The Wolf Of All Streets - Elon Musk to PUMP DOGE to the MOON? Meme Coin Season | Crypto Town Hall

Episode Date: March 14, 2024

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Are you really here, Mario? Are you really here? I am. I'm sorry, man. No joke. I slept in 47 hours. I slept five, five and a half, and then pulled an all-nighter two days before that. Two all-nighters this week. Barely pulled any all-nighters in the last bull market. So this is another indicator that you can add to your metrics of how fast things are moving and how crazy this bull market is. Are you biohacking at all? I just had Raoul Paul on YouTube before this, and he said he has a video coming out or something about, I think the quote was, unfucking your life. And a huge part of it actually was health and wellness and biohacking. And I kind of joked that nobody's doing that right now in the bull market. Well, I skipped three days of bio three days of

biohacking this week it was unfathomable for me to skip a biohacking day even in the hate you know when i was going through that hate period what june last year the hit pieces i got even during the nbc hit pieces i didn't skip biohacking i was not in a good mood but i didn't skip them but yet this week three days missed but um i i i'm actually going to be listening more here it's like i'm becoming like a speaker but also an audience member in these spaces it's kind of get a recap of everything but if you don't mind me asking while the audience joins what was discussed this week how the etf inflows um what are some some kind of key snippets for the week if that's okay for the last i mean, the ETF inflows have been astounding.

I think now two days ago, it's hard to keep up with what days of the week, was the highest day over a billion in net inflows in a single day. BlackRock's now over 15 billion. Bitwise is now over 2 billion. VanEck, obviously, and we have Matthew here, so we can talk about that more. But VanEck has now waived fees effectively until March of 2025 or until they reach $1.5 billion AUM. And they're donating the proceeds to core contributors to Bitcoin. We've had a lot of movement.

But I mean, you know, listen, do we have the benefit of a lot of money flowing in, in combination with the price of Bitcoin rising? So obviously, the AUM of these just continuing to skyrocket. I mean, this, at this rate, I think Bitcoin ETFs will easily surpass the net AUM of gold ETFs in the not so distant future. I don't think anyone was expecting this. We kind of joked that Bitwise being at $2 billion, I was talking to Matt Hogan about, is more than probably people expected BlackRock to have six months in, much less two months in, and BlackRock's over 15. So I think we know, obviously, what's fundamentally driving the market. And when we see dips, it's pretty clear that it's leverage getting rinsed. You get a dip, the fundamental spot buying underlying the ETF demand pushes it right back up, right? So every dip getting bought up very, very quickly in the spot market.

Otherwise, I think, you know, as much as I begrudgingly admit it, it's been massive meme coin season. I mean, when I'm having conversations with Raoul Paul about Dog With Hat, you know that the market's a little bit different than it has been in the past. And, you know, you and I, we did that full two-hour meme coin space, I think, on Monday, which was our longest spaces that we've done in quite a long time. So clearly, that's an indicator of what's happening in this market. And I think that, you know, whether intentional or not,

the founders and whales in each of these chains and layer ones are realizing that the real way right now to bring attention in AUM is to just pump the shit out of meme coins on their chains, right? And you could make a value judgment as to whether that's rational or right or not. But I think that's effectively what's happening.

You know, it sort of starts the flywheel and interest in each of these chains. And so you're getting these these meme coins all over the place. Franklin Templeton yesterday put out literally a paper. I would talk about Franklin Templeton, one of the larger financial institutions in the world, about exactly that meme coins and their relationship with the native chains so a lot i think the narratives right now are at the polar opposites we've got the full-scale institutional adoption slowly trickling in on the etf side and then we have the crypto degenerates just having an absolute casino fiesta with meme coins on the other side. And the inflows today, yesterday, sorry, 683 million.

Right. Which is the second biggest day, right? So two days ago it was a billion and the previous biggest, I think was 630 ish. And so yesterday, 680 is still the second biggest day we've had. Right. So, I mean, it's just pretty astounding numbers here, especially when you consider how few platforms have been unlocked. I saw Eric Balchunas. I don't have the tweet in front of me. I think it's in our news group, actually. But he basically said that to understand that most people do not have access to these. There's Bloomberg Senior ETF Analyst Eric Balchunas said that Bitcoin ETFs has not yet appeared on any important

offline asset management platforms. These platforms manage approximately $7 to $10 trillion and are expected to list Bitcoin ETF in the next few months. Additionally, Bitcoin ETF options trading is expected to be launched by September. So we've really gotten to this point without this even being accessible to the biggest platforms and without even having the extra sort of liquidity and interest from options trading, it's pretty astounding. Yeah, I'm just going through the news for the day. And two more questions, and then I'll obviously go to the panel. We've got Matthew here and Joe and Alex and others. But two more questions for you, Scott.

