The Wolf Of All Streets - Crypto Ripping! Bitcoin $38K Next? W/ Raoul Pal | Crypto Town Hall

Episode Date: October 25, 2023

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Yo. Morning. How are you? Good, man. How are you? Good, man. Good. So there's nothing, no big news today, just the ETF listed, delisted, listed, delisted, listed, delisted, yeah? Yeah, I was going to say, big news if you like the fake and stupid emotional overreaction type, which is what we do here on Twitter. Or X, excuse me. Yeah, I read somewhere, again, just a disclaimer for everyone. I did not go through the news for today yet, but I did read one thing in the agenda that has been listed since August. That's correct.

Here's the gist. Basically, there was quote-unquote huge news that the DCCC had listed IBT-C, the BlackRock ticker, which means that BlackRock is taking a step forward, which means that they're going to start seeding the fund, which means they have to start buying Bitcoin. Then apparently it disappeared. Then apparently so many people went to check that it disappeared, that it crashed the DCCC website. Then when it came back, it was there and it wasn't there. Then apparently ARK was there, but ARK wasn't actually there. That was completely fake news. And then we found out that all of this had just been sitting there since August. Then why didn't the market retrace?

The market doesn't want to retrace. And I don't know if it was even on that news that the market actually went up in the first place. But I mean, I think there's a lot of interest here, a lot of buying, a lot of institutions really starting to take a look. I think this is just that moment when, you know, if you're waiting for that massive dip to 25 or 15 or 10, you might have missed the boat. Yeah, look, my conclusion is crypto is one of the most confusing things I know in my life. Yeah. That was the weirdest 48 hours. It's like you just want those hours back.

Luckily, I went and played golf for the first time in like six months yesterday and turned off my phone for five hours. So that helped me at least not, you know, waste some of my time. You ruined my sleeping pattern by messaging me that night saying, Mario, messaging us in the group, guys, crypto's pumping, crypto's pumping. But I'm with the kids. I can't do a space. I'm like, shit. I'm like, but Mario, you could. Totally. But we do have Raul here. Raul, how are you, sir? Good, my friends. How are you? Good, good. Are you as confused as we are from what happened over the last 48 hours? Well, I think you know by now, I'm not really fussed about the shorter term price.

You know, I've been bullish for a while now. And, you know, we always look for the new story that drives price. But really, you know, price is driven by liquidity. Price is driven by where you are in the macro cycle. And we got to the point where price should be rising. And so, you know, then we just spin around. And as we saw yesterday with that ridiculousness over, it's listed. It's not listed. Nobody cares.

It's kind of that point in the cycle and for me the point of the cycle is you know interest rates keep going up or the bond market has kind of lost control a bit and the crypto market is kind of forward looking and saying well if you carry on doing that well the banks are going to keep collapsing and if that happens you'll have to get more cowbell and more stimulus so it's just kind of positive for crypto markets overall that react very well to that. So, yeah, I mean, for me, you know, I just always step back, look at the log trend of all of this stuff over time, and it just plays out over time. So I'm always very relaxed about this stuff. I think it's very, it's very sincere.

I think, go ahead. I'm ran out here. I think, go ahead. I'm here guys. I'm here. Well, I know you, I know that you, we had a chat on my show. Um,

not so long ago. That's exactly what you said. You just zoom out. The trend is up. Now let's start looking for the new stories to actually feed this frenzy. Exactly. I mean, I mean the new story everybody's anchored on right now.

And again, these are just narratives. market's leaning into, is the ETF. And the ETF itself, how I think about it, my mental framework for it is, it's not start ETF, gazillion dollars go in, we all get rich and buy Lambos. How I think of it is,

this is a trade deal between the crypto economy and the TradFi economy. So once that trade deal is done, it's now down to whether the TradFi economy investors want to then invest in this other economy. And really for that to happen, you need liquidity because nobody's got any cash because everybody's broke. So you need that kind of stuff and you need expected future returns and what that really means is fomo i've seen a whole lot of people comment that we're going to get that tradfire would start off by putting one percent of their investable assets into an asset class and then maybe go up to two

percent like from your experience is it a crypto bros ambitious thing to say that the people are just, that we're going to get up to 1% of their investable assets in the first, say, 12 months? Or is that a realistic assumption? Again, it depends how the market's trading. So if the market's very positive, you know, raas that

that that etf really is for raas the raas will get their clients into the space raas don't like getting their clients into um holding crypto because they don't get any fees on it but this they get fees for assets under management so they will um you know they will promote it if they think the price is rising over over the space I mean it's interesting to have the same conversation from this cycle the previous cycle in the previous cycle all are well the institutions are coming they haven't come you know I spend a lot of time speaking to all these guys and most of the institutions have done the work on it they're trying to figure out where it fits the pension funds are further down the track but

people like texas teachers retirement system they're already you know invested in the space but not in in tokens themselves more in the vc space and some of the hedge fund space um so we are seeing them coming in various ways but what the etf does is bring the hordes of ras financial advisors and those kind of people who don't want to sell out crypto accounts. Yeah, and so, I mean, another question, I guess, is how aggressive do you think the sales force is going to be in actually pushing Bitcoin?

Do you think that, like, Larry Fink on TV saying crypto is a flight to safety, et cetera, do you think that that's, like, you know, is Larry Fink being a marketer or is it genuinely like how it feels? What we do know, if you remember, go back to the bull market in 2021

or maybe even 2020, Rick Reader, who runs their fixed income portfolios and strategic asset allocation stuff, had allocated to Bitcoin back then. And Larry Fink was saying, you know, we saw a record number of hits onto our website. So if his biggest risk taker already has or has had crypto positions, and he can see the marketing opportunity to capture a large share of a new asset class.

