The Wolf Of All Streets - Can The Ethereum Merge Spark A New Bull Market? Raoul Pal, Anthony Scaramucci and Mark Yusko

Episode Date: August 18, 2022

Three of the brightest minds in crypto and investing, Raoul Pal, Anthony Scaramucci and Mark Yusko, joined Scott Melker to discuss the inevitable bullish future of crypto. They discussed both markets and adoption of the technology, making the case that crypto will eat the world. JOIN THE FREE WOLF DEN NEWSLETTER https://www.getrevue.co/profile/TheWolfDen Follow Scott Melker: Twitter: https://twitter.com/scottmelker Facebook: https://www.facebook.com/wolfofallstreets Web: https://www.thewolfofallstreets.io Spotify: https://spoti.fi/30N5FDe Apple podcast: https://apple.co/3FASB2c

As we all know, crypto has suffered a more aggressive bear market than, of course, legacy markets, stocks, and elsewhere, largely because of the contagion from Luna to Three Arrows Capital to Celsius and Voyager down to your Uber driver mom and, of course, well, me. So is this contagion over or will it continue? We do have some bullish narratives coming, like the Ethereum merge that i think everyone is watching to potentially spark a new bull run well i have three very intelligent guests much smarter than myself here to discuss these topics and obviously a lot more you know these conversations are very free form and usually take a life of their own i have raul paul anthony scaramucci and mark yusko i think it's fair to say you guys do not want to miss this one let's go let's go.

What is up, everybody? I'm Scott Melker, also known as the Wolf of All Streets. Now, as I mentioned before, seems that we've had sort of a market recovery happening now that the contagion seems to have come to an end. But a lot of people have different opinions as to whether that is actually the case or whether there are some latent stories still yet to be revealed that there could be other institutions or people that were exposed that we don't know about? Or is it over? And are we on our way back up? As I said before, I have some amazing guests here to discuss these things. I've got Mark Yusko, Raoul Paul, and Anthony Scaramucci will be here momentarily. He's having some trouble connecting. If you have three guests, you know that one of them is not going to be able to connect, right? I mean, that's somewhat inevitable. I think everyone has ever done a Zoom call. But the first topic I want to talk about, the most important, obviously, is Mark, I want to know what socks you're wearing. Well, all right. I'll do the sock reveal.

It's always something. I've got him on the chair. I got the Bitcoin Citadel today. Raul, you and I need to step up, man. Yeah, sorry. I live in the Cape Island. I'm just wearing Havaianas. Literally not wearing shoes myself. Tomorrow, I will have on the Bitcoin Bowl.

Tomorrow is the reaffirmation of my declaration from four weeks ago that crypto winter is over, that we are definitely in crypto spring. That doesn't mean crypto summer, but yeah, things are looking good. Okay, so I think that's a clear indication, speaking of what I mentioned before, that you believe that sort of this contagion has washed out and largely the negatives from that are behind us? Look, I think the excessive leverage, stupid leverage, let's just call spade a spade. There was stupid amount of leverage in the system. Michael Burry pointed this out February a year ago. So a long time ago, Burry said, this is all just leverage. Y'all are stupid. And he made a bunch of money on the first plunge from 70 down to 30. He got wrecked a little bit on the recovery back to 70. My guess is he made a bunch of money from November to now. And so, you know, there was so much stupidity.

I tell the story. I shouldn't give up my brother, but, you know, they stole my Bitcoin. Like, what are you talking about? It's like, well, I was a BitMEX. I'm like, stop. You levered up 50 times and you got a margin call and you couldn't hit it. And they seized your Bitcoin. She says, well, that's not what happened. They stole my

Bitcoin. Like, no, you're an idiot. And you lost your Bitcoin. Now, someone did point out to me that there are firms and I won't name names. There are firms. That's their business model. They lend people too much money with the promise of high returns in order to seize their Bitcoin. Like, oh shit, that could be the case. So anyway, I think most of that's been flushed out. Three arrows, 18 billion on 3 billion in capital flushed out. I think there's probably a few others. But look, we are in an accumulation cycle right now. You can see it in the charts, higher highs, higher lows. The one thing that has me a little nervous though, Scott and Raul, I'd love your thoughts on this. We had the descending triangle,

horrible pattern in April, May. I tweeted about this, got a lot of grief saying, you know, the longer we stay- We talked about it at consensus. It happened like that day. Yeah. Yeah. It was literally like the next day. And people were like, oh, okay. And now I feel like we're in an ascending triangle, but the 24,000 top, I don't know. It doesn't, that looks distributive to me. And I don't know if you've looked at that at all, Raoul. Yeah.

I mean, from my perspective is the, just to go back on the broader topic and I'll come into the charts and stuff is the, I think the macro was the big thing that actually caught most of us by surprise. Not that the macro caught us by surprise, but the impact it has on crypto. You know, firstly, when you have negative real wages, people have less money to dollar cost average. It's still a retail investment market.

And so then the other thing is central bank liquidity being withdrawn. And, you know, if you look at the year on year chart of M2 against Bitcoin, they're basically the same thing. So it tells you that as money's coming out of the system, there's less money around. So as you and I know, Mark, from macro from all these years, is that's when you figure out who's swimming without any shorts on is that moment when there's no liquidity, somebody can't pay for the liquidity that they've been borrowing, right? So that's age old. It happened in crypto this time more than it did in traditional markets. Fine.