Have you discussed this week about the narrative, the debate, and whether this bull market will be shorter than others considering how fast things are moving? I talked to Raoul about that this morning. Yeah, go ahead. And what did he say on that one? He said his inclination is towards no. He's kind of prepared for both. I think a lot of people, it's my take as well.

We have PTSD from the previous market, and because we're already hitting all-time highs in advance of the having now, that's scaring people into thinking it'll be a shorter market. I don't see any rational reason for that. I mean, it could happen, but I don't think that simply reaching an all-time high before the having is justification for that position. mean it could happen but i don't think that simply reaching an all-time high before the having is justification for that position and frankly i think that uh things are just getting started i

mean we both agreed that if you know gun to your head we would think odds percentage chance that this is a bigger bubble than the past and not a shorter shorter cycle than the past okay and then the second one is there was a report that was mentioned in one of our spaces that we're 30% in, 30 to 40% into when the bull market started? Right. Was it from the bottom? I mean, a lot of people say the bull market starts the minute the bottom is in. I disagree with that. You know what I mean? And so, uh, but rationally, I think you do get a major uptick kind of coming into the having, and then things go nuts for the next year to 18 months after that. So I guess that could potentially align. I don't know. I mean, you never say this time it's different because as Jesse talked about, it's the most dangerous

words in investing, but we do have at least cyclically, we are ahead of schedule. So that's hard for me to address. Maybe others have have a i think you should probably go to the panel and and see what they think about these things yeah sure i think so um i we've been um on my end we've been pretty uh um you know we'll be better keeping up and everyone will speak to every vc we speak to is just astounded as how fast things are moving i just don't know how sustainable it is i don't know how this can be sustainable. It's terrifying. I keep saying that like bull markets are scarier than bear markets for most people, because you have to actually be active. And you have that fear of sort of a, which you shouldn't be concerned with catching the top of missing the top of

whatever it is. But like you and I both know, because you're, we work together, right? I mean, the amount of introductions I made to that are made to new projects on a daily basis now, I think is double to triple the peak of 2021, personally. I don't know if you agree with that, but that's what I think. I think it's insane right now behind the scenes. Alex, Jeff, go ahead. Yeah, I was going to say, so for context, we're in a developer tools company in the Bitcoin ecosystem and Bitcoin layers and like the uh that we've seen across not just like the chains that we build on but across the board has been driven by meme coins but it also feels

it feels more concentrated to me than it did back in 2021 and i don't know scott if that resonates for you but like it's there's there's more trading going on but among a slightly smaller group of people. I'll also definitely agree. We expected Bitcoin to take a lot longer to get back up to the all-time high. I was thinking if you'd asked me six or 12 months ago, I would have said it was Q3 or Q4 of 24, not Q1. And so, yeah, I definitely feel the like you're, you're on this little bit of this rickety rocket ship shooting up and it's like, okay, how, yeah. What, how, how fast are we going to burn this one out? But I think the actual,

like I'd define the bull run starting, you know, maybe late last year, definitely not like the bottom of the depth. Yeah. I agree. And to your point uh we've been saying this this is the narrative we've been saying quite often on this show at least one that i've been formulating the meme coin this meme coin cycle is not bringing in any new people right to your point when you say it's very concentrated it's the same old dj's who have been here for every cycle just uh finding ways to make a whole ton of money within this ecosystem. But I don't think that... Listen, people seem to already forget how insane the peak was of Doge and NFTs,

and even SHIB, or down from there. But we had NFTs on Saturday Night Live. You had Elon Musk on Saturday Night Live talking about Dogecoin. It was up at 70-something cents. I don't think at this point, as sad as it to say cents i don't think main at this point as sad as it to say we don't have mainstream here with bitcoin reaching new all-time highs i literally think at this point it's in the title that doge has to reach an all-time high for all and nfts for all those people who are still underwater and hate this market to start to gain interest again because that's where everybody came in 100 and this And this is the thing that sort of is giving me, I guess, a little bit of optimism about the potential length of the cycle. And again, I hate to say that because the last thing I want to do is like jinx it and ruin this all.