I mean, he will go for it. And, you know, whether Larry believes that people need an escape or not, he knows that that meme is real. And it matters to a lot of people. So he's saying, well, here we are. But, you know, in this weird world, nobody's actually using the escape valve. They're using the escape valve of price, but not the escape valve of i need to get my assets out of a system which is you know if you hold it yourself so my guess is he's he he probably sees the system's a bit screwed but his job is to sell this stuff and he he's got a new product that he can raise you know 10 billion

dollars of assets of course he'll he'll go out and tell the people what they want to hear. Okay. And I mean, I've read different versions of where we're at in this bull market. We are a hundred percent up from the bottom. We are still 50% away from the top. You could probably argue that the bottom happened sometime around November last year, and we've been in a 10-month uptrend. How long do you think the cycle lasts?

Well, the work I've done suggests all the cyclicality of everything is all the same thing. It's this macro cycle, this everything code where everybody in the world reset interest rates to zero in 2008 bitcoin was born at the same time the halving plus the business cycle is all exactly the same it's all in sync it's also exactly the same as the presidential cycle they're all the same thing so for that to change something needs to change and i don't see that having happened so therefore we're more likely to see a repeat of this cycle which means 20 end of 2025 is likely to be the peak and then we come up in 26 27 unless something changes now there could be a change on this horizon which could be the interest rates don't rise in the next cycle,

even though inflation will pick up again because inflation is cyclical. And if that is the case, because the Fed do yield curve control, then assets will continue into the next cycle. But that's not a prediction. But 2025 is where it should finish. And we should get more cyclicality in the economy again. Scott, yeah i mean raul we talked about the four-year cycle on on monday raul and i for full transparency recorded an hour on monday which comes out next uh sunday but we talked about the four-year cycle in crypto but you sort of pointed out that it aligned with a number of other four-year cycles yeah well i think it was you and I who actually came across,

holy shit, it's actually the election cycle. We came to that conclusion together. But you were saying, yes, exactly, that we ended on it being the election cycle, but you were first making the point that it was other things as well. Yes, because what happened in 2008, it was a debt jubilee. So the Great Reset happened. And what they did was say nobody has to pay interest on their debt, which was zero interest rate policy. And what happened is every government refinanced.

So these are all the major economies, the EU, the US, UK, China, Japan, everybody kind of refinanced in this three to five year horizon. So did all the corporates. And that three to five year gives you like this. It's about a three and a half year business cycle. And so the ISM, which is the best guide to the kind of GDP growth where it's going, is the same cycle. So everything, because everybody reset debts and rolls their debts at the same time, has the problem. So here we are today.

What we're seeing is bond yields going up. Why? It's going up not because of inflation. Inflation was killed a while ago. What's actually happening is we're having to issue new bonds to pay the interest on the old bonds, but the interest costs have gone up a lot. So you need to issue even more bonds. And that is spooking the market. And this is the exact thing about the everything code I looked at is when I actually look at the growth of the central bank balance sheets, it has basically

been done for two purposes. One is to paper over any cracks in the financial system. That's a direct stimulus from the Federal Reserve into the banks. And we saw that recently, and we may well see it again in the coming month or two as the BKX keeps going down. But the other thing, the actual majority of what the central bank balance sheet is, is the monetization of the interest payments from the last cycle. So if we go back to the last cycle, which was the last crypto bull market, what was going on? That was the pandemic, massive stimulus. All of that now has to be refinanced, trillions of dollars of it, literally trillions of dollars. And the issue with that is rates have gone up to 5%. They were zero at that point. The only way of doing this is sticking it on the Fed balance sheet.

So the Fed needs to orchestrate lower rates to start making it easier to refinance the debt and have an excuse to use the balance sheet. The excuse for me is potentially something, you know, something else breaking in the banking sector that gives them the cover to do it, or inflation undershooting, which is why I think they're in the hire for longer category. But this four year cycle is literally everything, which is why I call it the everything code. It all fits together. It's all of the asset cycles, you know, from technology to crypto to equities to commodities. It's the election cycle. It's the Bitcoin halving cycle. It is the thing. Yeah, when you line it up, it's actually pretty astounding. So I guess let's dig into the weeds more on the actual crypto market and the market with Bitcoin right now. You kind of alluded to the fact, I said the same thing at the beginning. Why did it go up? Because it wants to go up and it's time to go up. And maybe that's time for that. That's a result of that exact cycle

that you just described. But then where do you put in context Bitcoin versus everything else in the market? And in your mind, why are we seeing certain things, very few of them, but truly outperform Bitcoin at this moment? While obviously I think the rest of the market sort of suffers as Bitcoin dominance rises. So I've been a big proponent of the market sort of suffers as Bitcoin dominance rises. So I've been a big proponent of the fact that everything is macro. And people get lost in their own space, whether it's commodity space, credit space, crypto space, equity space. They kind of get lost because they think that those fundamental narratives matter more. They don't. It's the macro. It's this cycle.

But there's another thing that happens within cycles. It's the risk curve. And it happens everywhere in equities. It happens in credit. It happens in currencies. It happens everywhere. So what is that risk curve? So if you think about it in bond market terms, when people start buying bonds, they buy u.s treasuries first when they start to think hey the u.s economy is recovering things look better they go further out the risk curve they buy junk bonds and then they buy emerging market junk bonds and then they do private sector lending it's pretty much the same cycle every time and then it all blows up again because the cycle turns over and rids repeat the same happens in the crypto cycle. So crypto spring is the same as macro spring. Crypto spring is when generally Bitcoin outperforms.

