The Wolf Of All Streets - Debate & CPI Trigger Bitcoin Drop: What’s Next? | Crypto Town Hall

Episode Date: September 11, 2024

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I'm nursing your face today. It's a breath of fresh air, my friend. I was living in fear of being alone up here as a co-host, and you showed up on the right day. You're talking to me or Mario? You, that guy's... Come on. Bro, I had a vacation. I went to Kenya with my family. It was absolutely amazing. I tried to do the Scott thing and go on an amazing vacation. It's very important, man.

No, no, no, all jokes aside. Super important. You know, one of the things that I actually did was I kind of, I said to myself,

I'm not going to do any work while I'm there. Like literally, I'm not going to join the morning research calls. I'm not going to do any work. I actually want to spend like really focused time with my, with my family and with myself. Right. And that's, um, that's exactly what ended up happening, except for one caveat.

I ended up doing a lot of work, but the work wasn't actually doing work. It was thinking work. So like I sat back and I actually had time to look at my whole portfolio and make like fundamental changes to my portfolio, which like ordinarily i wouldn't do because you know i have a theory in life and the theory is if you're thinking you're not doing and if you're doing you're not thinking so you've got to choose whether you want to be a doer or thinker right so like we're in the day-to-day grind i'm doing so much i'm making a show i'm building like

discords and you know all the crap that we do that I land up not actually having time to think. And my best thinking time is actually either on vacation. And when I come back from vacation, I come back with like a to execute list. And it's like this massive to execute list. So it's either on vacation or when I go on long flights to the States, 30 hour flights. Because then you've got like 30 hours, the internet's usually pretty crap crap and then you've got time to really think and make like proper decisions and one of the things that i did was i ended up thinking and making massive changes to my crypto portfolio and now

that i've made them i feel like fuck like wow like i feel so light and happy with what i did and i actually started i'll explain the changes that I made to my portfolio. First, I'll tell you what I did, and then I'll tell you what the thinking down was. So what did I do? I switched my GBTC, which I had, into MicroStrategy. I bought more Coinbase. I bought Rollbit. I bought Aerodrome.

I bought more Drift. i bought a whole lot of others and then when i actually analyzed my decision i wasn't doing this intentionally it wasn't like i set up on this like strategy to buy those things i just literally looked at my portfolio i don't have enough of this i don't have enough coin base so when i analyzed afterwards and i analyzed my logic afterwards so here was my logic. My logic was, so the first change that I made was I switched from GBTC to MicroStrategy. Now, that's a very bullish move. That's like saying, because MicroStrategy is leveraged Bitcoin up or down.

And by moving from GBTC, which is Bitcoin, into MSTR, which is leveraged Bitcoin. That's like almost like reaffirmed that my outlook for the next couple of months is bullish. And that's the same reason why I bought Coinbase. Because again, Coinbase is a leveraged bet on the crypto market. Crypto goes up, Coinbase goes up a lot. Crypto goes down, Coinbase goes down a lot. So I added a little bit to my Coinbase position. But all the rest of them, which it was like nine out of nine trades that I made, were all trading platforms. Rollbit, Drift, Coinbase, Aerodrome, all of them were trading platforms. And I was so happy when I analyzed it after. I said,

if this technology is about creating, sending, and trading value, I don't care where the value is going to be created. I just want to earn the picks and shovels. And I feel so much happier about my portfolio because I'm probably now like 60%, 70% in L1s and trading. And the rest, I mean, the creators of the value, so like gaming, AI. And so actually, these holidays are amazing because you get time to actually think and reflect

and execute things that you ordinarily wouldn't be able to do. That was amazing. Yeah, that was my thesis in the last cycle and it remains my thesis is that 99.9% of people in this space will never have the time, diligence, or even timing and luck to pick the 100x or 1000x. And all you have to do is own

the layer ones if you want to participate. And at least you'll get the 2x or 3x accruing the value of everything that's being built on it. I mean, that was like my roadshow of mainstream media interviews that I did, unfortunately, towards the top of the last cycle. Yeah, but the thesis still remains. The technology is about creating, sending, and trading value. And if that's the thesis, you need to be in the things that allow you to create, send, and trade value. That's it.

Totally agree. And I think it's a worthy conversation. And I really love the micro, it's a worthy conversation. And I really love the micro strategy from GBTC point. Although Juan, you're going to tell us it should have been bitwise, right? Of course. What is going on here? No, but wait, in my defense, this is my old GBTC, which I held from, from a long time ago.

And I'm trying to get to sell them, but I don't want to sell them and switch them into other ETFs. But when I switch back, then I'll switch back into other ETFs. Yeah. Juan, we've had, I mean, we can talk about ETFs before we get into the, I think, simple price action here, since we have you. I mean, we had that sort of eight-day streak of $1.2 billion of outflows and then bounced back into inflows. I've talked to Matt about this, obviously, Hogan of Leighton.

It seems like at this point, inflow-outflow should just become a less impactful narrative. I mean, we don't talk about the inflows and outflows of like QQQ or SPX, right? I mean, these should be well-established enough ETFs that we know they're the most successful of all time. They've gathered $50 billion in AUM. I mean, it seems like it's just an echo chamber sort of focus at this point on what's happening on a day-to-day basis, right? I mean, generally, the trend is up. Yeah. Everyone was excited by the launch of ETFs this year. And so we've been myopic about what happens day in and day out, week in, week in, out with the inflows, outflows.