But it is, you know, I think a lot of the Bitcoin action is driven much more by the institutional stuff than, say, you know, the meme coin action, even though a fair chunk of the meme coin stuff is getting built on Bitcoin. But yeah, this is all just still the same degen guys having fun, swapping stuff around. This is not yet anywhere near like 21, where these price appreciations were being driven by a bunch of retail money pouring in because they were stuck at home board. Millions of people were trying to buy Dogecoin to the point where exchanges couldn't even onboard them fast enough. We have seen nothing of that sort right now. Jeff, go ahead. Hey there. Jeff Park, head of alpha strategies at Bitwise. I was actually going to comment a little bit on what you were sharing around whether we're 30% to bull market or not. But I actually have some thoughts on the meme coin trading as well.

You know, I do think there is actually a little bit of a difference in this cycle versus 2021. And while there's not a lot of new capital coming in, I would suspect there actually is more new capital coming in as an on-ramp than the prior. And because I think there are some fundamental changes in that opportunity. So, for example, part of the old schematics around mean coin trading was you had to find easy way, cheap ways to do it. And the exchanges had gated a lot of those opportunities. So you had to kind of wait for Doge or whatever to be available for folks to access cheaply because no one would want to do these things on-chain. But the advent of Solana and the infrastructure around Solana in which it's so

incredibly easy, cheap, and low latency, and people being able to access this market is, I think, fundamentally a little different. And so while I agree, most of the money sloshing around is still the same pool. Anecdotally, I think you guys are all hearing the same. Some folks are not coming into crypto through the lens of Bitcoin and ETH. They're actually coming through the on-ramp of Solana. And that is a little bit different. I agree with you. That was my point. I think, you know, as much as we thought people were coming for Bitcoin and ETH, even last cycle, when you look at it, they were coming

through NFTs and Doge, right? I mean, and NBA Top Shot, people tend to forget about. It was bigger than any of it, right? At that time, I mean, NBA Top Shot was absolutely massive. It was on a gated flow blockchain. None of those people even knew really about ETH, even if they were, you know, some of them had to buy or sell with ETH. And I think you just made, I never even thought about what you just said, but it's so incredibly true. But I would take it a step further. So the fact that this is available cheap and easily on chain, it's huge, but I still don't think mainstream's here. So now you've got to consider that they won't have to wait to sign up for exchanges. They'll literally just have to take that leap. And it will, I, that, that lends me to the more bigger, bigger bubble theory. Because people aren't going to have to wait three months to get onboarded to Robin hood or, orance to buy Doge.

They just go do it or whatever it is. Right. Yeah. And now you got Jupiter Exchange, which is such a seamless experience versus Uniswap. You got Bananabot and all kinds of other things that retail can leverage in ways that hasn't existed before. So I think that's right. Yeah, and they don't even know about it yet. Yeah, that's a great take. That really makes me kind of rethink the core of my thesis because you just don't need to wait for Coinbase anymore

to list your ridiculous meme coin. By the way, I don't know if people saw, but Coinbase actually had a page up about Elizabeth Warren. They took it down, but there was like a how to buy Elizabeth Warren page apparently on Coinbase, which I actually spit water out of my nose when I saw that news. Keep in mind what that is, is that Coinbase like auto generates the exact same. Oh, I'm not saying that Brian Armstrong made a call and was like,

get Elizabeth Horan up now, right? They obviously took it down, but I was just dying that that was a thing. It's the ultimate accidental automated troll. Matthew, I saw you had your hand up. Go ahead. Yeah. On the question around whether this cycle is abbreviated at the risk of joining consensus here, I think there's a legitimate case that last cycle was aborted prematurely because of the GBTC structure. And when it flipped from premium to discount, created a whole bunch of deleveraging across the space. And that discount was caused by

regulation, right? Biden executive order, right when he took office, instructing every agency to employ maximum enforcement. Now we're in the exact opposite where these ETFs are available, the options on them are likely coming. It's an additional source of leverage. We're starting from very low levels. So from our perspective, Jan was on CNBC yesterday. He said that in the year of the halving, we expect multiple 20 percent drawdowns and those are by the dip, most likely by the dip opportunities. So that's our take. I think we're kind of adding fuel to the fire by waiving the entire sponsor fee of HODL on the first one1.5 billion until March 31st, 2025. So, anything over the $1.5 billion will be charged a sponsor fee of 20 bps, which is still among the lowest in the industry. And then once we get over the $1.5 billion, all the shareholders will incur the same fee, which will be the weighted average of those fee rates. So we've seen more than 200

million in inflows since that announcement. Thank you very much for the vote of confidence. Just the other comment I'd make looking at the tape right now, yesterday, Ethereum's broadband moment arrived, and it turned out to be a sell the news event for layer twos. If you remember, you know, 20, 25 years ago, the arrival of broadband in the early 2000s, basically 10x consumer grade internet. And that is what has happened with Ethereum and impossible ideas were realized into billion dollar dot com powerhouses, notably YouTube, which still took several years post that arrival of broadband to catalyze their growth. So we've been on chain for the last 24 hours.