Once we start transitioning into late crypto spring towards crypto summer, which is where I think we are today, that late crypto spring, you tend to see the other larger tokens start outperforming bitcoin now eth has not yet outperformed it's been underperforming as it should have done at this point in the cycle but it's very close to the point where it starts rebounding and starts outperforming bitcoin and i'll give you a narrative why that will happen in a sec. But then also the market starts to look for who is the next anointed one. The next anointed one last time around was Ethereum, if you remember. Ethereum was down 97% from its 2018 high. And then we saw a 47x rally in Ethereum, where it became far and away the kind of dominant ecosystem in this kind of broader Web3 perspective. So the market's searching for that narrative. And that's where

we're starting to see certain tokens come alive, Solana, Chainlink, a few others. And that's, again, the risk curve playing out. People want to take a bit more risk now. They feel like the bottom is in. So therefore, if the bottom is in, I want to start taking risk. So why are we likely to see the bottoming of the ETH Bitcoin cross rate? Well, it's pretty simple to me because humans are generally predictable. So right now, everybody's front running the Bitcoin ETF. ETF's coming out. It's a nice, simple narrative. Everyone piles into Bitcoin. It's macro and crypto spring. It's Bitcoin's time to shine. Great. Now, let's assume in three weeks' time, four weeks' time, the actual announcement of the ETF comes out. What will everybody do? I will bet my life on it. Everybody's going to go, well, the ETH ETF is coming next and we'll see the switch because that's risk-seeking behavior

that happens at that point in the cycle. So for me, it's generally predictable. Obviously, these things aren't perfect. They're not clockwork, stuff like that, but that's generally how the market works. Then what happens as you get into crypto summer, then you get to the full altcoin season. That's when everything goes up. We're seeing already stuff like Pepe going up. But that's when pretty much everything just explodes higher. And, you know, anything with a cheaper price, you know, retail buys it in the hope that it's going to be the new big thing. And that's the full altcoin season.

We're also starting to see the rise of DeFi season. That's very typical early stage, end of spring DeFi season. We're seeing many of those Uniswap, Aave, all of that kind of stuff picking up as well. So, again, that's a traditional narrative. And then I think it transitions into the everything, everywhere, all at one cycle. Because we've got so many of these narratives where many people have built great businesses and applications that will be revealed over the coming two years. So, Raoul, you're saying altcoin season. I hope the mic is okay. Altcoin season will be June, mid-next year.

It's kind of the last leg of the bull run. And then, but when do you think… No, he's saying the last leg of the bull run and then um but when do you think no the last leg of the bull runs 25 by the way not 24 not 25 but the last leg would be like so you go through you know starting with bitcoin then you look at eth and you look at other top coins and then it finally goes through into you know defy season and and uh and outcoin you know projects launching and what's the next big thing it's kind of the last not the last leg but the the last thing to follow bitcoin is that is that fair that's when you're in the full retail driven bull market that's the other thing is the other thing i've not talked about

is nfts nfts are an asset within the eth economy if you look at right now, the NASDAQ and S&P bottomed back in October last year. They've been going up a lot. Certainly the NASDAQ has gone up a lot, but house prices, the price of Rolex watches and other stuff lag. Why? Because the equities lead the economy and the economy is still slow and nobody's got any money, so nobody's buying Rolex watches. In fact, they're selling them. NFTs work in exactly the same way. They're an asset within the digital economy.

So eventually when people have got money, they'll start buying CryptoPunks and start showing them off and, you know, the same as... I don't think so. I don't think they're coming back to punks. But to be honest, I don't think they're coming back to punks.

Mario, finally you can let somebody else do this. Go ahead, Raul. Please teach him something. I've tried. He's a lost cause. I love him, but he can't get into NFTs. He'll be sporting his punk in 2025.

He'll have his punk and he'll be living and breathing NFTs. The only way I get a punk is if one of you gift me a punk. And even if you do, it will live in my wallet for a very short period of time. Do you buy watches, Ran? I have one watch. I don't see the point in getting more than one watch because as much as i really really love fine time pieces unfortunately i can only wear one at a time and i'm a very clumsy person in that i know i can't lock look after

things so i know that i my watch will get stolen and i know that i will leave it lying around somewhere or something like that raul ran ran is not a consumer it's actually one of i think his most impressive quality does that correct ran i, we've talked about this in the past. You're just not the type of person to buy things. You don't reward yourself with something when you go buy. Yeah, I just, I mean, I don't get, like, okay, I don't really like fast cars. That doesn't really do anything for me.

Like, I've got a Jeep. The best thing I like about the Jeep is that I can crash into whatever I want and not even know that I've crashed. You know, it cool so that that works for me i think scott's right i'm not a consumer i don't wear jewelry i don't have many time pieces that it's not me but i also you also live in south africa yes and but i don't but i don't um i mean ralph's right you don't in south africa we've got a very high crime rate you know know, having, there's a thing here called the Rolex gang. And if you wear Rolex, you could lose your wrist or you could lose your watch or you,

you know, they do, they do follow people around and steal their Rolex. So that, that is, that is definitely. But please, but,

but Ryan, keep telling us why living in South Africa is much nicer than living in the US. I think I can't wait for that discussion next time. You want to make this about me? You know, you invite the high profile guest to share his views about crypto, and you make the podcast about me.