But exactly. It's a long-term trend. We need to forget. We need to move away from being so short term minded. We need to start looking at it, if anything, maybe on a quarterly basis, seeing what's happening there. I mean, with the Bitcoin ETFs, we had pent up demand, which we knew from our survey telling us 88 percent of advisors were of the Bitcoin ETFs, 12 billion in inflows, net inflows. And then the second and this third quarter, they've been more measured, still up 2.4 net inflows in Q2. And we're at 2.5 this quarter, even though September has been a down month, which is par for the course. September is historically the worst month for Bitcoin. The silver lining is that October, November, December are strong months. But, you know, we had a huge wave of initial inflows from early movers and then those,

you know, tempered out. And now we're waiting for a second wave. We just saw Morgan Stanley approve on a limited basis for high net worth individuals recently. And so we're waiting, you know, they're going to then open it up to the rest and other wire houses are going to come online. And so we're going to see continued inflows. It's just, you know, we need to take our mind off of the what happens week in, week out. We're still 17 billion net inflows year to date, which is the best ETF launch in history. So there's still more to come, a lot more to come. As we know, more corporations are looking at it. This year, we've seen quite a few corporations convert to a Bitcoin balance sheet strategy. Others looking

to allocate maybe on a more measured basis. We're seeing governments, pension funds, sovereign wealth funds look at it. So we just need to take off our mind off of what happens on a day in, day out basis. And then, you know, this month, Bitcoin down par for the course. And then what happened over the last day? Bitcoin is looking for more aggressive rate cuts than Trump to win. Last night, Kamala killed him and core inflation this morning didn't budge. So we're getting higher odds of Harris winning at this point and a 25 basis point cut in the coming meeting. That's firmly in the odds now.

So I can't put my eyes down. Hold on. Do you think Kamala killed him honestly or do you think she just beat him well i mean uh in in both polymarket uh and predicted um she was up four points and and trump was down four points which is rather significant yes but but hold on can i just throw a caveat i i listened to the debate um and i must say i i think not unexpected uh she was she's a bit she is a better debater than Trump. Trump's not a great debater. She's much more calculated. She's much more logical, which Trump is not. Trump's much more charming, et cetera, et cetera.

I think that the market had expectations that Trump would destroy her. There was this whole narrative of I'm going to let her speak, and the more she speaks, the more damage she did. And I think that all that happened was that she didn't speak and do damage. And so that is, I think, what the market kind of said. Oh, hold on. Maybe she's not that destructive. I don't think – I mean, if it was like if the aliens came in and listened to the debate, I do think she was maybe a little bit better.

But I think she killed him. Well, okay. I'll let the rest comment. My last comment on that is I thought she had a lot more substance behind what she said. She definitely put him on the defensive. Yeah, she's a great debater, presented much better. But then, like, his rebuttals were, you know, he made no strong points, kept on digging in and diverting the conversation to things that didn't make sense a lot of times. So I think she, you know, she definitely did a lot better.

I would say she did kill him. It doesn't matter. i'm not part of this i think it matters rand i do think it matters if the public perception is that i think there are fence sitters i definitely think it matters the thing is like if you want i can guarantee right now in the comments that it's just going to be like this dude has tbs this dude has like, this dude has TDS, this dude has TDS, this dude has TDS, right? Trump derangement syndrome. And you cannot have an honest conversation about anything. To frame the debate in my mind, and then we can talk about how it affects Bitcoin. I think it's like, if you have, let's say you're a huge fan of a team or better yet, you're a huge fan of a certain tennis player, right? And there are times that that person can be the best in the world, but that tennis player is going to go out and lose some matches.

And as a passionate follower and believer in that tennis player, you're still a fan of them and you accept that they lost and you move on to the next one, right? That can't happen in politics. Nobody's looking at that debate and even giving the other person the chance to quote unquote win or beat them. Listen, I feel like I'm a pretty objective, unbiased person. I feel like it's very clear that Trump would be better for the crypto industry. The industry wants him to win. But we're trying to watch that debate through a lens of two people

and listen, taking out policy because it doesn't matter what they say. If you don't agree with their policies, that's fair. Or taking out the emotion or any of your feelings about the people. She whipped his ass. And I didn't expect it. I didn't want to necessarily see that. But she was articulate.

I'm not saying what she said was true. I can't tell you if that was. But she was articulate and she had him on his heels from the beginning. She was on the offense and he was on the defense. That doesn't mean if you love Roger Federer, that he can't come back and win Wimbledon after he lost at the French open, right? There's going to be more debates. There's going to be more times, but objectively, I think if you were watching that,

and you tried to do it through an objective lens. And as long said the market agreed, right? You can argue about it all day, but the market agreed. Like he's down, she's up. And that means that we see Bitcoin going down to some degree. Totally agree with you, Scott. And just before I know, Dave and Jonathan have their hands up just before they comment. In case you guys know, because I haven't looked at

it. I think what matters most is seeing what the swing states, how the odds change and the reaction in terms of those states, because those are the ones that matter. I mean, I haven't looked at that yet, but yeah, if either of you have looked at that, that'd be good to know. Yeah. I'm assuming now I also will have TDS. Go ahead, Dave. Yeah. I mean, look, Trump basically in that debate, the best analogy I would say is for those who saw the Pixar movie Up, he was like Doug the dog chasing squirrels the whole time. You know, his campaign knows that Harris walls are vulnerable on probably five issues. I'll talk about four of them. He effectively focused exclusively on

immigration, and that is an issue they're vulnerable on, and she does own that. And I think that cat-eating aside, I think that he did get that point across. And his point about the fact that she's in Washington was a good point, but he completely missed the boat and let her get away with making statements on the economy. Her plan, as we know, to increase homeownership is government handouts. Handouts are not popular with the American people. He never used the word handout. He never used the word budget deficit. That was a massive mistake. Second, her plan to bring inflation or controls is price controls. Once again, not popular with the American people. once again, has proven to be

fail every single time it's ever been used. And once again, he never mentioned it. He used the word Marxist sort of obliquely, but people don't know what the hell that means. It's a label. It's not an actual argument. And he had more than enough time to do that. When it came to foreign policy, I mean, sort of obliquely, you know, he kind of pointed out, you know, the realities. But when it came to Afghanistan, he completely missed the fact that Biden and Harris ignored their generals and left Bagram Air Force Base. And he kind of did say about the $85 billion in equipment, but kind of that's an issue that really pissed Americans off. And he missed that opportunity. So basically, you know, look, everyone here knows that i was a debater and i understand