Optimism and base fees are down to a fraction of an American penny per transaction compared to nearly a dollar before the fork. Users are starting to inscribe fun and random data like Jerry Seinfeld's B-movie, which has become an Internet meme. I expect we're going to see more such inscriptions. And we're seeing a nice pickup day over day in active addresses across many L2s and dApps. But if you look at the tape, OP down 7%, Arbitrum down, the market's pricing in that these L2s are still going to be an extremely competitive market. No winner-take-all dynamics have emerged yet. But watching those underperformers as a potential opportunity, I noticed that Robinhood is up 10% the last couple of days on a

bullish initiation from Bernstein. Robinhood's going to have an L2 on Arbitrum. So, I just want people to be aware, broadband moment for Ethereum, the transactions have picked up, market's not taking it so well at the moment. Yeah, and I love how quiet it's been, right? I mean, we've been talking about Dancun upgrade here for quite a while. Even the merge itself was sort of quiet. And to me, it just means that we have this opportunity with a laggard ecosystem that is not getting its fair shake. I mean, Matthew, I see you giving the thumbs up and agree. I've been saying this now for a year probably. So

maybe one day I'll eventually be right. But I'm still exceptionally bullish on Ethereum and the ecosystem. Doesn't mean I'm not bullish on the others. I love what's being built on Bitcoin. I think Solana is incredible. I just think Ethereum is not getting the attention that it deserves. And I will enjoy continuing to buy it while that's the case. I mean, Matthew, is that sort of your base case as well there? Yeah, I mean, the amount of tokens kind of yet to be minted on some of these L2s is, you know, definitely very high. And I think if you look at the performance year to date, it's the tokens that are kind of fully issued that have

smaller drawdowns when the tape is weak. At some point, I expect that to flip. I'm not saying like today's the day that you go all in on L2s, but on the margin, each day that BTC holds up and we get closer and then beyond the halving, the greater probability that you get some of these high beta, lower float coins begin to mean revert and rip. Yeah, I totally agree. Joe, you heard what Matthew had to say sort of about the previous cycle and the, I guess, the regulatory, the beginning of a regulatory crackdown towards the top and this time having more regulatory clarity, at least with Bitcoin and the spot ETF. Does that align with your thinking as well that, you know, this time it could be a bit different because we have a bit more clarity, at least for part of the market? Yeah, I mean, I don't know if we have necessarily more clarity, considering the litigation that's still pending. I still think there's a lot of murky areas. I, you know, a lot of this stuff, you have to have to draw a distinction between correlation causation. I think that the cycle last time in 2021 was muted for a variety of factors, most notably the China mining ban, which really disrupted us in the

middle of it and took some time off the clock in terms of getting back to the all-time high. In addition, I think you can't just completely ignore the macroeconomic conditions both today and then, you know, where you had the Fed beginning a rate hiking cycle, virtually all risk assets peaked in Q3, Q4 of 2021, and then sold off from there as you had the stabilization in the bond market. And I think the most encouraging thing, if you're in looking at this from just more of a macro standpoint, which you and I may disagree on this about the effect that macro has, I think you're seeing signs in the economy of re-acceleration. I mean, look at the ISM numbers, look at the senior loan officer survey, both show an easing of credit conditions and re-acceleration of the economy. There's some data in the housing market that also shows re-acceleration. The leading

economic indicators index also shows re-acceleration. I mean, across the board, you see consistent signs of not slowing of the economy, but just the opposite, that things might begin to rip and you might have a trough across the board, both in servicing and manufacturing. So to me, you know, that extends itself to crypto, right? Like crypto as a whole is going to do very well if the economy as a whole begins to reaccelerate. And that's like the most important thing I think you should take away from what we've seen over the last several months. And it's consistent with the message from the trad fly markets where, you know, it seems like almost every day you're making a new all time high in the NASDAQ or the S&P 500. So to me,

like, I think these things are tied. They're not obviously there's idiosyncratic issues with the larger, you know, crypto market and what is really selling, what is able to. Some of the structural issues, I totally agree about meme coins and how easy it is now not to have to wait for the gates to be open on exchanges. That's a very savvy comment. And I think it is being borne out in the price action. But do not dismiss the fact that if you're going into a year here with a re-accelerating economy, that in some ways you could make an argument looks a heck of a lot like 2017 rather than 2018. That's going to be really positive. Yeah, Joe, I don't disagree, by the way.