You offend my punk, my identity, who I am. Raoul has an ape as a profile picture. You offended him. No, he didn't offend me. Ran couldn't offend me at all, ever. Well, I'm offended then, Raoul. It's just me alone. Raoul, talking about punks and apes,

I want to talk about VC funding, which I keep mentioning and Scott and Ryan always, you know, hit their face and saying, not again. But when do you think VC sentiment will change? Because we see the market do well,

but VC is still very conservative. It'll change this month. I guarantee you when we go back to the stats, I guarantee you when they show the stats for October, the uptick started in October. I'm willing to put any money you want because I can see the stats for October, the uptick started in October.

I'm willing to put any money you want because I can see the projects that we're working with all of a sudden are going out and raising their rounds which I haven't been able

to raise in the last few months. Yeah, I'm starting to see some VCs. The issue is the VCs don't have money. So, we're starting to see

some VCs raising. I know, you know, Dan Tapiera has been out raising for his one rt fund um there's a few people raising but people haven't got a lot of money so they're knocking on the doors of the institutions the institutions are still papering over the cracks over the pe portfolios are asking for more money so money's still tight but i think rand is right

i mean i think people are starting to see through the other side there is some funding coming in from anybody who's got some money but the mass capsule raising hasn't happened yet that really kicks off probably by the summer of 2024 where suddenly you'll see somebody raises another you know billion dollar you know crypto vc fund but it's it's not really happening yet the only space we've seen it is the AI and kind of deep tech space. Raoul, what could change things in your mind? So you've told us about why you think we'll see a bull market by next year, how that bull market could look like. I've got two questions for you. Maybe dig into before asking us what could change your projections. The first question is, what will this bull market look like? Something

me, Scott and Ryan debated heavily. Will we have the same greedy bull market as we've had before? Or now with regulation, we've learned our lesson and things will be quieter. We won't have the same craziness we've seen previously. Oh, people lose their fucking minds as ever. No, I don't think anything changes. It the same liquidity cycle you know you'll be seeing you know tesla up 5x from here crypto up wherever it gets to you know as long as there's liquidity in the system there's risk seeking behavior currently um and that i don't think changes there's obviously a possibility that it's wrong this everything code cycle doesn't repeat um but even then the

adoption of the technology keeps going forwards you know we're seeing some really big breakthroughs happening some big partnerships and we're seeing the financial system moving quite rapidly towards integration of black blockchain technologies across the tech stack within finance so the adoption keeps going up um so that's why it's in an exponential trend over time that gets exacerbated by the business cycle that really gives the big push. So let's assume that Raoul is a total moron, the business cycle doesn't do as I expect. We still get rising prices just from the adoption of the technology. As long as liquidity is not tightening, liquidity tightening significantly,

okay, that's more of a problem. But I don't see how that could possibly be the case, unless there's some random resurgence in inflation. But really, to understand the inflation side, you need to understand what drives inflation. Inflation is driven at the short end by commodity prices and things that move up and down. They're all massively deflationary now, starting to pick up a little bit from the lows. Stuff like copper and stuff has not really gone anywhere, just oil moved a bit. And foodstuffs are still going down. But the real bulk of the inflation stories are actually rents and wages. Those things lag by about 18 months to two years. So they keep

deflating all the way through, which is why central banks tend to cut rates for at least 18 months after a recession. So generally speaking, inflation should continue to go lower. So unless something dramatically changes. Now, that's not an oil price shock, because the oil price shock actually takes consumption out of the market for normal people, because suddenly your gas price has gone up, you spend less. It actually tends to drive economic weakness, and that brings inflation down over time. So yeah, I'm not really sure what the thing is where it goes horribly wrong. But let's assume that maybe not as much liquidity comes in, but in which case, then we'll get a bull market, but less wild. Does that answer your question? Raoul, you talked about the idea of Ethereum sort of being the anointed one in the last cycle. I actually, I tend to agree with you that Ethereum looks like it's bottoming and there's sort of maximum FUD against it at the moment. So I think it's starting to look very good. But people always

ask me what will be the winner of the next cycle. Now, I know that you are bullish on Solana conceptually, and we can talk about FireDancer, or we can save that for later. But there's also the notion that outside of that one narrative, everything being in Ethereum, or maybe everything Solana or whatever it's going to be, we usually see these brand new narratives emerge. I always joke that the winner of the next cycle probably doesn't even exist yet, right? So do you think that there are going to be things that emerge and those are the ones that everybody's talking about

and are huge and do these, you know, 100,000 X price moves and maybe they're not even in the narrative at all yet? Definitely. Or is it gaming? Because I know you love gaming as much as I do. Actually, I'm not a gamer whatsoever, but I get the narrative, and I know it's obviously one of the biggest things on earth.

Scott, yes, there will be many of those. I have no clue what they are. I have zero edge in that game. I'm just not good enough. I'm good at macro and picking the kind of big bets, the main winners, but the smaller bets, the smaller winners, I think you really need to know what you're doing. You know, you know, everybody's wallet is filled with shrapnel of what they thought was going to be the next big thing. And they FOMOed into it. I've got plenty of that shrapnel of shame as i call it uh in my various wallets

my for most people don't even bother just capture the main trend and you will be absolutely fine now if you have that inner raging dgen within you well then just put 90 of your money into your main allocation and give yourself a 10% degen. I can screw this up. It can all go to zero, but I'll have fun doing it. And that's great too. That's how I would handle it. Just feed it in a degen, but not with your whole portfolio.