So that I think was the setup. So inflation plus liquidity. So where are we now? We're in a situation where inflation is most likely peaked. From my work, I think inflation comes down very fast. So that fear narrative is gone. And that was holding back crypto. And so you take that away, and the beach ball can start rising out of the water. Then on the other side is liquidity. If we start looking at what the bond market is telling us, it's starting to tell us that the Fed are going to pivot at some point. Now, the market's still debating this massively when it is and how. I'm in the camp that it happens faster than people expect and more aggressively, because I think the recession is coming harder. So therefore, future liquidity is coming up. We're already seeing liquidity coming out of China, which has been a lead in this whole cycle.

So therefore, the macro structure looks good. And with the technicals, I had demarked signals, everything was in that kind of June low period. So it kind of really stacked up for me. And I kind of went, you know, just trying to find any penny I had to put it back into the market. I hadn't taken any out, but it was just putting fresh capital in because you want to get in at those low levels. So now we're going into this area of congestion, as you say, Mark, which is whether it's the ETH kind of 2000 to 2300 level, or whether Bitcoin, the 24,000 level. And we need to clear that.

Bitcoin's been sluggish, but that's okay. It doesn't have to catapult off the low. ETH's obviously got the narrative behind it. So I look at how the market is structured, the price charts. I think there's a broader downward sloping wedge that comes in at 23,000. ETH, 2300 ETH. I'm mainly focused on ETH. 2300 ETH. I think we go and kiss that line. We haven't had three touches of the line yet. So normally it pulls back into the range and then goes. So to me,

it's kind of like as Arthur Hayes wrote is I think everybody's underweight, the merge still people will get into the merge or post merge. We'll get this spike. We probably get a pullback. A lot of people will say, see, it's going back to the low. My guess is it correct sideways does something or back into the range for a bit, and then we explode

higher. So I'm very bullish right now. Short term, we're getting close to the oversold, overbought. But I think we've just had a correction. My guess is we go again. What's fascinating is to see the forwards markets and the futures markets is everybody's hedging ETH merge risk. So they're buying ETH, selling the futures. Now, somebody's going to have to lift that hedge off at some point. Now, it depends. And so I find that setup really interesting. And I know the crypto hedge funds are all underweight still because they got beaten up so badly. And so they've been buying calls as the way of having something on for the merger, then get beaten up by the investors.

So it's like when you see that kind of setup, the path of pain is still higher. Yeah. Although I do worry about the, you know, buy the rumor, sell the news risk. For sure. I think everyone believes, and I mean everyone, believes that the merge is good and EI 15, 15, 15, 15, whatever, whatever the number is, I can't remember, is all good. You know, I can make some cases on the other side. And I think when everyone's on one side of the boat, to your point, they're all increasing long. Now, some are shorting that level, but I don't know. I'm not there yet. So I have refrained from backing up the truck in ETH. I think the move from 900 to 2000 was kind of the move for now.

And I think we're going to have to settle before we go higher. I know there are a lot of people, oh, 10,000 by the end of the year. Yeah, no, I'm- That's aggressive. I'm of a similar camp. I do think it goes a bit higher

to the 2300 level, 2200 level. And then I expect a pullback, whether that's pre-merge, post-merge. I don't know. I don't really care, to be honest. It's kind of like, you know, what are we setting up here? We're setting up something very interesting, which is a yielding asset that can be the benchmark rate for all of Web3. So I kind of think over time, it's going to bring in a lot of institutional interest.

And if you're bullish on Ethereum long term, the opportunity to buy it under $1,000 was probably the opportunity. I don't know that we're going to get back there again, right? I mean, you talk about Bitcoin, $24,000, $23,,000, 25,000, they don't seem like meaningful numbers, but that's 50% off the lows. It's a pretty big bounce. It's not insignificant. And I think people are treating it like we're still at the bottom of the market. Yeah. That's a really, really important point. The sentiment is still really, really pretty crappy. And that's why it's spring, right? Spring is not parabolic summer. Spring is mushy, right? The ground's mushy and it's windy and it's volatile and in like a lion, out like a lamb. I mean, it's not fun per se. Although if you had the three Cs, conviction, courage, and cash,

you need all three. In June, you could have bought Bitcoin at, you couldn't have bought at 17.5. That was a wick for like four seconds. But you could have bought, you know, under 20, uh, plentifully, and you could have bought Ethereum under a thousand plentifully, but, but you needed all three. Some people had conviction. Most didn't. Most people lack courage, but, but some, some had it, but most people just were out of cash, right? That was the hardest thing. I mean, I have a good buddy who, I shouldn't say good buddy. I have a friend, a colleague. You know, I'm prone to hyperbole, so everybody's my good friend.

Although I'm going to stop hanging out with y'all because you're looking so good, so tan. And I am just, man, I was feeling pretty good until I got on with you guys. I need new lighting or something. But the thing is, I had this friend. He's like, you know, when the Bitcoin miners were here, I'm buying. Then when they went to half of that, he's like, I'm all in. And then they went to half of that. And he's like, I'm all in again. How do you go all in again? If you're in again. How do you go all in again?