You know, I sort of push back generally at the direct correlation between the crypto market and others when we've had this discussion in the past. But I think that like the context of what's happening with, in the context of macro is exceptionally important, right? If we were in the depths of a crypto of a macro bear market right now, there's no way that crypto would be doing what it is. So I a hundred percent agree with you there. And so I think if it accelerates, in my opinion, it's just another major tailwind for crypto coming into this part of the cycle. So yeah, I do agree with you. And I just think...

Let me just ask Joe a question, because I think that Bitcoin's negative correlation with real interest rates during 2022 surprised a lot of people. I know it surprised BlackRock and may have delayed their plans to bring the ETF to market in the first place. And I just wonder what your thesis is, if inflation reaccelerates, because last cycle, policymakers used rising inflation as an excuse to tighten controls. You know, of course, there was the Russian war going on and the sanctions. But it's that kind of tightening of capital controls that I think hurt Bitcoin. And it went alongside more regulatory scrutiny. I just saw something on the tape that the Fed may look to delay its interest rate cuts because of the rising price of Bitcoin.

You know, that seems to be maybe, I don't know, just an excuse. But what's your thesis that real interest rates and BTC can decouple if we get reacceleration? No, I don't think they decouple. I think that's exactly right. I mean, from my standpoint, I think you're in a range with sticky higher inflation. OK, the question is, what is the rate of change? And are you going to get back to 8 percent annualized? I don't really believe that. I think you're more likely to sort of stay in this higher band that if you go back and look at what the Fed was going to say, was saying in late 2021, their commentary was we're going to let inflation run hot, right? It's transitory, but we're going to let it run hot for some period of time

to bolster economic growth coming out of the pandemic. So from my standpoint, what I think that they're sort of returning to their original mission, which is we really know we're not going to say it because of causing turmoil, but we really know it's going to be very challenging with demographics and other issues and labor shortages, et cetera, problems with services that we're going to have. It's going to be difficult to get it back down to two, but we can let it run a lot closer to three than perhaps people expect. And I, for one, completely discount this notion of cuts.

I don't think the cuts are coming anytime soon. I think that they will continue to be priced out as they've been priced out for the last year. And what you end up with is a market that has higher trend inflation, that has asset prices actually benefit from that. And there's historical parallels for that, both stocks and Bitcoin. And from as long as you don't see that the reacceleration that's akin to the 2022 type inflation we were printing, then I think you're fine. I think assets do quite well in that environment. Yeah, I was gonna say, I was gonna bring up that same report, like from JPMC or whatever, that they're gonna not cut rates, because Bitcoin has gone up too much. And I'm

like, yeah, it's definitely has nothing to do with the fact that inflation has basically stopped falling for the last six or eight months. But of course, there are people out there already trying to shift the narrative that it's Bitcoin's fault that they're not going to cut rates. It's always Bitcoin's fault, Alex. It's always Bitcoin's fault. I mean, when it comes to the macro, I still, it blows my mind every single time I see someone make a bold prediction about impending rate cuts. People might forget a year ago this time, we were supposed to have seen three to four rate cuts in 2023.

That's what predictive markets were saying with overwhelming confidence. And Powell's never changed his tone. The Fed governors are more in line, I would say, even now with Powell. And there's literally, unless something's broken behind the scenes, or unless they want to sort of interfere with fiscal policy rather than monetary because of the debt being, you know, coming due and needing to refinance, there's literally no reason for the Fed to cut. I still, I mean, Joe, you obviously are re-accelerating. You believe that we could see inflation re-accelerating.

You just said, at this point, if I was looking at it blind and not looking at predictive markets, I would think there's an equal chance of a rate hike in this year as a rate cut. Yeah. Or just staying, I mean, he says- Or just pause forever. He says it's sufficiently restrictive, right? That's it. That's the common, you know, talking point around. He says rates are restrictive. Well, if that's true, okay. Why are, why are credit conditions by the senior loan officer survey? Why are they easing? Why is credit being provided at a better clip than it was this point last year? That tells you something. I don't think they're restrictive at all. I think you can make the argument right here that they're still too low, but it doesn't matter. I mean, from an investment standpoint, you can't invest on that. I think what the key thing is, are you seeing economic deterioration in businesses and individuals like getting laid off? You're not seeing that. I mean, the unemployment conditions look really good. So why would you cut? Yeah, why would you cut? Yeah, yeah, you can keep the rates here. I mean, and I bet I think QT