I hear you when it comes to selecting individual tokens. And I think I agree with you that either you're going to make it a full-time thing or you're not going to do it correctly. But are there certain narratives that you're looking at? Like for me specifically, I'm going back to basics. I'm saying, look, we're going to need layer one blockchain power. I'm looking at the fact that the best use or the biggest use of Blockcase is transferring stablecoins from one place to another, fiat-backed stablecoins from one place to another. I'm looking at the fact that blockchain is all about trading, and so I'm investing in exchanges, derivatives exchanges. Are you looking specifically at any narratives?

Not individual things, but maybe just narratives. I'm going gonna coin the narrative everything everywhere all at once i literally think so much money went into vc in the last cycle and it's not wasted capital as the narrative would tell you there is an enormous amount of funding gone into an enormous amount of projects they could be layer ones it could be layer twos they could be interoperability layer they could be def DeFi, there can be game, game, they can be web three, unlocks, there can be new wallet experiences, new stablecoin experiences, everything. And I think all of that $67 billion of VC that went in in 2021 2022, basically will bring these new experiences, and it's going to be all of the things you know as i said before

finances is gigantic it's the elephant in the room and we're seeing so many people building within the financial industry i'm not talking defy here i'm talking the biggest players in the world excuse me um and so i think the finance system the kind of web3 nfts i mean this and i'm not trying to shill solana but this solana compressed nfts of being able to have a million nfts for a hundred bucks basically is cheaper now than ticketing so that technology unlocks all of ticketing to go to nfts it unlocks a lot of things so that's why i think i think we will have a lot of luck with a lot of our um with a lot of our kind of hypotheses from the last cycle metaverse we're seeing what apple is about to launch we know where meta themselves are going and we're seeing other projects.

So that interoperability of assets that you need to navigate in this new kind of AR, VR world, that's coming. Gaming, we're seeing a lot of action in gaming, a lot of people building Web3 gaming stacks and Web3 assets. So yeah, I just think it's going to be everything. It's going to be a bit head spinning, much like the ai revolution has been in the last six to nine months it's kind of had everybody's head spinning to get to get that their minds around what's going on i think i think it's going to be everything everywhere all at once don't you think that that there's some um slow down in the veracity of the bull market because of regulation, because, you know, it's becoming harder and harder and harder to list shit coins because exchanges are clamping down a little bit more

because they're a little bit more scared. Don't you think that's going to slow things down and kind of like make it much more of a normal market? And the reason why I ask this is, is you know i look at the nasdaq and i look specifically at the nasdaq from you know pre 2000 2000 2001.com collapse and then 15 years to get back to where we got to today and i look at every other technology cycle and in most other technology cycles you've had one crazy bull market then you've come down and then slowly slowly, slowly, slowly, you've gone back up to the levels of that bull market. Do you not think that to expect crypto to keep having these violent bull markets is

a bit of a wishful thinking? No. So the adoption of the technology, I've been following the adoption curve of Bitcoin for quite a long time now and post about it frequently. The growth rate of the adoption of the technology is averaging out about 100 and something percent a year, depending where you are in the cycle. And last year, in a down 80% market, the actual adoption grew 42%. So we are at 425 million active addresses in crypto, and that is only going to grow. It's going to grow because stable coins, CBDCs, the finance system building on it, Web3 applications and unlocks, ticketing, gaming, all of these things.

And so it goes from 400 million users, which is still early, right? That's what, 10%, yeah, it's 5% of the world population. And the next time you look back, we'll have a billion users. And then you're like, okay, now this is serious. That's an eighth of the world. And then, so we are not there yet. 5% doesn't give you stability and lower volatility. That comes later. So my bet is that comes after 2030 when we start to see then CBDCs rolled out at scale and seeing at that point 2 billion people using blockchain technology then after then you start to see that but we still see the nasdaq still technology overall the nasdaq still does something like 25 returns a year i mean still massive because of the technology technological adoption that

goes on with new technology so yeah no i think this goes on for a while. Does it look like, you know, each bull market in Bitcoin is less frenetic than the last? I think that makes total sense. But smaller tokens, because they're less liquid, they will be as frenetic as the early days of Bitcoin were. And it just keeps rolling through

until we get some sort of closer to a steadier state. But we're a long way from that. Yeah. Go ahead, Mario. I was gonna ask you about i was gonna ask about nfts uh well we kind of mentioned apes and punks and people like to dismiss nfts at least as a term that is dead as a technology that has a future how do you think the nft ecosystem will look uh mid next year well i think everybody's still too narrow in their understanding of what an nft is every single thing we do as humans is basically organized by a contract whether it's Well, I think everybody's still too narrow in their understanding of what an NFT is. Every single thing we do as humans is basically organized by a contract, whether it's a verbal,

societally understood, or written contract. So that's me turning up today. This was an email, but it was a contract between us to say, hey, you know, we'd like you here and I commit to doing it. Everything we do is contract. Society is organized by contracts. The legal system is organized by contracts, everything. What NFTs allow you to do is have a trusted source of contractual truth. Now, that could just be a ticket for a concert, but it could also be an OTC derivative, a complex option, which is basically a unique contract that has certain types of rules governed by it. So for me, NFTs are much bigger than people understand. The entire NFT space, I think 6529 put out a post this morning