If you're all in, how do you go all in again? I mean, I guess you could borrow money. But then they went half of that again. And everybody's like, you know, what the hell, dude? What do you do now? And, you know, clearly they have troughed. And, you know, again, Bitcoin, Ethereum, those are child's play compared to Mera or some of those things. I mean, they're threefold, maybe even coming up on fourfold off the bottom. Again, if you had the courage, which most people didn't because it was going straight down,

down 90 plus percent, but people didn't have the cash. So it's a really interesting time. And what we need is what we've always needed, new entrants, more adoption. Ralph sends out the chart all the time. I saw another update from someone else of the internet S-curve and where we are. And it's 1998, 1999, somewhere in there. And we are going to inflect and we're going to get the next billion. Just let that number sit for a second. Billion people actually get a wallet, actually watch your show, actually do some buying. And that's in the future. You know, right now it's a hundred million of us kind of close friends all talking to each other, preaching to the choir. For sure. What needs to happen is, you know, the other people need to realize, yeah, this is more than just a speculative playground for day traders, because it is. It is the future of finance.

It is the future of payment rails. It is the future of money, full stop. But which one and how and all that stuff, that's all yet to be determined. But biggest wealth creation opportunity, I'm going to see in my lifetime. And I plan to be around a long time because I still got an 11-year old, but it's still, it's big, big, big, big. That brings up an interesting point. I mean, you throw out the number 100 million. I don't know if it's accurate, but it's probably close.

I would argue that probably 95 to 98% of those, whether they convince themselves otherwise or not, are simply here because they think a number is going to go up and they're going to make money, right? Which leaves us with a few million people with strong conviction who probably deeply believe in this asset class. And now we have, which is cyclical, but obviously just this mainstream pounding of all the scams and exploits and 3AC and all these things in the midst of a bear market. How do we then reach those next

levels of adoption and true believers, right? If you believe it's going to be a... Go ahead, Raoul. I think, forget this narrative of true believers versus investors. The big breakthrough of what crypto does is the incentive-based program of you can participate in the network and make money and still believe in it, right? So it doesn't matter. You don't have to be that Bitcoin libertarian who wants to fight for total privacy and total freedom. It's not fucking relevant. It is to them and that's their fight. That's fine. Right. Everybody has a different reason. But what I'm seeing is massive corporate adoption. I don't think anybody realizes Ticketmaster have distributed 10 million NFTs. All of tickets are going on to Web3. Everything.

So if we want to talk about how to get to the next 100 million, it'll happen at paces we don't yet understand. There are many of these Web3 projects of corporates that we don't even know about that have put millions of people into this economy. Once you're in, you've got the wallet. Once you're in, you start thinking, OK, what else is this? What can I do? And it comes. You see, money and making money is not a use case for everybody.

It's a use case for people who want to invest and want to make money out of it. But the enabling of blockchain technology at scale is something we won't even notice. I mean, I've seen there's some amazing wallets like VATM who don't even have, you don't even know what blockchain your tokens are on. It doesn't matter. Right? So you don't do this, you know, long string, all of this, you drag and drop. And it can be Solana, it could be ETH, it could be anything. And it works. It's like, and then it won't become that because then I go to a concert, I get a ticket, my ticket goes into my wallet, that becomes a memento, it may give me unlock to other access to something else. So there's so much coming. So

the next billion people are not going to be buying Bitcoin. It just has to be invisible, as we all talked about. I mean, my first computer, which was a CPM-based computer, way better than DOS. DOS and Windows suck in comparison, but the guy was stupid. He wouldn't sign the NDA with IBM and IBM's like, hey, we're IBM. We, we don't do NDAs. So they went with DOS, but I actually had to write little lines to format my papers in college, right? I had to code. No one's going to do that. Okay. So it had to be invisible. You had to be able to point and click and drag and drop and all things. And I don't want to know how this works. I don't want to know how I talk into a metal and glass box and my voice

comes out in real time to my wife's ear or how we're doing this, right? In high definition. I mean, Scott, you look so good. It's like you're in 3D. I mean, your camera is just unbelievable. How is that happening in real time? I don't care. It's invisible to me. And so the web browser made the internet available to everybody. Mark Andreessen is a genius. That's why he's got more money than God. Amazing. Okay. Then this made ubiquity, right? It made us always connected. And what's funny is when this got released in 2007, Apple stock went down 40% in two weeks because people were like, people will never pay $500 for a cell phone. Yeah, they'll pay $1,500 for a supercomputer that you hold in your hand. But now it's the wallet. And I don't know which one. So I'm investing in as many as I can. And I don't really want to carry another device. Like I love Ledger. They have 15% of all crypto on their devices. But I don't want to carry a Nano S or whatever with me.

I want here. But iOS has risked it. I just learned this the other day. There's this thing called an enclave that iOS could open up and you could actually make it secure. So you could hold digital assets without risk of crossing the air gap or something. Again, technology that I don't really understand, but iOS doesn't want to do it. Samsung has, that's why they still have wallets there. Or someone's going to go the other way. They're going to start with the wallet and they're going to make all the phone functionality on top of that. I think that's actually the winner. And maybe the Solana phone is the thing. I don't know. But we've invested in a bunch of other wallets because the wallet, and we probably won't even call it a phone, we'll call it a wallet. And it'll look like this and it'll do all the things that we

do, except talk. We don't talk on these, right? We actually text and ignore each other. But that's coming. And when it's invisible, when I don't care what blockchain, when I don't care what my seed phrase is, when I don't care where my keys are, when it's just invisible, that's when gazillions of people. And that's why people fought so hard against Libra slash DM and the Facebook project. And that's why David Marcus had to go do his other thing, because they had the gateway. They had three billion people. They could have airdropped and done it the right way. The biggest problem right now with crypto is it looks like the traditional world. All the wealth and the ownership is a small number of people. That needs to change. it needs to be

pushed down and that's why the thing that i get so pissed off about is all these people cheering for celsius going bankrupt and blockfi going under and getting bought by ftx you're fucking out of your minds okay not your keys not your coins idiocy We want digital assets to be used as collateral. We want them to be borrowed against. We want them to create the foundations of a new financial system. If you want to put it on a hard drive and bury it in your damn backyard, you got that. It's called gold. And gold is better because it doesn't get corrupted by water and all that other stuff that'll gum up. Anyone have a floppy disk that has stuff on it that you can't stuff into your Mac because it doesn't work? That could happen with all the stuff stored on these little storage devices.