debates he lost because you know what we would say if i were judging the debate i would say he dropped all the arguments that mattered now will that matter in the end i think scott you're right i think that you know the the real question is will the trump campaign be able to point out to the american people that when they vote for harris they're voting for price controls they're voting for government handouts they're voting for a weak foreign policy or not and the answer to that is that's right markets markets telling you it's 50 50. it's a point flip and and and yes it moved from a slightly winning coin flip so you know before the debate trump had pocket queens and after the debate he had the ace king and she had pocket

queens i mean okay it's still a freaking coin flip and you know we got a lot of time to see Trump had pocket queens. And after the debate, he had the ace king and she had pocket queens. I mean, okay, it's still a freaking coin flip. And you know, we got a lot of time to see, you know, what will happen. But that doesn't mean that when I was driving, because I was coming from a meeting, and listening to it on the road, I almost drove off the road several times, I was so aggravated by the fact checking on one side and lack of fact checking on another. I mean, you know, that is the other thing that pissed that pisses people off. I mean, if you're on the fence, and you hear the Charlottesville stuff being talked about, which we know, was based on a bad edit of what he said, and you hear all this other crap that they say, it's just, without being fact checked, it's problematic. And that

does piss people off. But look, you know, there's a long way from here. The issues that I laid out are the ones that matter. The one that the vet cares about is the ones that aren't and they didn't talk at all about our issues in terms of health and food safety and talk about all about self custody or in any sense of innovation in financial markets for crypto. I mean, both of those topics are ones that are winning topics for Trump that he needs to identify and

there will be more debates. That's the point there. Right? he'll have his chance i think he you lick your wounds and you come back stronger yeah but you know someone needs to basically get through his this i'll say it his thick skull and say listen don't rise don't take the damn cheese when she throws it into the maze and ask you to go down there and focus on what you have to focus on. Yeah. And, you know, it's interesting. And Jonathan and Dennis in a second, but like, you know, I think that one of the more sort of side things worth looking at is that you get this sort of on both sides, media portrayal of the candidate and how they're going to be. And it ends up being wildly different. I mean, listen, we were told that Biden was totally like in good mental health, right? And everybody saw the debate who for some reason, believe that said, wow, I had no idea. Right. And I think that there was a lot of people,

the reason the debate matters in context is that I think it's hard to now say that she's like an incompetent moron or whatever, low IQ, all the things they were saying about her, because she performed well and sounded intelligent whether it was uh what you wanted to hear or not but the debate is going to be forgotten in three days and people are going to start asking about policy again to dave's point right and so i think it's still going to always come down to policy i just think it's at a more even playing field for how people view them, you know, Jonathan and Dennis.

Yeah. I think to me, it seemed like I, well, first off, I don't know if any debate has ever changed anybody's mind this, this close. And I don't think that's,

that, that that's happening. If her goal was to not talk about her policies because they're indefensible and just to have a debate to challenge the man and not the policies, well, that's what she did. And if that was the intention, debate him into winning. I mean, she's an attorney. She has made a career out of arguing. But did she talk

much about what her plans are? And that's going to come back. And what really happened, what's really going to pump up the Trump base more is the fact checking that went on against Trump and what didn't happen really against her.

And that just reinforces the belief, whether true or not, that the media hates Trump and that there's a combined effort between one side and the media to go after him and to end him. It plays into that side of it very well. Yeah, it seemed one side from the people asking the question, certainly. I think that's fair. I mean, Dennis, what did you think? And then I want to bring it back to the market, because obviously it's not a political space,

but I think the reason guys are talking about this is because you can see bitcoin move and we've had a few weeks or months in the past year where bitcoin kind of moves with the odds of a trump or harris victory so it's become a meaningful metric for the market go ahead dennis yeah. Happy to. Well, thank you for letting me be the final thoughts here on all things debate. I think, first of all, I wasn't sure who was speaking just a moment ago, but I would just have to push back a little bit on this idea that debates don't change minds. I think they absolutely change minds, especially when voters have not made up their decision on who they're going to be voting for. I mean, we don't need to look any further on how debates can impact a race than the last debate where that candidate is no longer in the race anymore and was then thus supplanted by

Kamala Harris. So debates can absolutely have an impact on the race. I'm sure we're going to see that there was record viewership for this particular debate. And I am really interested to see the way it playoffs. I think that I think one of the most important things from a messaging perspective, that's really interesting here is that we've, you know, clearly seen the Democrat Party move to the middle. To an extent, you could say that they've moved to the right. For the last few years, I had kind of been calling that this country in general would be moving slightly to the right. And I had made one mental error in my thought process around the impacts of that. I sort of assumed, well, the country at the opportunity to be able to recapture some messaging and recapture various types of voter bases that are in the middle. I mean, just look

at the type of messaging that they're using. Kamala Harris saying her and Tim Walz own are gun owners. I mean, that's incredible. You would have never seen that just maybe three or four years ago. You're also seeing the Kamala Harris campaign use the word freedom, which I think is very fascinating. Freedom, I grew up on the far right. My parents are extremely conservative. I lived on the mission field for a few years. This is a word that is very much owned and controlled by the right and by Republicans, rightfully so. They're the ones that champion it the most. And yet somehow we've ended up in a world where freedom has become something that the left is talking about.

And I'm not here to endorse one way or the other. I just think Americans and Bitcoiners and people in this room should be paying very, very close attention to the words that these campaigns are using and how the different parties are talking about the way that they see the American people and our country as a whole. I think really just sort of my last point here is that the Trump campaign and those on the right did a really big disservice to their voter base by saying, oh, Kamala Harris is a drunk. She can't campaign. She can't even do an interview.