or yesterday, it's still about $8 billion or something. It's nothing. It's absolutely nothing. And when we look back in 10 years' time, we'll go, really? We missed the fact that this was a multi, multi-hundred-billion-dollar market because contracts are going to go in the digital world? Digital. Simple as that. So let's go back. Okay, so that's the broader concept. What does it mean for our JPEGs? Usually, like all crypto cycles, a whole bunch of this stuff is worth absolutely zero. And I would say 99% of everything that came out

in the last cycle is worth zero, much like ICOs are worth zero. And a lot of stuff is worth zero. But within it there are things that endure now again this becomes very difficult and complicated what endures some endurance is easy you know stuff like Beeple or Xcopy art or some of the high-end art market well that's relatively easy but these things are bloody expensive as they are then you've got punks they're a status symbol and I don't think that goes away apes high risk to them let's wait and see you know yuga needs to perform if you know

but even if um yuga went bust then maybe they even have more value when yuga goes bust or whatever they have more value because they become a snapshot of a moment in time that is forever recorded that we're all participating in so overall i, I do think the NFT market's bottomed or bottoming here. That's that 18-month lag, roughly, or 15-month lag from when ETH bottomed in June of last year. So around now would be a perfect timing for NFTs to bottom. I think they have. And then they will have the nft spring which will be

messy doesn't nobody believes it you know just like we've gone through with crypto and then eventually you have nft summer which will be 2025 probably or this time in 2024 mario i was telling raul and i when we were talking on monday we're discussing that spaces we had not long ago ran you guys remember where literally the entire stage was pfps and it was like all these huge collectors and founders of projects and every one of them thought it was over do you remember mario and that's when you and that's sorry about the background but that's when you became that's when you became bullish scott is like for the first time scott was bullish on pfps more than people that had a PFP as their profile picture. Those NFTs are a profile picture. They were so depressed.

It was a few months ago. It was a beautiful day, wasn't it? This is exactly what we look for. It's a beautiful... I don't know if you ended up buying, you ended up sweeping some floors, buying some NFTs, but that was exactly what a bear market means. You should. That's what a bear market is. That's what we wait. Every bull market, we say we've got to wait for the market to crash. We've got to wait for everything to be down 95%, everyone to be depressed. That's what we're going to buy. But then every time this happens, we just chicken out and you're just chickened out again.

Right. And also, I mean, Raul, like to your point, I think the floor is probably in, especially in dollars right because if we think that we're going into a bull market and ethereum is going to rise you know the eth price may stay the same or drop but it's still going to cost you more if you're trading in dollars right now i think that i think that's right probably outperforms dollars for a bit and then eventually we'll get the kicker effect on top of eth you know where punks go from wherever they are now, and then they triple or quadruple or 5X versus ETH. You can make a lot of money in that time. It's that call option on ETH element that some of these collections have. And again, it's a very basic human thing.

People start making money in crypto. We're all feeling like we're going to make it. So we want to go out and buy something to celebrate. So we start buying punks. And there's only 10,000 of them. So the price squeezes higher, which makes people want them even more. And off we go. It's the same old rinse and repeat. But, you know, these things have value to people, and that's fine.

Rand, are you convinced yet? We need Rand. Now I'm not convinced. Now I'm not convinced. Oh, come on. You're not going to convince me. Brandt, it's fine. I respect you for that.

That's okay. I'm the Peter Schiff. I'm the Peter Schiff of NFTs. I'll never be convinced. Okay. What about, let's go deeper on that then. Not to Rand, but even Terrell specifically. Okay. Let's go deeper on that then. Not to Rand, but even Terrell specifically. Okay, so maybe we've seen the hype bubble of 10,000 NFT collection, PFP.

Can I start? Do you mind if Raul and I have a conversation about this? I would love to. I wasn't convinced by Mario's argument at all. Raul, I'd like to make my case for NFTs or against certain NFTs. I'm really, really, really open-minded if you can convince me. Mario's argument previously didn't convince me, but I think that you're a much bigger intellect than Mario, and I respect your opinion a lot more than

I respect Mario's opinion. So I'm very happy to have a discussion with you. So this is my issue with NFTs. First of all, I want to say at the onset that I think NFT technology is absolutely incredible and it's going to absolutely change the world. I think every single license document, identification document, a concert ticket. I can go on and on and on and on.

I think every single one of those is going to be an NFT. I think that every human is going to have an NFT identity where they're going to be able to pay gate their data, which is all owned in that single NFT piece of technology. And I think the list of use cases for NFT technology goes on and on and on and on. And for that, I'm super, super, super bullish. And that's why I remain a big investor in NFT exchanges, in NFT lending platforms and

stuff like that, because I really believe in the technology. However, what I don't believe in is the NFT JPEpeg which people bought which was computer generated and people bought this because they thought that they were part of the club and i'm going to explain so and and when i list that i mean things like punks i mean things like apes i mean things like doggies all those other or dick butts, vaginas. I saw many, many, many collections like that. And I'll tell you why I don't believe in it fundamentally. So I've been a part of many clubs. And when I'm a part of a club, I share a certain passion point

or real point of interest or culture with the people in that club. The first club I was a part of was, I was a club of males. The next part I was a club of, I was a part of the Caucasian club. Then I became a part of the Jewish club because I was born Jewish. Then I became a part of the school educated slash university educated club. Then I became part of the Harvard club. Then I became, and each, at each step of the way, I, the club got more niche and more in my interests

and people that were part of my interests and my culture. So I'll give you the, one of the ultimate clubs as part of YPO, Young Presidents Organization. And that was a club of people who, under the age of 35, managed to build businesses with a certain turnover and a certain amount of staff. And it was a very, very, very exclusive club. And it gave you a whole lot of perks and accesses.