Okay. That's the one advantage physical gold has. I know what a bar of gold looks like, and I know what I can do with it. And so all of this goes to, if you want this to be a big deal, which we all do, I think, stop the tribalism, stop beating up on the people who are innovating, stop saying CeFi is a bad thing. We're not all going to DeFi right away. Eventually we will. And eventually we will all use this wallet for everything, but not yet. So anyway, I rant. That was a good rant, Mark. I agree. Yeah, that was good. You talk about the tribalism, which I think always has existed here, but I've noticed, of course, it's always in the depths of the bear

market. But now even within the tribes, there's sort of this separation and anger. Certainly with Bitcoin maximalism, I think we've all been attacked by Bitcoin maximalists at some point. It's kind of our shared thing here. Now there's like the maxis versus the more toxic maxis and the you're not maxi enough. And I see these guys arguing amongst themselves. Scott, I go, I like to Twitter space surf and so i'll go into a maxi

space and like get out of here you shit corner i'm like dude i own more bitcoin than you so shut up okay and let's yeah but you can only own you can own five dollars worth of bitcoin and nothing else and that makes you a better maxi yeah and you owning yeah but then i'll go into an ethereum site or a solana site and i'll get out of here, you Bitcoin maxi. I'm like, again, I own more Solana than you. So stop with the tribalism and let's talk and let's have dialogue and debate in search of truth, which is what all of this is supposed to be. I think, Mark, the point that Scott raised earlier is there are a bunch of people who don't care about adoption. They want adoption on their terms. Now, having been around for a while, things don't happen on your terms. You can't dictate terms. However hard you try, you can't. You accept the terms of this

distributed network of millions of people who are using cryptocurrency. That will be where it goes. That's consensus. Consensus is not you must follow my rules. Yes. And if not, you're polluting this because all you're actually doing is driving people away. It's, you know, the more fundamental side of religion pushes more people away than the more moderate side of religion which is more accepting it's it's it's so obvious and always in psychology the thing you fear the most is the thing you manifest yeah and so if you fear that other people will maybe it's like the marshmallow

man right just don't let it into your mind because that's coming. But it's true. So if you fear that other parts of Web3 could overtake Bitcoin and then you start fighting it, saying you can't do that, you will only contribute. Of course. And what I find so interesting,

we can have a world where Bitcoin becomes a global reserve currency, sure. But that doesn't mean that I need to try to live in it now. And that's the problem. They're acting like it's already happened. They act like it's already happened and we should all have adapted and that everyone on the planet should be self-custodying because the dollar's dead. It's just not.

It's not. And also, money is not the only thing that Web3 solves here. There's a gazillion things of which the Bitcoin blockchain in its current state does not solve. And that's okay. These are different things. And the point there, and I unfortunately do have to run, guys. I'm going to bring Anthony on right in a minute. It's possible that we have a single chain world. Possible, right? It's possible that Bitcoin's the base, Lightning sits on top, and Layer 3's, Layer 4's. Possible. It does not exist yet. Full stop. People are working on it. Maybe it happens. There's also

a chance we have a multi-chain world. I don't know how many chains, probably not gazillions. Remember, we had 80, 8-0 internet protocols 35, 40 years ago. Today, we have five that matter. So we will find that path. And it is the $64 trillion plus dollar question. But it doesn't have to happen now. It hasn't happened now. And this, to Scott's point, the idea that you must live your life as if

this has happened, lunacy. But look, new is always adopted at the fringe. I've made my living hanging out with the bad guys at the fringe. And then it moves its way into the center and you know you want to get elected go out to the extremes of whatever side if you want to govern move to the middle yeah you want to get someone to follow you be extreme you want them to stay with you come to the middle i think anthony probably would have thoughts on something like that you know all right experience with what you just described. I've got a lot to say. Mooch is in.

I am out. Now you've got three good-looking guys. The pasty white guy is leaving. Thank you, Mark. We appreciate it. I'm going to go get a tan. I'm going to come back when I'm tan. It's never going to gonna happen you don't tan

yeah yeah yeah you can spray you can spray all right see y'all you guys see that i can see it yeah yeah okay that's me sinking on the ss mooch you see that role i had that much bitcoin okay but that that was the new york post at the low Bitcoin's up 40% from there. I'm hoping and praying they write another article, another mean-spirited article, so that we can get Bitcoin up through 30,000 again. But my point is, if you're going to do this for a living, you have to be prepared for this level of volatility.