She barely knows how to talk. That's what I was saying. It reset the expectation. Yeah, go ahead. Absolutely. I mean, it's really a disservice because now she came out swinging. I mean, she's a prosecutor. It's sort of kind of crazy to try to frame someone who has a career of dunking on people in what would be perceivably a very similar environment where you're up on stage or up in the courthouse, getting ready to litigate someone and get convinced the people there that are in the jury that this person committed a crime or did something wrong. And she's put in that same exact situation here. So I think it's a really big disservice. I think the right should stop underestimating Kamala Harris. I think they should stop trying to

assume that she is not capable. She's clearly capable. Maybe four years ago, the broader crypto ecosystem. Definitely crypto is needing to ask itself, maybe we should be doing a better job of working with both sides and not yoloing our entire efforts behind a single campaign. I've been a big champion of making sure that this movement stays bipartisan. I think we should continue to go down that path. And then additionally, one last note, I think Bitcoin ultimately wins here because Bitcoin doesn't really, is not as directly impacted as crypto is by like a potential Kamala Harris anti-crypto stance as much as crypto writ large is. 100%. I've made the argument a few times. I'm still formulating it. It's not my

final thoughts. But I think Bitcoin can be a winner either way. And to what you said, crypto, maybe not. But I think we know where Trump stands. Obviously, it's very bullish for Bitcoin, the idea of it being a global reserve asset, the idea of protecting self-custody. On the Harris side, if you think they're going to print money like wild, that's generally good for Bitcoin price action. And people, the same people who would buy ammo or guns or move because they fear what's happening. The flight to safety people should buy Bitcoin like crazy if they fear the worst of what a Harris administration would look like. I do see a bullish argument for Bitcoin.

The crypto side, maybe not so much. But listen, I mean, Bitcoin right now trading at 55, 664, pretty ugly price action today. It was kind of wavering a bit after the debate. I think maybe CPI now having an effect on it here. Lawyer, I saw your hand go up. I don't know if that was temporary, but feel free to jump in. Is that a still, is this, I mean, have we had a CPI spaces? Cause I'm quite confused as to why CPI hasn't moved the market. Like, I mean, we've got 2.5%. That's like, we're 0.5% away from, from the feds mandate or is it now all about recession talk? Are we like, okay, we don't really care about inflation anymore. Flavor of the month now, recession. It seems that way. I mean, it seems that way. It goes from like, will we get a rate cut to how much will the rate cut be in like two seconds, right? And I don't even know which rate

cut is more bullish for the market at this point. It's very hard to figure it out. But lawyer, go ahead. Yeah, I mean, I think long term, there's something bearish for Bitcoin about, you know, Elon Musk coming in and gutting the American government's waste. And a lot of those those sentiments, I mean, a lot of the things that Kamala and the left are pushing are very good for Bitcoin in the long run. You know, debasing the currency, if Elon Musk is going to come in and put a stop to that or even indicate that they might strengthen the fundamentals there, that could be bearish for Bitcoin. Yeah, which would be, I guess, a bit longer term, right?

Yeah, a lot longer term. Yeah. People here want to know what's going to happen tomorrow, buddy. They don't want to know what's going to happen after we fix the government. Yeah. Like the idea that the government becomes increasingly responsible, cuts down on ways, stops printing money has always been the theoretical bearish case for Bitcoin. But when has any party done that? So I don't think that that expectation is coming. David, you haven't had an opportunity to speak.

What are your thoughts right now? I mean, either just in general, I think, on the market or what's happening specifically now? Yeah, I think the CPI report, dropping the 2.5, this kind of going off of what was just said, dropping the 2.5%, I think the reason why at least this particular one hasn't really impacted the market, but the volatility that past ones have had is because it was largely expected. And, you know, the drop in the year over year, you have to take into account last August number, the last August number, this the month over month, again, was a point 5% gain to the upside, like a very strong number. And September was too. So, so like, again, next, the next CPI report that we get for September will also show a pretty – most likely will also show a pretty deep drop in the year-over-year rate because the base effect, right, the month previously, it came off the table. So what really matters more in the CPI, and we'll come out here, I think it's the Cleveland Fed that produces it, is when that median CPI report comes out. They take out the 50% of the index that is the most volatile components on a month-over-month basis and just keep the median, the middle, which is kind of like a core rate. And that last time, that report, that index jumped up to 3.8% year over year from being below 3%. And so that's going to be kind of the important one that's just to kind of see where is inflation outside of in the boring segments of the index,

right? A lot of the volatile segments get the pub and the headlines, but the boring segments in the middle, where is the inflation there? And that's the one I always track because it's more correlated to like core PCE and what's going to be going on with that particular index. But right now, the markets, and for that matter, Bitcoin too, the recession odds aren't necessarily increasing per se from like if you were to have Goldman Sachs or all these people that have their recession odds indicators. I don't think that they're necessarily jumping up to high levels.

And and the market's kind of going crazy over that. But what what is important, I talked about this a little bit earlier in another space this morning. What is important is whether the Fed thinks that the economy is moving towards a recession. And that's we will find that out next week, more of what they're thinking, because they will never actually say, no, you'll never actually hear a Fed official say, we're headed towards a recession. They'll never say that. It's like crying fire in a theater. But you can get an idea from their projections, from where they think that the rates will be, say, within the next 12 months months by the end of the year.

And so when we see those projections come out and how far down, if they drop, because they already are pretty, they're already down quite a bit. But if they kind of start to match where the futures market is in relation to that, then you'll start to see whether the Fed themselves are expecting a recession in 2025. And that will have a significant impact on risk assets. And you're already seeing it. I tweeted this out earlier. If you look at my Twitter account, I tweeted that early this morning. There is a shift. And you'll hear people on TV talk about this broadening trade. The market is moving into these other areas besides tech. There is a shift in relative strength towards staples, utilities, real estate, health care.