But at all those points, we all worked hard to get into the club. And I shared certain values and culture and traditions and with the people in the club. Now, my problem with these NFTs is that you don't share any value or any culture. It's just the fact that you all decided to buy a collection, which was generated by a computer, of pictures. And what we're realizing now is that actually the people collection which was generated by a computer of pictures.

And what we're realizing now is that actually the people in these clubs have zero similarities. I've met people in the board ape club and I thought to myself, if I would have bought this ape, would I have any value of being in a club with this guy? And the answer was absolutely not. And so I just, that is where my thesis, where I turned around and I said,

you're all saying that you're part of this club, but you don't believe that there's no fundamentals of this club. It's just pictures. There's no values. There's none of that. You sound like a boomer saying that Bitcoin has no value because it's not a real asset.

Now, I thought we could have an honest intellectual conversation, but now you've just stooped to my level. You see what I went through, Raoul? You see what I went through? It was like talking to a wall for 30 minutes. One of my worst days.

Ran, yes, in the concept of which you understand the framework of what a club and society is that may be valid for you but for other people this is an identifier as part of a cultural movement of which we proudly belong to so a punk is not i mean i'm actually on a telegram chat of most of the punks and there's a lot of interaction between the meetups helping each other out doing stuff but it's not about that for me it's basically a cultural

signifier saying i'm part of a movement i'm part of this and i believe in this movement and so that signifier is something i proudly carry whether it's my age and the people in this movement believe in what the people in this movement believe in what? The people in the movement believe in... What is the fabric that combines all of these? They believe in Web3, which is a decentralized digital world. Bitcoin. No, that club's called Bitcoin. I don't need to own an ape.

I believe in that and I'm proud of it. So Bitcoin doesn't enable Web web 3 web 3 is a much broader concept and you're a marketing person an advertising person you understand eth is just the underlying infrastructure rail but the applications layer is the nft so if you said to me hey listen i think nfts are going to be enormous. I don't disagree. So humans like culturally significant things that mark that they were part of this, this massive rise. And what they will do is they will own NFT. So if we go back to a different cultural generation, let's say the baby boomers, the baby boomers, their cultural

thing really became some of the artwork that came out of that period. That's why Warhol is worth such a fortune. It has no real value. It is actually just paint on a piece of paper. It's actually valueless. But we hold a cultural premium to that because it matters. And these things matter. Digital objects matter to many of us. So some of these are enabling, you know, for example, we use NFTs at Real Vision for token-gated content. So if you're a member of the Real Vision Collective, you use it. You can then unlock content and use it as your membership pass.

Fine. That's not there to drive speculative value it's just utility value but speculative value will always accrue to humans because they always seek it because they seek prestige via assets now behind this is the fact that the digital art movement is really real there's an extraordinary revolution going on in digital art generative art and you you know you dismiss computer generated art much like people you know people dismissed warhol or or you know other artists where they didn't understand the concepts of what these people were saying but other people did they said well i understand it therefore i want to own it

therefore i want to show it off and i will pay hundreds of millions of dollars for this stuff we're seeing that in the digital art market i mean there's an amazing refique who's got the uh the incredible display in moma i mean that's a huge moment for the world because moma said this has been the most successful exhibition we've had in years it's the first time we've ever had in moma a young generation coming to look at art again so okay there's a cultural significant moment that maybe you haven't seen it because you're thinking of it through one lens which is the club when it's not It's the culture. I'm not convinced, but I hear you. I hear you.

I mean, you know, I think we just saw a crack in the facade. Again, from advertising, Ran. I think you did it. From advertising, Ran, you know that culture is everything. The difference between a Nike and another set of trainers

is fuck all. Culture. It's culture. Yeah, it. Culture. It's culture. Yeah, it's culture. It's culture. I agree with you, but I don't see how NFTs create culture. And maybe it's really-

It's not for us to say, right? It's not for us to say. Culture is. It is not for us to say. I mean, it's Josh Wolf, the VC says, you know, some of the best investments he's ever made are the ones when he hears parents say, this will rot your brain to their kids. And as soon soon as he hears that he knows it's going to be massive

like TikTok became culture I mean it's it's ludicrous TikTok started with people singing and dancing it's ludicrous but it became cultural and it's I can think of it's ludicrous but I can't denigrate all of those people who find TikTok an engaging and interesting, rewarding experience. It's not my role to say, you guys are wrong, I'm right. My role is really to observe it and say, yeah, I don't get it, but I'm observing it and I can see it has cultural relevance to you. Same with music. You may absolutely hate a certain type of music, but why the fuck do people like this? And then before you know it, it's massive.