I mean, I've been storing on my Twitter feed, in my bookmarks, all of these traditional media it's a scam it's a ponzi all of that stuff because it's just fascinating to see those kind of articles coming out the kind of i told you so at the lows and then obviously that's the signal but it's i can't still staggers me how much pushback there is from traditionalists it's like but yet the biggest asset manager in the world has teamed up with aladdin and has said that they now are going to have a private trust i guess that's the grayscale trust without a discount or premium and they're going to they're going to they're going to offer that out to their

clients so you guys tell me i I mean, I don't know. I'm being ridiculed for being early. In the meantime, you guys were there a lot earlier than me. So, I mean, you've been obviously ridiculed for a longer period of time. We just get used to being ridiculed. I haven't been ridiculed since the day I was born. I'm actually okay with it, Raul, but the point I'm making is it's very damaging to clients because if the clients just relax, they're going to make a monumental amount of wealth as a result of being early on something that's going to transform the entire society. But all we have to do is just get people to relax. It's really hard. Particularly the institutional style clients

and the RAs and the people you deal with and I deal with on the asset management side is they're always looking over their shoulder because somebody's always saying you're being an idiot. Because financial markets are all a history of all of us being an idiot and making wrong decisions.

And they're so, they are scared of it. They're really scared of it. It's very hard to get them to have enough conviction. But when they do, they stick around. But they, you know, you can see it, they get very wavery. But I explain to people all the time is like, we've already said, it's 100 vol asset class, it will have 75% drawdowns. And those are opportunities. Every time it does, it's a life-changing risk reward. So even if now, I mean, I think we all think the low is in, but let's assume it's not. Let's say there's another 50% downside from here. Well, the upside when you get to these kind of levels after the sell-off is about 10 to 20x so 50 basis points downside

10 to 28 upside is like you know mooch we've been in the business for a long time you never get these opportunities in your lifetime you might get one if you were lucky in some vc deal but in an entire market that goes up 20x, and it does it periodically in this exponential trend, we never get this. And yet, we just did it. We just did it. That's what I don't understand is, of course, the media comes in and the pundits and everybody starts criticizing it's a scam. March 2020, everything collapsed. Bitcoin went under 4,000 and went up 17x while the stock market did a 2x. This don't need, you're not, this isn't even conjecture. You can literally say this happened two years ago.

Yeah. And it's still up 5x from that period. Yeah. Yeah. Well, I mean, so look, I don't know. I'm not, this is, you guys are a lot cheaper than my therapist. So I appreciate you looking into the podcast. I was literally tapping on the podcast for like a half hour trying to get in.

But my point is I'm going to stay the podcast. I was literally tapping on the podcast for like a half hour trying to get in. My point is I'm going to stay the course. I'm going to continue to educate clients. I'm going to continue to explain to people that if you can de-layer a society and you can take out middlemen of society and we can go peer to peer with our transactions and we can create a currency or a ledger, let's call that's what a currency should be, that's not corruptible by policymakers or politicians, if we can do that, then market forces being what they are will gravitate to that because it'll be cheaper and it'll be more stable than the system that we're currently running. So, so again, maybe it won't fully adopt guys and maybe it becomes a store of value, but if it does fully adopt, like some of these guys think, I mean, this is a monumental time

to be involved with this stuff. And did you feel beaten up over the summer from clients and media and all of that? How did you how did you deal with the psychological part of having to deal with the crypto winter? It's a lot easier to work for Donald Trump. I mean, I got I got fired from the White House five years ago. They shot me out of a cannon and rolled me into Pennsylvania Avenue. Right. Then they skinned me alive and then salted me with margarita salt. So very well prepared. You know what I mean? I'm not on I'm not on every late night comedy show. I'm not being impersonated on Saturday Night Live because my Bitcoin exposure is down.

You know what I mean? So I am built for this shit. You know, are you allowed to say shit on your podcast? Yeah, shit, shit, shit. I am built for it. I have no problem with it but yes i'm getting lit up by the media i'm getting lit up by clients i've got you know i'm probably i can't mention the name of the wire house but i have i have one wire house that put a sell on my fund in april of 2020 the fund went up 61 they then put a buy on the fund. Now, because of my Bitcoin exposure, they put a sell on the fund. And of course, the moment they put the sell on the fund,

the fund is up 20% from the moment they put the sell on the fund. Guys, what are you doing? This is a long-term fund that has liquidity characteristics that are geared towards long term investors. What are you doing? I mean, you know, I mean, so I'm sitting here. I have to get on the phone with the investors and calm down the investors because we've got imbeciles in these wire houses, not mentioning the name of the imbecilic wire house, but that are doing this. What are you guys doing? OK, I mean, that's not the way you invest. I thought you guys were all disciples of Warren Buffett.

You're supposed to buy the shit and sit on it, you know. And Raul, you know this. Scott probably knows this. The best performing accounts at Charles Schwab are the dead people. I know people. OK, because they're dead. Then I look at the account and, you know, when you're dead, you don't have that much emotion. I don't think when you're looking at your statement. OK. Yeah. So then why are people

viewing this asset class differently when everybody knows that the simple approach to making money over time is to just simply buy something and wait. Because they're not used to volatility of this scale, right? But volatility gives the reward, right? So because it's a 70 vol asset, gives these 20, 50, 100 Xs, depending what time period you're looking at. And people just are not set up for that because they are mean reversionists. They think the world is cyclical and everything reverts back to where it was. So therefore, every boom has a bust and every bust brings it back to where it started. But that's not what happens here. It's in an exponential trend. So every bust is significantly higher. I mean, Bitcoin 4000, Bitcoin 20000. OK, and that's low to low. I mean, that's extraordinary. But people don't see that

they're not used to it. They don't know how to deal with it. So people are having to low. I mean, that's extraordinary. But people don't see that. They're not used to it. They don't know how to deal with it. So people are having to learn. I mean, all of us did. I mean, I was shit at doing this because I never realized how in an exponential trend, buying and holding and adding into the big sell-offs is better. I went back and looked at all the times I traded Bitcoin from 2013 when I first got in at 200. I rode it up. It went up to 2,000. So it went up 5x in

two months. It went all the way back down 85%. I just held it because I wanted to treat it like an option. I wanted to see. And I had a 10-year view. And I said, listen, it's probably going to 100,000. Worst case, a million best case over the next 10 to 20 years. So I held it. It went back 85%. It rallied all the way back up. And I got out during the four king wars in 2017.