continues, but that's really immaterial. I mean, what needs to occur, I think, for Bitcoin to do exceptionally well in this environment is you don't necessarily need cuts. You need stability, right? If the Fed came out and started saying, well, now we're going to have to go back into more aggressive QT and we're going to have to hike again, that would cause a lot of turmoil. But I don't think they're going to do that, Scott. That seems like in the election year and everything else, it seems very unlikely. So I agree. I think this is the early, early days of the bull market. I think we've got a long road ahead of us. And I think the appetite out there is still very hesitant. And that just tells me that's not a market top. I still hear a lot of

bearish positioning all the time, always trying to call a top on every asset class. And it just seems misguided. Yeah, there's I mean, there's no guarantees that any of these cycles or the history repeats itself. But almost every single time you have the yield curve normalizing, then you have the Fed pivot, then you have the stock market crash. I don't know why people are so excited this time about a Fed pivot and cuts, but usually cuts come when something breaks and they need to fix it. And that's usually preemptive of a stock market crash. So I wouldn't even be that excited about cuts if people think they're coming. Hey, Scott, one other thing to think about just in terms of where we're at, everybody keeps parroting about this all-time high,

and you have to remember that it's not the real all-time high if you adjust for inflation. We should be, I think some metrics- 79. Yeah. Yeah. It should be higher, right? So don't let that skew you, right? In prior cycles, you had much lower rates of inflation annualized. So when you actually made a new all-time high, it meant something here. It wasn't as big of a difference between nominal and real. Here, it's a big difference, right? Because we've had the hottest inflation in 40 years in the last couple of years. That's pretty wild to think about, Jeff. Yeah. If we're going to talk about rates and Bitcoin, we almost have to talk about

microstrategy because that sits in a really interesting intersection of the dynamics of player. You guys have seen the news around the new shelf that he's putting through another 500 million. And these converts are like less than a percent in coupon and already trading like 40 points up. And that is like one of the most complex yet fascinating financial box that intersects what could, to some people, also appear to be some form of speculative investing, just more mainstream, because they tend to be tracking real traditional assets that's trafficked by Wall Street. But if you look at MicroStrategy, the beta that we've seen that change from what used to be around one and a half to now over three, last year is really even over, that number is profound.

And if there's anything that's going to maybe give the critics a little bit of that heat, maybe it's going to be this micro strategy story. It's a really fascinating one to watch because the whole spectrum of option vol, credit, crypto beta all come into play in this one instrument. Jeff, do you think you could break that down for the layman? Because I don't want to take for granted that the thousands of people here understand kind of what you just said. Maybe you can just sort of simplify what MicroStrategy is doing and why it's so sort of complex and important. Yeah, sure. So MicroStrategy

is essentially a vehicle for Saylor to have accumulated Bitcoin at incredible financial engineering because he's able to place debt at levels that give you the ability to lever up on your Bitcoin holding. So people have liked MicroStrategy because it gives you levered Bitcoin exposure. If you think about that debt layer, the debt layer is not huge, but it is growing live. And so the idea is that there's going to be more leverage to this holding vehicle. And there's a little bit of an arbitrage here because if the stock price keeps going up at a level above its NAV of the Bitcoin holding, then presumably you can dilute that equity as well and actually do secondaries on it where you can protect this box. So you're caught in this infinite reflexive fundraising vehicle if Bitcoin continues to go up. And it's really clever in some ways. Now, the question is, this convertible instrument trades options on MicroStrategy. That option has to have some correlation to Bitcoin volatility.

But the levels we're seeing right now, it's very detached. So at the last time I checked, the implied volatility on MicroStrategy was something like 150%. And then that's nowhere near even Bitcoin's vol, implying a 10% daily move, essentially, including the leverage. So I think there are some opportunities for folks to think about trading that arbitrage where the implied volatility might be mispriced, or you may take the view that the bonds are cheap and trade some capital structure arbitrage. But the point I was trying to make was maybe even going back to original convo on meme coin trading, people can take a little judgmental view

on that being speculative. And I look at microstrategy kind of also in that spectrum in the middle ground where it's not totally clean like a Bitcoin long beta proxy, but it is some kind of speculative financial engineering

that is happening here that all the legitimate players of Wall Street are touching from the broker dealers that are putting the convert placements to all the institutional buyers that are trading it and hedging it as well. I think the summary is it's really complicated and maybe lay people won't understand it, to be quite frank. I think also maybe the summary is that there's appetite for this debt, right? Coinbase just did a billion dollar convert. They upsized it this morning. I confess to hanging out in some of the Bloomberg Terminal anonymous persistent chat rooms and have noticed more fixed income investors looking for Bitcoin exposure.