It has been financial, but those four in particular. There's a pretty strong shift into those areas on a long-term basis. And the last time we've seen a pretty significant shift on a long-term basis towards the safety areas of the equity markets was early 2022, when the market wasn't just kind of moving into pullback mode, but was moving into more of a correction type mode where, you know, correction would be, say, you know, definition wise would be when the S&P breaks the 200 day moving average, and then stays below it. That's, you know, that's what a correction would be, whereas a pullback would just get you down to the 200. So it looks like equity market participants are expecting something to more significant than just a little pullback based off of their positioning. And we'll see next week if the Fed is expecting that too. That's great, Dave.

Yeah, I think that, you know, I think it was Matt Hogan. So I don't want to take credit for it. But he made the point that the Fed, for them to do more than 25, despite what the futures markets were saying, would effectively mean that they had to think something was broken in the economy. And that would probably trigger I think the analogy of fire in a movie theater is exactly right, which is why I mean, this morning's price action in the equity markets and man and Bitcoin, I mean, obviously, NASDAQ, etc, is down as well. So they're correlated today is is kind of of comical but you know look you know people are this is the time of year when people are adjusting their portfolios they're trying to lock in their

gains for the year or they're trying to get you know it all starts we all know you know the history of september and october being the quote danger months as it were in terms of volatility i mean you know in an election year it doesn't tend to really happen. We tend to get pullbacks. And then generally, whoever wins the first 100 days gets a honeymoon period. But hell, we'll see. There's so many cross-currents this year. But the point being that CPI is a lagging indicator, and so is the economy.

And I think most people, most of the smarter economists that I follow all think that we are tilting towards trouble in terms of delinquencies, in terms of both personal and small businesses, in terms of business bankruptcies. Forget commercial real estate. We've talked about that to death, but that's still there. And that's the iceberg below the water. And so, yeah, I mean, there are risks. And the question is, is if you ask the average person, is the Fed ahead of the curve or behind the curve, I think most people would say they're behind the curve. But that

doesn't mean that they're going to change anything, they're likely to stay behind the curve. And so if you're looking to invest on the basis of, oh, we're going to get an easy rate environment, we will, you know, check back in a year, but we're not there yet. And I don't think September is going to be, if the market has its hopes pinned on a 50 basis point cut, I think they're going to be disappointed. And it's as simple as that. Joe, how are you looking at all this right now? Yeah, there's just too many unknowns in the market right now. Whether you're looking at the election, whether you're looking at rates coming down, how much they're going to come down.

There's a lot of money still left in people's money markets accounts. And they're really not looking at those accounts right now and seeing a big drop off in return. And so they're probably just going to hang on to that. But like Dave just said, maybe come back in a year. And those numbers are down in the 2% range. And suddenly they're thinking to themselves, maybe I should pick up some Nvidia. Maybe I should pick up some Bitcoin. And so I think it's just a matter of time. But right now, it's just the unknowns. And the market hates when we don't really know what direction things are going. And so you are seeing that rotation. I thought that was a great comment about people moving into consumer staples.

Someone like a Warren Buffett who is ahead of the curve. He's just slamming Apple into the market for the first six months of the year while everyone's having a heyday. And all of us are just cruising into meme coins on pump.fun. And he's just selling, right? And I think you're going to start to see the rotation into staples. And he's just selling, right? And I think you're going to start to see the rotation into Staples

and he's going to buy back when all the rest of us are selling and you're selling your Solana. He's going to be not buying Solana, but he'll be buying some other stocks and companies that he thinks are worthwhile. And so, unfortunately, I think it's a kind of put your head down and kind of feel it out. I mean, people are, unfortunately, I think it's a kind of put your head down and, and kind of feel it out. I mean, you know, people are readjusting their portfolios. I mean, look at

what Rand came on and just said, you know, he just spent two weeks just figuring things out and then just readjusted a bunch of things. I think, you know, a lot of people coming off of a summer vacation and doing that. And so it's just a lot of volatility in the market right now. And it's tough to play. So it's like, pick, you know, the ones that you love. Really quickly. I'm looking, I mean, I'm looking at the headlines right now. And it's tough to play. So it's like, pick the ones that you love. Really quickly, I'm looking at the headlines right now, just kind of scanning through it. CNBC right now is the headline. Dow drops more than 650 points as hopes dim from more aggressive Fed rate cuts. We're so schizophrenic and don't know what good news is or bad news. Like Dave, my view is the same as yours, that if we 50 basis points right now in a quote unquote good economy with a stock market that's raging should signal to people that the Fed knows something we don't and there's major panic and

they have to cut more. But now the headline is down, down 650 points today because they might just cut 0.25, which is what everyone wanted two weeks ago. It's absolute schizophrenia. It's insane. Right. And so, I mean, you can't trade on this. Right. But it seems like the market is getting what it wants.

Inflation, 2.5 percent should be very, very good news. The Fed can slowly start cutting in a measured manner. Soft landing is what people should be talking about. Instead, we're not going to get enough cuts fast enough for our portfolio to go up in one day. I don't know. Buy the rumor, sell the news. Yeah, buy the rumor, sell the news. Exactly. Jonathan? A quick question for Joe, Dave, Juan, or actually Juan at Bitwise. You know, I like Bitwise's 0.2% ran with your GBTC. They have 1.5%.

Is that a great sale? Anyways, I just totally forgot. I was going to ask. anyways um the uh no i just totally forgot i was gonna ask oh doesn't buffett own like more t-bills now than the fed or or berkshire what both all together isn't it isn't that right is that is that the fact now i haven't seen that i don't know yeah he does but it's just him parking money he's just parking money until he makes his next move. He's always invested, right? He's never not invested into something, right? So he's just parking it. But yeah, he owns more than they do.

$277 billion. Massive cash pile. Wild. Wild. Mario, what's up? What do you think of the debate? I know you guys talked about that earlier. I talked about it at the beginning.