And I've made 10 times my money and thought I was a genius. It went up another 10x and then came back down again. So it was fine. I went back. And then I re-bought in 2020 in that sell-off. I went back and did the maths on my much smaller position that I started with versus the much bigger when I really went in irresponsibly long in 2020. If I'd have just held my original stake, I'd have made five times as much money by not. And I traded it well. I made money every time. And if I'd have just held it, I'd have made 5x. If I'd have just doubled, just keep adding my original stake every time it sold off in the big cycles and got down to that five-year moving average, I'd have made 25x. I'm like,

Raoul, you're a fucking idiot just tell as old as time it's like beauty and the beast right i mean that that i mean you've just described every basically a tempted trading versus investing for 99 people not bad at trading no you actually made good trades you made money i mean you you were successful trading that and i still it was suboptimal. And that's the point here. We have to learn a different skill set. The skill set is own it and buy into the sell-offs.

And that's what tech investors managed to figure out a long time ago. Silicon Valley figured this out much before us macro bozos did. Well, I will say this, that I and I watched this happen in the year 2000 in March of 2000, when the Nasdaq cracked and the tech bubble evaporated or was punctured. I have a generation of my friends, contemporaries of mine that said they swore off technology. They swore off Amazon, swore off Google. I'll never touch any of that again. And yet they missed a generation, 22 years of the best asset class in American history. So I think we're there again. And I don't want a generation of investors who have been burnt by Bitcoin going from 69 to 20 or 17,000 or the Celsius situation or Voyager or the Terra Luna situation to then swear off the entire asset class.

Raul, it would be like long term capital management collapsed in 1998. And now we're done with structured credit and fixed income and distressed debt. You can't you can't do that. And so I guess the real question is the rise in application. While we're talking about the markets and we're talking about how to handle the emotional volatility of your portfolio going up and down, I'm watching exponential growth in applications um whether it's the ethereum merge the lightning network uh the use of the lightning network on the bitcoin platform uh all going up exponentially so even though the volatility has pushed prices down usability is going through the roof right now and that's usually a very good fundamental sign.

Yeah, totally agree. Yeah, I mean, you were touching on that sort of conceptually earlier. It still feels like we're at the Commodore 64 level of personal computing when you look at the UX and UI and how difficult it is to use all of these things, which is a good thing. And that's always the best time to invest, right? Yeah, it's a good thing. If you can make the case for the big picture future and most people can't see it, that is the single best opportunity you will ever be given. So, you know, the moment the UX is solved

and everything's right. Too late. It's too late. So let me just give an example of what you guys just said about Commodore 64. Okay, let's say, well, first of all, we couldn't be doing this in 1998 because we wouldn't have this George Jetson phone conversation. But let's say it's 1998. I've got my corded mouse and my fat box computer, and I'm dialing up on my modem, and you can hear the whirring and burring of my modem. And now it's taking 35 seconds for my

landing page to arrive on my screen. And of course it's AOL and it says, you've got mail. And there I am and I'm going to buy a book from the internet bookseller known as Amazon. Right now, Raul comes to me from the future, from 2022, looking very svelte, Raul, by the way, you're coming in from 2022 and you're standing next to me and you're like, hey, Mooch, you know what's going to happen here? You're going to be on a flat box or a smartphone. Amazon's going to become this colossal enterprise. And oh, by the way, it's taking you 35 seconds to land a page on the internet? Well, someday billions of people at the same time are going to be streaming 4K video over this platform known as the internet. And so when I talk to people about the blockchain, I'm trying to get them to think like that. This is 1998.

This is Commodore 64. And if you can just envision what will happen as these pipes expand and the applications expand and the traditional finance people have no choice but to embrace it, OK, it's going to be unbelievably transformative. And then, oh, by the way, there will be a demand shock for assets like Bitcoin. Yeah, 1995, when I was a freshman in college, I used to try to download pictures of Cindy Crawford and I would have to go like away to two meals and sleep just to watch it go like this.

But it's really incredible to think that that was only 25-ish years ago. Don't be rubbing it in that you were like a freshman in 1995. I mean, when you said that, Raul and I are looking at each other. We want to hit you. We both did the math thinking, fuck, he's younger than us. Yes. I'm 45. I'm not exactly a spring chicken here, right?

But I guess, especially in this industry, but I guess that makes it, we're all boomers. You guys are just the elder boomers at this point. So, Anthony, what you just described, I think, makes perfect sense. A lot of people are focused on Bitcoin, Ethereum. I know, obviously, I mean, it's in your Twitter. Algorand is one of your big investments. You're extremely bullish. I mean, how does somebody not specific to Algorand, but knowing that this future is coming, how does somebody, I guess, invest in an intelligent way to capture the upside from any of these?