There's a real shortage of issues that you can trade. There's Coinbase, like a strategy. A couple of Bitcoin miners have debt, but they're very thinly traded. So I think there's just demand from every asset class and the Coinbase issue also affirms that. Yeah. But why is there demand for debt, Matthew, the most simple terms? Because professional money managers have benchmarks that they want to be. And if it's a fixed income benchmark and you can eke out some excess returns by dabbling in some Bitcoin related fixed income instrument, uh, the PMs will do it.

Just another creative way to gain exposure within whatever bucket they're basically committed to trading or, you know, wherever their mandate is and whatever numbers they need to hit. I mean, it makes a lot of sense. And I think Saylor's exceptionally savvy. Can I ask you then the question, which I don't think will happen, but what would happen to something like that if we saw 50% relatively quick correction in Bitcoin? I'm not, by the way, saying this, I'm just saying in theoretical, obviously, these things all sound amazing on the upside. I support what Saylor's doing, but the GBTC premium also seemed amazing on the upside and like it would never end.

And as you said, it completely like handicapped the last cycle. So, you know, can any of these things end up being harbingers of a shorter cycle if things go really bad, really fast. I think it's certainly a possibility, but if you just look at the aggregate amount of debt in the system and consider that most centralized lenders went bankrupt and few new entrants have come online, the bigger issue is a shortage of dollar capital into the space. And your concerns are something worth monitoring as the cycle progresses. I just think we're too early to worry about that. Oh, that, that Matthew, that begs the next question. You just made a great point. There's no new CFI.

There's no new BlockFi. There's no new Celsius. There's no new Voyager. Will there be, or is that just, there's the downside risk of even trying to create one of those platforms is prohibitive. Are we going to see C5 make a resurgence if this market goes absolutely nuts? We've seen a few, a few announcements, uh, like Nomura, Laser Digital, their custodian there in the business. Um, you know,

there's been some trickling out of announcements, just not big tickets that I've seen. Right. And those are from well-established financial institutions and not from startups. Right. I mean, which you could argue any of these were initially.

Yeah. A little of both. A little bit. Interesting. Interesting. Uh, cause, uh,

it's just easy to get caught up in the, all of these things are amazing in the bull market mentality and forget the lessons of the past when levering up goes bad. Right. I mean, Joe, does any of this concern you when you listen to it? I'm sorry, I missed the question. I was asking if any of this concerns you when we talk about, you know, Coinbase is a, that talk about, you know, Coinbase is their, you know, billion dollar note that now they've up to upsize. And of course, you know, MicroStrategy, 800 million and 500 million the same week.

It seems like they were getting that appetite for creative leverage. I think we might have lost Joe there. I don't know if anyone else has a thought. Actually, I see. I just saw Amateo request. I'm bringing you up. Amateo, obviously, we work together. When Voyager was early, one of my sponsors, unfortunately, he was a chief of marketing there, but I'm not sure if he's up on stage yet. Amateo, can you hear me yet?

Guess not. Well, I don't know if we're having some connection issues. Zach, I mean, listen, you're a lawyer. Do you take a look at any of this and think that we might be flying in the face of regulation or there might be some risk here? I mean, I'm definitely much more worried about the actual regulatory risk than at least the leverage we've seen so far. I mean, I think micro strategies, liquidation prices, like so far below

here, that doesn't seem like a problem. Coinbase is a publicly traded company that has a healthy balance sheet. I don't see that leverage as, you know, the same type of problem that we had with like the FTX Alameda bucket shop self-dealing last cycle. But, you know, I think the outstanding cases against Coinbase and Binance and Kraken could be, you know, more of an analog to what we saw with the China mining ban last cycle. And that is something that even if macro conditions are good, could really interrupt a bull run if all of a sudden you have a credible ruling by a US federal court that 90% of tokens are likely illegal security. Yeah. It's amazing how we, you know, the ripple decision and just the kind of SEC steady losses has given people this maybe false safety blanket that everything's indefinitely. Okay. Yeah.