I mean, I don't want to say it again because it's gonna just like one but one sentence you can uh okay but the one sentence is that if you take uh if you don't look at what facts or lies were presented you don't look at policy at all if you look at it strictly as two people debating and how it appeared i thought she annihilated him yeah i think it's uh you know if you look at all the numbers polymarket um trump before the debate was winning by eight percentage points i think it was like 53 to 45 and then during the debate halfway through um she was it was 49 49 and then she even won she even went above him for a few for a bit like a few minutes i think uh 50 49 and then he went above her 50 49 but then settled at 49 49 so i think that speaks for

itself and then there's the polymarket poll of uh who's gonna win who'll win the debate um according to polls because obviously they need to base it on something and it went up now it's at 99 camilla so essentially people saying that she won and polymarket i think is the least biased considering that it's people putting their money and Trump was beating Kamala for most of the time. He's been beating her for the last two weeks on there. And it's, again, it's not people's opinion. It's people saying, hey, I'll lose money if I bet on the wrong thing. So I can't just talk shit because I can't be biased because I'll be losing money. And I think the efficient market hypothesis makes it the best indicator. So yeah, I think it's uh will it be enough to kind of change to flip things because i think trump is

getting some momentum in the last two weeks obviously it's way too early to tell um but um yeah it was it's pretty pretty surprising for kamala does it matter but but does it matter much for crypto and who becomes president or i think that kind of ship is sailed i think we talked about it i think i think it matters massively for crypto. I'm not sure it matters much for Bitcoin, but we'll see. So essentially her position on what security, like who the SEC chair is,

is that why it matters? Yeah, I mean, I think we know, I mean, listen, Donald Trump is on his fourth NFT project and he's launching a DeFi platform with his kids, right? So I think the perception that the attacks would end on the crypto industry itself and the securities and the SEC is very clear that, I mean, listen, and I'm not even saying in self-interest, but it's not like Donald Trump is going to go after OpenSea for selling

unregistered security NFTs when the guy is selling NFTs. I mean, we know where he stands by his actions on that. So I think a lot of people are expecting, unless we hear otherwise, that Harris will be more of the same with the Elizabeth Warren camp and potentially Gary Gensler at the SEC, and it will slow down progress in crypto. But as for Bitcoin, there's a lot of reasons to believe that it could do well under either administration. And it's already got the stamp of approval and is not under attack.

So there's even an argument to be made that money from crypto in the United States, if Harris wins, could just pour into Bitcoin because people fear for their other tokens. Did you watch the entire debate or just kind of clips you in there? No, I actually sat there and watched the entire thing because I wanted to be able to have an informed opinion. I don't always do that, but, um, you know, I think, uh, I think she just, uh, yeah, it doesn't matter.

I mean, that, that, that's my opinion. And I think it'll come more down to policy in the future. Uh, very soon people will forget about this debate and it'll become more down to policy in the future. Very soon, people will forget about this debate, and it'll become less impactful and people start focusing on policy. I just think that the attacks on her for being low IQ or stupid or whatever things they were saying, like those have a lot of, I've had a lot of water dumped on them. I mean, I made an analogy earlier, I basically said, like, if you love a team, your team can sometimes lose, but you still love your team. So it's perfectly fine for Trump people, you know. But, you know, I just thought that objectively, he won. I mean,

she won. Crazy, crazy to think that the election is less than two months away. I can't wait, my God, get it over with. Yeah, yeah true true um but do you want to move on to to salon id yeah go for it yeah cool uh simon how are you is it simon or simo oh simo my bad i mean we can we can stick with simon that's fine similar to my crypto name but call me simon i'm good thanks man how are you hey man um good good good, what are your thoughts on the debate? I'm really generally interested in my economy and I usually follow everything and your your your or just bad though You're just bad. No, so if you can fix your mic Okay. Okay. Let me use my phone. So while you're fixing your mic Yeah, remove the Bluetooth while if we remove the Bluetooth like we covered it just for the orders like I said up to like

9 10 a.m um because of the damn debates so i fucked up my sleeping pattern in dubai again but we covered it um live we did like an eight hour space on it yesterday and we had senator lee we had uh carrie lake we had jank from uh from uh the young turks on we had a few other but i can't remember who else but a few other politicians tim young was there uh but yeah we we covered it live for like eight hours it's pretty uh uh it's pretty pretty epic but um uh yeah i kind of agree with scott's position on that but let's let's dig into some more let's dig into um uh solana ideas solana the cool thing about it the way i describe it and i usually don't like to explain a project on behalf of the project founders who are on stage

but the way i look at it is like essentially becomes like google analytics for web 3 wallace which is fucking cool is that a good way of simplifying it yeah that's the way you can you can frame it um is my audio better by the way yeah bro yeah so um it's like it's a pretty novel concept so that's why we're very careful with making comparison to existing projects like if you're building tech and you're building something that's generally new and people don't really experience yet before and then if you do like if you say something like yeah with a with a google absence for web3 or something then obviously it's a term um that is kind of already branded and and people will associate a certain thing with that

so um that's why we're a bit careful with this. But for the sake of simplicity, we can use it because we're trying to essentially what we're trying to do is enable more targeted marketing kind of strategies in a world that is increasingly more private because it is based on wallet accounts that are that are well just a public key just a string just a number and not a real user account um like like we are used to in web 2 where we populate our user accounts in each siloed application with with certain um identity traits starting with your email address going over your personal name and then even some other um credentials like your birth date or whatever whatever it is right and we don't we don't have that in web3 we just have wallets and they're they're inherently private so um fascinating

so essentially the way it works is like it depends what you use your wallet for and and what you connect it to you start creating an identity and and and and then based on the transaction what are the different touch points that allows you to create some sort of identity to Solana ID? So some sort of ID to a wallet. So the things I can think of is obviously the transactions you interact with. Number two is like what apps you interact with. And then number three would be what,

I forgot, I already said it, whatever it was, the third thing I said. Yeah, the things you mentioned, Mario, is basically on-chain metrics. So everything you do on-chain, which is one of two categories, because there's your on-chain persona, your footprint that you leave while you're navigating the Web3, right? You're logging into applications and you're executing transactions.