How do you choose the winner when there's so many people competing for the same thing? I can't choose the winner, right? So like Mark Yusko, I own some Solana. I own Matic. I own a piece of Algorand. We probably have maybe 120 million tokens, if you will, of Algorand. I used to be able to tell you that I had a $250 million position, but the thing went from $2.40 to $0.36. So you tell me it's about a $40, $50 million position today. So I don't know. But this is like venture capital. So I'm making the assumption that Bitcoin is standardizing. I'm making the assumption that Bitcoin in this space

is the Amazon, if you will, of Web1. And these other things are potentials. Now, Algorand could be Google, meaning going back to that example, we were going on Ask Jeeves, we were going on Lycos, AOL to enter the internet in the late 90s. And then this algorithmic search technology known as Google came in and wiped all of those players out because of its efficiency. Now, I think that about Algorand because of the technology associated with Algorand and the scalability, the fact that the main net is never cracked, the decentralized nature of it. Obviously, it's very secure. If you brought Silvio on, he's an old timer, won the Turing Award. But if you brought Silvio on, he believes that he's solved for the trilemma. OK, so I just finished a book. It'll come out.

It'll be posted up on Amazon. It's called The Genius of Algorand. And I write 110 pages. You know, it's a little longer than a pamphlet and a little shorter than a book. But I'm trying to explain to my clients what Algorand is and why we like it. But I could be wrong. We could be sitting here. Something else comes out, eclipses it.

I don't know. Like Raul, I've been humbled by life and I've been humbled by markets. So I'm not sitting here, you know, pedantically describing things to people. I'm telling you, based on my research and my observation, when I talk to CTOs at Fortune 50 companies, they like Algorand and they look at it and they say, OK, I get this. I see how this could be something that I could recommend to my board where there's other issues. You know, and remember, you know, a lot of these people are carbon centric, right? Algorand is carbon negative in terms of the way they set it up. So anyway, I'm sorry to be so long winded about it, but you can go you can go on Amazon next week. The link to my book, the book will be out probably September 15th. It's called The Genius of Algorand.

And it just explains what Silvio did and the technology that he put in place and also why, despite the, you know, the TVL going up and a lot of transaction, a lot of volume going up, the thing has never crashed. Okay. Because of the way that he set up the protocols. And Raul, I mean, just in general, it feels like you could choose wrong and miss the boat on this entire thing, right? Yeah, that's right. And so you try not to be too cute. So I have a few different tokens.

My main bets are Ethereum and Solana. But like Mooch, I have no idea whether Solana is going to be something or not. I think it probably is because the network adoption seems to be as high as anything else, but the world can change fast. So, you know, outside of that, I have a basket of equally weighted stuff because I assume I'm an idiot and don't know how to choose the right things. So I've got that. And then that's why I set up a fund of hedge funds, because I'd rather give my money to a bunch of people whose job is to go and find what is the next 100x or 1000x than try and do it myself because it's complicated. So yeah, I started an asset management company to do that. And the rest is a couple of concentrated bets and then just a small basket

of stuff. Just keep my eye on it all, see what's moving, see how it works. And what is the five years, the grandest vision? If all of this works out, we come out of this bear market, we start to see, and five years is too short, 10 years, we'll say, what does this all look like? I think we have no idea. So we can just invent things and make it sound cool. We have just no idea. What I do know is if I just extrapolate the network adoption effects, the number of users and where that number of users is going and assume it gets to somewhere between four and five billion in the next 10 years or so, which would be central bank digital currencies enabling it, all ticketing, a whole

bunch of stuff going that way. Well, the market cap of the space goes from whatever it is today, a trillion dollars to $200 trillion. Okay. I mean, we kind of throw out these numbers. People don't realize the world has never seen an accumulation of wealth like that in history. I mean, this would be the shortest period of time of the largest accumulation of wealth ever seen. So even if I'm wrong, let's say I'm a total moron and I'm wrong by 90%. Well, 20 trillion, 1 trillion, I'll still take that bet because it's still the best bet in the world. And that's by me being wrong by 90%. See, first of all, I think Raul is going to be right. And I'm hugging him for saying it.

I'm just saying if it's 10x or if it's 10x, if it goes from a trillion to 20 trillion dollars, this will be one of the greatest investments that have ever been made by anybody. OK, this is the this is the telephone. This is Rockefeller discovering that he can lock up all the oil for a hundred years in North America. Okay. And so to me, I, I want to be a part of it. You know, now somehow you're a hypster, you're this, you're that, you think, okay, whatever, say whatever you want. I'm going to be there. And, you know, unless, you know, the good Lord takes me out or something like that. But if I'm alive and it's 10 years from now, eventually Raul is going to invite me to his palatial estate. OK, I won't disclose where it is, but he's going to invite me down there.

It's going to be a private island. Yes, of course. And I'm going to have a I'm going to have a big, large ice cube with some rum that he's curated. I'm going to sit there with him 10 years from now and say, you remember that podcast we did with Melker 10 years ago? You know, why the hell weren't people listening? Okay. Okay.

But I am looking for the NBC. You see how pushy I am, Scott? You see, I'm, you know. You've got an open invite. I've never seen somebody. I would say, I don't know a hundred times but you know he never says just get a plane and come down here

I've definitely never seen somebody push 10 years in advance even Sean from Algorand is back here he's back and came in in October so you come and see me and Sean and we can go for dinner you're planting some serious seeds 10 years in advance for an invite to someone's house.

We're talking about October. I know. I know. But the long-term one was a 10-year invitation. Just mark it down on your calendar for now. But so everybody, even I think a lot of the skeptics and critics, we don't really see the crypto to zero arguments anymore from anyone rational, right? So I think even the people who are skeptical and are critical believe it'll go up again from anyone rational, right? So I think even the people who are skeptical and are critical believe it'll go up again when markets do, right?