Yeah. That's an interesting point because like talking to people, the consensus does seem to be that the judge is going to throw out part or all of the SEC suit versus Coinbase. But then when you look at the polymarket odds on spot Ethereum ETFs getting approved, they're now 30%. So I think that divergence is kind of interesting. And you don't hear that on Coinbase from any actual lawyers, right? I think that's a Twitter meme. That's true. But we have not had a lawyer come on here yet that say it's going to be thrown out. Even the ones who went and sat there in court, what was it a month or two months ago? Like all the crypto lawyers got together

and went and sat in court and all of them thought that this doesn't get thrown out probably. Zach, I mean, is that correct? I would put like, look, I'm not an or I would put 80% plus odds Coinbase loses the case, at least on some of this stuff. Yeah. So there's a secondary sale. None of these things are investment contracts. Right. But if it just the secondary sale gets dismissed, if just the secondary sale portion gets dismissed,

that may be enough. I mean, that would be huge, but that's really mostly what the Coinbase case is about, the secondary sales on Coinbase. I just don't think we have any indication that the way this is going to shake out in federal court is that no secondary sales are securities offerings. That timeline for that is still quite long, right? So we could have this situation where we just ride this narrative and sentiment that it's all fine through what would normally be the cycle before we get any

sort of clarity on that anyway. That's entirely possible. I'll cheer for that one. But by the way, we've never even talked about the topic ahead, Elon Musk to pump Doge to the moon. I don't know if you guys saw the news story, but Elon Musk sort of passively in his own factory apparently said that he intends to likely make Doge a payment option for Teslas. We're back. Mario, are we back or are we so back? This is whenever you sit there shitting on meme coins, you've got the richest man on the planet telling you that meme coins could start as a meme and become a community. And again, I'm the person that invested in this first meme coin like three days ago. And when you were on the space when that happened. So I think that,

and again, Elon, the first thing Elon's ever said when he came on my space is the first, first time was doge to the moon so um i mean literally that was like you you like out of context right he just showed up and turned on his mic and said doge to the moon yeah that was the first place he ever comes on as well so probably was awkward for him didn't know how to what to say he just goes oh it was about ftx so probably relevant to the audience as well and he goes doge to the moon so um yeah yeah whether he's serious on whether this is going to be a payment option or not um yeah i don't know pico he's a bit vague about it but also i mean i think

i i think we could put those in a different bucket than the meme coin frenzy that we're seeing now as well personally yeah but it started you know yeah but yeah i agree i think it's like the bitcoin of meme coins it's kind of decoupling for the rest of the meme coins that's right like i woke up this morning and saw my twitter feed i had seen it yesterday but like it really struck me the idea that the dog with hat people have raised enough money to put the dog with the hat on the las vegas sphere like it really just feels like that's saying something profound about where we are socially economically something but like that really does feel like a sign of the times and even different than like the mania we saw last cycle where you know it's ftx arena and crypto.com stadium and everything like the idea that it is like ground

up meme coin communities without the pretense of this is the future of finance. It's just, it's a meme on the sphere. Like that seems like something that the history books will point to as that's where we are right now. Yeah. And I like, yeah. And even someone who's so like dismissive of meme coins, just because I think that it can be damaging regulatory or to the space or whatever. I totally agree with that and i think the context here is different for the exact reason that that you just sort of articulated and i mean i i was talking with ralph paul this morning he said that exact same thing about the sphere and then he also said which i wasn't aware of that i guess the dogecoin foundation is has something to do with

sending something a rocket sponsoring a rocket. It's going into space and literally sending Dogecoin to the moon. So, yeah, right. That's not Sam Bankman-Fried stealing your money to put it on Arena to market crypto. That's really groundswell of community and money coming from that community to just do wild things and make a statement. It's more like the GameStop movement. If you had to look... I think that this is, I think how's that going to be remembered?

I think this is, and not just for crypto, GameStop as well. And what we saw, I think it's, it's people's anger and frustration manifesting in, you know, it can come out as a joke, but I think that it's the groundswell of people pushing back against a system that's broken it's sort of i i would get like murdered i'm sure by by bitcoin you're saying this but it's sort of like the original ethos whether misplaced or not of bitcoin being a way to opt out and i think these people are trying to find a way to

out of the system whether that's misdirected or not i can't say but i think it's a like you said it's a sign of the times and really just uh i mean the sphere it's a literal billboard that like we don't give a shit about your system right i don't know if you agree but that's what it feels like yeah i totally i i mean if i had to guess how this will be remembered once we have like a lot of distance between now and then it will be like all of the people who insisted that everything is fine and keep gaslighting the economy is actually really good and everyone's just stupid for questioning it it's like there was a fucking dog with hat on the las vegas sphere like all of the warning signs were flashing red

and how did you not see that like the system was breaking in some fundamental way? Even if we're sitting where we are right now, it's hard to see exactly how it is going to break.