This is inherently or bottom line what you do on-chain. And this leaves a trait behind, right? And you can track that and it is public information. That is category one. Category two would be data that's not on-chain yet, that is part of your identity in the internet, but stored somewhere else off-chain, usually with Web2 application in some siloed data centers.

But that still makes up a big part of your identity and definitely the bigger part than your on-chain self. Now, with Stellan ID, we're trying to combine the two and bring more meaningful personas and more meaningful user profiles into Web3 by doing a sophisticated on-chain analysis of all the things you did on-chain. So we have a vast criteria set of more than 100 points

that we're tracking on-chain and keeping up to date on your wallet. And it's public data. And a very important point here that I'd like to make is that the big Web2 data conglomerates that we know, I feel like they kind of missed that train. And they didn't really understand because they're not Web3. They didn't really understand what this means. Like if we're moving in a stage of the internet where a lot of data is being produced publicly on chain and you're not tapping into that data as an advertiser, you're losing out on a huge potential market that's not existent yet really. And it's a new

concept as well. And you can actually see that google is not completely missing the train because at a certain point like i think a year ago or something or even less they started to implement a feature where you just type in a wallet address in google and you search for it similar to um if i type in what's the time right now in dubai i i get the i get an analysis of the wallet like in the top bar you know um hold on google sorry google allowed you to analyze a blockchain wallet like i mean if you if you just put in some some random at least it was a feature that used to be live i think it's it must be still live you can try it out um and if you just google that wallet account um then it used to just show you some uh some information on that wallet um maybe it's just

evm like there might be some restrictions or they even disabled it again, but there was definitely a feature that they shipped. I think it's probably EVM. Yeah. So where you at least you get you get some sort of data. So if you put in your EVM public key and you're in your browser and Google just Google search it, you will basically get like information. What chain this account is on and how much balance you're holding on that account like what's the balance of it in in eth and you probably have some sort of reference link to eth scan or something like this so they already have like some you know easier ui to analyze

wallet but that's like tip of the tip of the iceberg when it comes down to on-chain data and analysis of it and with solana id to kind of finish up that point we're trying to tap into that on-chain data, build that user profile, and then add off-chain credentials that are basically put into the game proactively by the user to enhance the data backpack he's carrying around Web3. And then he has the most sophisticated

on-chain profile, and all without doxing people. Fascinating. I'm actually going to try that out. You just have to Google the wallet, and then you see the results. Yeah, so just use an EVM. I don't know if it's working with Solana wallets. Yeah, I'll just do an EVM. Another thing that you guys do, which is really cool, is that you offer the wallet a score. How do you score a wallet? What does that score mean?

Yeah. So there's been other approaches before. We're not the first ones who are trying to do that. But it's basically trying to put something that's based on a huge data set into a human readable format that has a meaning. And our meaning is basically a rating of credibility, how we call it. So how credible is that user account, that wallet account? And what we mean by credibility is, okay, it should be human if it's credible. And how is this human contributing to applications and how is he using Web3, right? So a high credible account with a high, what we call solid score, Solana ID score, is an account that was active in the past years. It's an old wallet account that has constant activity and throughout different

various kind of d apps and then there are some other criteria sets in there like um the duration of holding assets the diversification of the assets you're holding um like is it someone that you know snipes tokens and dumps them immediately or if it's if it's more like a hardler it's like you can read out a lot of patterns from a wallet to then arrive at this credibility score, solid score. That's the first snapshot we're taking. And in future, we're planning to add a prediction element to it. For this, we need to refine an ML model that will learn how to predict future outcomes

from past behaviors. That gets also really interesting because then we can signal to the apps what kind of future behavior we can expect from certain wallet accounts. Fascinating. But then how, so with Google AdSense, when you analyze a certain IP address,

then you can target ads to that IP address. How do you target ads to a wallet? Yeah, that gets very tricky. And not going to lie, right? There's still some proof of concept to be done on that front, but we obviously have our ideas. So in Web3, you can do it, for example, at wallet login and show pop-up. So I'm using my wallet.

I navigate Web3. I log into an application. If that application is a display agent of an advertisement, they could add wallet login, query the Solana ID data backpack of this wallet, of the public key that just connected to the app, and then show a very highly targeted customized pop-up. And that pop-up really speaks to you as the user

who you logged into the account. And the goal of that pop-up really speaks to you as as the user who you logged into the account and the goal of that pop-up would be to either advertise directly to that app where you just logged in to kind of retain you and increase your your conversion rate the likelihood that you convert to be a paying customer of that app or it could be a display agent that acts as a third party displaying ads from someone else right from? From one of our advertisers. And then they could show you an offer from some exchange that reduces the trading fees for power traders, right? So you're identified as a power trader and you'll be able to get a discount

and get forwarded to that application. And then the display agent makes money on showing the ad, the same way it works in Web2. Fascinating. Now, I'm going to have a few questions for you afterwards about who your investors are, your token launch, etc. Just kind of the numbers. But before that, just another question on the applications.

Because again, I come from an e-com background. I know AdSense, I know Google AdWords. That's where I made money starting from. It's kind of my whole bread and butter is e-com. And I still have my first e-commerce brand still exists today so i still got some a bit hot in there um but the the um and that's ian i started it 12 years ago so um yeah so i i know the ebay days i know the google early days before adsense became you know i think the launch of adsense um but just another question i have is um another fascinating application.