The argument now is like it's correlated to legacy markets, but everyone believes those will go back up, right? So what's really even the worst case scenario here at this point? Regulation's not going to stop it. It might stop it in the United States, but what is our worst case scenario? Never say that question. These are things we hold in our minds and never publicly admit, because when you publicly admit them, we manifest them. Okay, so manifest the second worst case scenario. Yeah, I mean, I don't know. I don't see any gigantic risk. I don't think regulation is a risk because people are voters

and you're bringing a lot of voters online into this. So I think that's a battleground. So I don't see the big existential risk. You know, we've just had a de-risking from leverage. Was that an existential risk? No, it's standard stuff that markets have done many times, like long-term capital. I've lived through all these all. It's just regular stuff. I don't see an issue. Well, I mean, listen, I mean, obviously,

we prepare ourselves for the worst things that can happen. But just remember, if you've got 73 million Americans own cryptocurrency at this point, you have this now decentralized lobbying organization. So these these politicians are marketers and these elections are marketing competition. So if I'm running for office, I turn to my political consultant and say, hey, what's my position on Bitcoin? Because most of these people don't give a shit. They're politically expedient. And the political consultant says, well, you better be for it because your opponent's going to be for it. And you can't be standing at the podium and saying, well, he's for it. There's 73 million people that are behind him and I'm not for it. You see, and that's what's happening. And that's why these bipartisan bills are starting to come together. And that's why guys like Gary Gensler have said, oh, you know, Bitcoin's a commodity. These other ones are securities, but Bitcoin and Ethereum are commodities. They're starting to yield ground because they don't have a choice. And remember, nobody wanted Uber. No politician, no mayor, no community organizer, no bureaucrat. Nobody wanted Uber. No politician, no mayor, no community organizer, no bureaucrat. Nobody wanted Uber. But you know who wanted Uber? The people. The people ever come in contact with i mean i mean that's

what she is she's the stupidest smartest person right she's a professor from harvard and all this other stuff but she is for the underbanks and she hates the big banks but she hates bitcoin i know i don't get it i don't understand there's aggressive should be but but but raul let me tell you why my novigrad's made a billion dollars off it and she doesn't like rich people making money. And so that upsets her. Even though Amazon has lowered costs to poor people, Walmart has lowered costs to poor people. The people that created these businesses are not supposed to make any money, according to Elizabeth Warren. OK, this is the absolute insanity and the stupidity of this type of thinking. OK, we should be creating an aspirational society

with uncapped outcomes. Of course, we need better platforms of opportunity, but we need to. But anyway, so the point I'm making is so Bitcoin helps the unbanked. The president of El Salvador believes that his people will save four hundred million dollars when an expat from the United States sends money back to their mom or dad. They have usually they're unbanked. They walk into Western Union with cash. Western Union takes seven to 10 percent of their money. If you send a thousand dollars to mom, Western Union gets $100, mom gets $900. Actually, the people who rob mom outside the Western Union get $900, I think, historically. Well, you get the point that I'm making, but a wallet-to-wallet transfer,

according to the president of El Salvador, will save them $400 million a year. So when you're talking about monumental cost savings and you're talking about monumental synergies and economic efficiencies, right? One of my old friends, Bill Miller, who says, okay, my approach is I own Bitcoin and Amazon. That's my billion dollar, multiple billion dollar portfolio. Why? Because they're making things better. They're making things economically more efficient. And that usually bodes well in the stock market or the cryptocurrency markets. Yeah, I absolutely love that. The smartest, dumbest person in the world, I think, is the greatest description I've ever heard. I mean, that's what she is, though. The smartest, dumbest person in the world, I think, is the greatest description I've ever heard.

I mean, that's what she is, though. I mean, come on. That's enough. No, you can't say she's dumb. She just either is completely missing the point somehow, which kind of makes her dumb, or it's a political move and she's just saying what she thinks she needs to say to appease her base.

But I guess that's life. And it's now 1030, which means that we are done. Well, thank you for finally letting me in, Mel. I tried. Every time I looked down, you had a blank screen with the spinning pinwheel. Talking about Commodore 64. I'm going to tell the border police here not to let you in, right? I tried to keep you out of this podcast.

Now at least he's admitting that he's not letting me have that rum with him. It's unbelievable, right? When he knows you're on the way out the door, you can scream an expletive and throw your grenade he was loving crypto bahamas when bitcoin was 41 000 though he's very happy in crypto bahamas okay and by the way since we haven't ended the podcast yet april 22nd to the 24th guys crypto bahamas i'm gonna be there i just spent 10 days there that's where i got this uh you good. Sam Bankman-Fried and I, we locked up the entire hotel this time. We bought out the

entire hotel. It's going to be fantastic. It was a great event. I'll see you at Salton a couple of weeks. Yes, please. I'm looking forward to that. That's September 12th to the 14th. All right, guys. Thank you guys very much. Everyone else, I'll be back. I'll be back tomorrow, 9.30 a.m. Eastern Standard Time. Thanks, guys. Thank you guys very much. Everyone else, I'll be back. God bless. I'll be back tomorrow, 9.30 a.m. Eastern Standard Time.

Thanks, guys. Bye. Let's go. Let's go. Let's go. Let's go. Let's go. Let's go. Stow. Stow. Stow. Stow. Stow.

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