally a commodity, which I think it is, it could be insider trading based on that Tesla information he has. I think the other area you can get into trouble here is with market manipulation, right? If you are making statements that you know are going to move

a public regulated market, that can independently be a crime. And, you know, it's hard for me to imagine that that could happen with Bitcoin, given how big and how public it is. But with smaller assets, I think that's a much greater risk. Yeah, it's such a challenge then for anyone with a big platform, right? Because that, I mean, everything you just said applies to Elon Musk talking about Doge, right? He knows if he tweets about any financial asset, including Tesla stock, that's going to go up or down, probably. And celebrities are low-hanging fruit because it doesn't take much to bring a lawsuit. And we've seen the number of class actions that have been handed down. They have a big platform, and they're being closely scrutinized. And I think I have to

agree with Zach. It will also depend on several factors, including the amount of market maker you can be. If you're holding a huge bag of Solana and you're out there pumping and moving and influencing, I'm not saying that that's a meritorious lawsuit, but that certainly gives you exposure because it doesn't take much, but a piece of paper and a filing fee to bring a lawsuit. Yeah. I hate how alienating this is for people with large platforms who might actually want to be involved in this space, like Drake, even organically. They have to consider the massive downside of just talking about something they may be passionate about. But at least, Zach, as you said, I think Bitcoin is safe.

So they don't have to worry about that if they talk about Bitcoin, clearly. Listen, I mean, Michael Saylor has a massive incentive for the price of Bitcoin to go up. And it's all he talks about every single day. And everybody knows his financial involvement and nobody's concerned on that front. Right. So I think that that clarifies that. I just realized, guys, we're up against time here. I want to thank all of our guests. It was a great conversation today. Definitely going to be tracking the Dancun upgrade and see what happens there. I highly encourage you, as always, to follow all

of our guests, follow Crypto Town Hall, and to tune in every morning at 10, 15am Eastern Standard Time. We've been having like, with the time changes and with crazy lives, it's been kind of one of the three hosts each day, but very soon, we will all be back hosting together. So guys, thank you so much. I'm going to go ahead and wrap and we'll see you tomorrow. 10 15 AM Eastern standard time. Peace guys.