Let me know if it's valid. It's like in-game advertising. So I think it's one I can easily relate to. It's like gamers, data on gamers will allow you to advertise to them certain in-game assets, certain games within the ecosystem in that gaming metaverse world. I think that one is really easy to relate to application yeah no definitely and like we're very bullish and on on web3 gaming in general like we've been bullish on it even when it was kind of boring and dead but i feel like it's waking up now at least i

can say that from you know being in the trenches and talking to the builders and investors as well like maybe you can confirm this but i feel like people are trying to to wake the narrative up again. And usually if they try hard enough, it happens. So we definitely circle around a lot of potential use cases with with games. We are already working with a few Solana games to basically help them find power gamers and find find real users and maybe even convert them from Web two to Web three. So and we started very early. One of our first partnerships was with the largest

e-sports community in Latin America, Fitchin. And Fitchin is a Web2 community of gamers, but the cool thing about them is they create an account of Strix and Solana wallet for each single user that creates an account with them. The user have no idea because they are Web2, right? But Fitchin was smart smart to say we want to be web 3 ready so all the um millions of fiction users have solana accounts and when we heard that

we were like okay guys we need to make some sort of collaboration because we want to be your portal to web 3 solana games so basically we do some amas with them there's going to be one tonight with star atlas actually um and then solana id should be the portal you know where you walk through as a web2 gamer to get some perks in web3 games so um that's really cool yeah yeah that's an first as everyone knows by now massive fan of web3 gaming i think it's an application that makes a lot of sense very relatable um what about your token like have you guys how much have you guys raised who are some of your investors do you have a token launch date yet yes so we do definitely focus a lot on everything around the token because we have the conviction that you need to do the token go to market right

it's only going to happen one time and for the product we have a lot of time after talking to build it so right now we we already have a proof of concept live. The product is being used. We have more than 10,000 people signed up to it, the priority pass. So that's cool. So right now we're really trying to focus on the token, go to market. We closed the pre-seed round just like two months ago,

maximum around the token and raised $250,000 in that round. So oversubscribed a little bit. We have one of our friends from germany blockchain founders group which is the vc um who gave the first tickets then a few angels from the solana ecosystem even some of my friends from from evm who are also building in in identity um my good friend billy from intuition a great great id builder he chipped in the angel round and then we have presto lab we have zk pass who are one of our tech providers for zk tech and they all chipped into the pre-seed um and then now we're raising the seed round and

we closed already 550k of that round just two weeks ago um through a what we call a community race with swissborg one of the larger european exchanges very bullish on swissborg and we sold out of pre-sale there in like a couple seconds um and then um basically that's 25 of our seed round and now i have a long list of um potential vcs that i'm talking to and i think in the next four to six weeks um we're gonna close the seed round as well and then we're pretty much ready uh for the for the token um to push it out on one or two launch paths they are technically already secured we just need to get everything ready for it um we're going to have a small public launch uh to give another opportunity to the community to buy in at a slight

slightly better valuation um then it's going to be later and then um we have the the listing coming up so this shall all happen this year, knock on wood. Yeah. Oh, wow. You think you'll be listing this year as well? Yeah, we want to get it over. Oh, wow. It's moving pretty fast. Yeah, everything is moving super fast. Why? Why?

Why the rush? Like a lot of people are waiting for next year just for the market to improve, especially for token launches. VC backing. Exactly. That's why we want to do it this year. We just don't want we don't want to be in the in the to be in the big mass of people launching the token at the same time. So we want to front run this opportunity a little bit and be a bit ahead of the curve. I think if all the projects are going to launch at the same time, I don't know if that's a good environment for all the altcoins.

I'm pretty bullish on Solana ID because we have a very unique spot. We already have a kind of a strong community and we also have very good momentum, which exchanges like as well. Plus, we are now doing a KOL round. We have two very good KOLs just secured last week that we're going to announce next week.

So a lot of things that help us with the listing and I'm confident that we can get it over with this year. Last question is how does the token work? So does it incentivize people to use Solana ID and then it allows them to own their data pretty much? Yeah, I mean, it is a model that has been tested, honestly, by my friends from Gitcoin already. They call it identity staking. We call it reputation staking.

It has a bit of different nuances in our application. But the essence is that you can stake or we call it lock your solid tokens to increase the reputation of your Solana ID account against better perks on chain. So you will get more value out of the Solana ecosystem by locking your tokens, because what you do is you're basically signaling that you're an honest person that is backing money behind your identity backpack. So the more money you lock behind your ID, the more perks you get on chain. So the higher the chances for airdrops, whitelistings, discounts and so on. So it's definitely a long term benefit value add for you to lock those tokens. And that creates some of the demand side kind of mechanics that will increase the demand for the token.

Nice. Well, first, I appreciate you having us on the cap table. Really keen on what you guys are building. I think it's a solution that the industry needs, or at least an application that makes sense for users. You seem to have a pretty solid team, pretty cool cap table as well, a lot of names that we know well. And yeah, man, I'm glad you're kind of avoiding the hype. I like your approach. Like, hey, we want to launch it now because there's no hype. We don't want to be

kind of put in the bucket with everybody else launching all at the same time. So I want to stand out. So it's good to see that.. I think the utility makes a lot of sense. So yeah, man, really happy to have you. I'm guessing you're going to be at Breakpoint, Solana Breakpoint in Singapore, yeah? Of course, yeah. I did all the events until now and right now I'm in Vietnam so I'm

just visiting some builders here and then I'm going to fly over to Singapore, meet my co-founder there and be there for the full week. Beautiful. Hit me up when you're there. And just for the audience, as you probably know, we're doing a pretty big side event in Singapore. A lot of surprises.

We haven't announced anything publicly. So if you want to meet us, hit us up. Just DM my account and the team could schedule you to come in and enjoy the parties. Otherwise, Simo, really good to have you, man. Thanks for joining. Everyone else, thanks a lot for joining. We'll see you again tomorrow, same time as always. Really appreciate it. If you want to check out Solana ID, just go on the icon,

the Solana ID icon on stage. Thanks a lot, everyone. We'll see you again tomorrow. Bye, everyone.