And it matters. Why do people pay so much for Taylor Swift tickets? It's because it's a cultural moment in time. It matters to them to mark their lives. I'm feeling a bit warmer. I'll concede that Raoul did a much better job than me than Mario. Mario, sell your punk i'm feeling uh i'm feeling a bit warmer i'm feeling a bit warmer ral i wanted to ask you another

question unrelated to nfts uh you gave us your outlook for crypto what are some things that could you know change your outlook for the worst over the next six to twelve months what are some things we should be on the lookout for you talked about a credit crunch uh getting worse for example um any other indicators for us all right cool now we should be worried again so credit crunch is positive because it means that the federal reserve need to stimulate more cowbell so i i think that as a positive the only one is the one that captures everybody's imagination all day and all night which is war you know what happens if we go to kinetic war with china or what happens if you know i i actually choose to discount that having lived 30 years in macro and seeing the cries of war every five years or so in my career and seeing everybody get utterly

captivated at the end of the world is nigh and we're all going to die and all assets are going to zero mark my words my friend you see this is all wrong i i just discount it i'm like fine if we're going to do that we've got bigger problems on our bloody hands than the value of our crypto so i i kind of ignore that so really it does something disrupt the overall macro outside of the death of everybody living human on the planet. And for that, we would have to see something really change, maybe economic growth wildly accelerate, which I think it will actually accelerate, but I think we've got the slow part to still come. And interest rates never come down and then interest rates go up to 10 but even then that rate of change of interest rates from five and a half percent to ten percent is much less than what we've just come from so the rate of change matters a lot um so

i i don't see it i don't see why the business cycle, which has operated for the last 100,000 years, why it stops. I just don't see it. Sometimes assets don't recover. And we've seen that with many emerging markets, European stock of such gigantic proportions and then a breaking of the economy driven by demographics so we see that particularly in europe where the aging population doesn't buy equities anymore um and you know it's a much older population and that slows everything down so that's possible but you you know, I also eye the rise of AI and say, well, our demographic problems are now solved because robots and AI are

demographics and we can now have infinite people or productive units in the workforce. And that's a net very positive thing. So yeah, you know, I'm pretty sanguine. I think it just looks like a normal, um, just like a normal cycle. That's pretty bullish. Um, Scott, Ryan, any other questions?

I think Ryan dropped. I think Ryan is so depressed after that discussion about NFTs. He just dropped out. He's a screw this. I'm going to buy a punk. I'll just say, it didn't make you feel like you wanted to sell your punk. Cause now, you can sell it. I'm going to buy a punk. I was going to say, it didn't make you feel like you wanted to sell your punk. Because now...

Me? You can sell... The day Ran enters NFTs is the day that the peak is there and you should sell your NFTs. That's my indicator that we're each... The day that his photo becomes a PFP. That's it. He can buy quietly,

but the minute that he becomes an ape, I think is our top signal. And we can say this now because he's not here. Yeah, but I think, Raoul, your outlook, I like your answer to the question. Even during war, is there any chance during wartime that Bitcoin becomes a store of value during times of uncertainty? Because looking at kinetic war between the superpowers

is something we haven't experienced in a very long time. Is that a possibility possibility in your opinion? Look, again, I don't really want to think about a kinetic war between superpowers. But the focus is more like whether Bitcoin as a store of values is during extreme uncertainty. A war being one example is something that... I believe that to be the case and you know i was in europe during the european sovereign debt crisis um we had a lot of civil

unrest and then we saw um cyprus happened where money was basically stolen out of everybody's accounts uh to pay the government's bills or the obligations of the banks um bitcoin is transferable if you are in let's say you know ran is in south africa and let's say south africa society falls apart the utility of bitcoin rises massively because you can flee um you get things out of a banking system you get things a bearer asset that you can move around with those things become extremely valuable so yes in extreme stress you tend to have the risk off moment and then after that you tend to get the moment of actually this is very useful to me and you know the more the world tries to separate its trading you know that's that's the rise of stable coins most people don't realize it

the stable coins are actually being used a lot by corporations making payments between countries that have um capital constraints and capital restrictions you know south africa being one of them um indonesia being another malaysia them, Indonesia being another, Malaysia being another, China being another. So those people get around it by using stable coins. And that just shows you the utility value

of a non-political currency. Cool. On that point, Scott, any final quick words? No. I got my hour with Raoul already earlier this week, so my questions have been

answered. Now, I think Raul is a great chat. Any final words for the audience? You know, it would have been a final words are good during times of suffering and pain and uncertainty. But I think after the last 48 hours, people are a bit happier. But any final words of advice before we wrap this space? Yeah, look i i do honestly believe that we are going through something humanity is going through something at a speed that we've never done before which is this idea of the exponential age this is this nexus of technology macro crypto all at the same time at a pace that makes our head spin. I think people need to navigate these times by being optimists. You can invest in your own demise of the AI and the robots. You can take advantage of

changes of the new system by investing in crypto. You can get around the debasement of currency by the central banks by using crypto as your rails. You can build new businesses. There's new opportunities everywhere. And the world seems like a horrible, scary, terrifying place, but it's also a world of opportunity. And one thing is, you know, people listen to this. You know, I actually follow this. I've just started a whole new YouTube channel,

which is called Rail Pal, The Journeyman, which is just me following that journey because I'm trying to learn like everybody else is, where the hell is this all going? Where's the macro going? Where's the crypto going? Where is the technology, the exponential age going? So people, feel free to go and pop over there

and subscribe to the YouTube channel. And I'll try and take you on that journey to try and make it less confusing for everyone. Thanks, Charles. Really a pleasure to have you. Scott, any final quick words as well? My final quick words, Mario, is that you need to make your way across the world

and head down to the Caymans and go to dinner with Raoul. I should. There's a restaurant down there, man. It'll blow your mind. So Raoul, on a serious note, I've been watching your videos throughout the bull markets and the bear markets.

So I highly recommend people check out your platform, Real Vision. And a pleasure to have you as always. Thanks for coming on. Thanks so much, guys. Thoroughly enjoyed it. It was great fun. Thanks, Ron. Don't forget to send me the invite for the dinner that Scott kind of hinted at.

Well, you need to get here first. I'm not paying for your bloody flights. Thanks a lot. Thanks, everyone. Bye.