The Wolf Of All Streets - Insane BTC Volatility. What Happened Yesterday? | Crypto Town Hall

Episode Date: December 6, 2024

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Good morning, everybody. Happy Friday. What an eventful day yesterday was. Bitcoin currently sitting at a price of $98,944, but depending on the exchange that you look at, was as low as almost $90,000 yesterday, as high as roughly $104,000, anywhere from a $12,000 to $14,000 single day candle spread. Absolute insanity what volatility can do at $100,000 Bitcoin. I believe there was a five minute candle that went roughly from $98,000 to $92,000. Absolutely insane volatility for any who thought that volatility would be dampened with higher prices, that whales couldn't move this market around. But here we are right back at $99,000. I don't have the final numbers on liquidations yesterday, but I saw numbers as

high as $2 and $2.5 billion in liquidations. Be careful with leverage out there, kids. Dave, I'm very glad that you are here because you kind of unpacked this in a thread you and I have discussed. I can't even count how many times what happens in these leverage and liquidation cascades. Probably worth explaining here again, how the spot market and perp market sort of interact and why this can happen and why this isn't some huge fundamental selling event. Yeah, I mean, it's actually a huge fundamental buying event, but that's a different story. We'll get to why in a second. I just want to make it clear that if you go back to the summer post when we were still bopping around below 30,000 And there was one of these that I wrote up about and did a video on

from a little over 29,000 down to 26, but it hit as low as 24. In percentage terms, this was actually smaller, but the prices tripled. So obviously the numbers are bigger. It was a very typical liquidation cascade. So effectively, what we're talking about here is something that has happened in many financial markets over the years. The most big obvious one was Japan, when the futures markets in Japan were 4x the liquidity of the spot markets. And you saw what got commonly referred to as liquidity arbitrage. So here's the deal. You can slowly, over a long period of time, amass a position that is long, spot, short, perpetual swaps. You can do so, especially in periods of time when the market is moving higher in leverage and funding rates are

going higher, do so profitably, i.e. be paid to put this position on. Because what was happening by yesterday at one point, instead of 0.01-ish funding rates, which more or less translates into, I mean, it's more than the risk-free rate because people have more reason to borrow crypto than not, but still relatively inexpensive, it was as high as 0.1. So it was 10x the normal funding rate. What that translates to is being paid significant interest rates in order to be on the short side of the position if you're on a swap. So now imagine that you accumulate a lot of long Bitcoin on spot market and a lot of short perpetual swap. And so it's a balanced position. As long as you're hedged,

you don't make or lose money. Then you wait until a period of time when the market is less liquid. So let's say right after the US market closes, the futures have just, the CME futures have just stopped trading. Most of the US-based traders are in the, well, it'd be the bar. I always think the UK in the pub. And Asia has yet to wake up. So you pick that time of day and you say, well, it would be the bar. I always think like the UK in the pub. And Asia has yet to wake up. So you pick that time of day and you say, okay, look out below. And you then turn around and dump your long spot position on exchanges where there just isn't enough buy interest and you start pushing the price down. Well, as soon as that happens, the liquidation engines on the swap markets kick in. And all those, I don't want to say morons, but unfortunately, I think that if you're trading Bitcoin on more than 20 to 1 leverage, you probably are a moron.

You certainly are not an investor or trader or speculator. You are literally looking for lottery tickets. But there are people who do that. What happens is the liquidation, it says, oh, wait a minute, this position's about to go underwater, I have to sell. And when it sells, it sells price insensitive, i.e., it literally just dumps. And so the deal is you sell, let's say it was at 102 when this started, and it ends at 92. Your average price for selling that is probably somewhere around 97, 98,000. But you then have the ability to potentially buy back

all of your swap short at 92, 93, 94. So you lock in a pretty substantial profit if, in fact, you can pull this off. Now, forget the morality of it. Forget whether it should be legal or not. That mechanic has worked multiple times. And so if you've heard me multiple times, I always look at the funding rates. When I see them get substantially high for a period of time, you know that people could put on the potential to do this trade profitably. Whether they actually pull the trigger on it is a different story. Now, it's worth noting that if somebody like, say, Saylor or any of these other sovereigns or any other large buyer had major spot bids in the market and they tried to do this,

the people who tried to do this would get their heads handed to them and they would get killed. So it's not a risk-free trade by any stretch of the imagination. Of course, generally, that's not the way it happens. Very few people leave resting bids out on the market, and it takes time to react. And in fact, most of the algorithms that are used by these accumulators would float with the market and look to pick it up much, much cheaper. So that's the situation. And that is almost certainly what happened. It's just this, whether or not we ever find out who or where, you know, who are the major players, that's a different story. We always talk about it. So anyway, I'll end there. There's probably questions around that. Yeah. And i guess to be clear is that

what you view is totally what happened yesterday i i look it's almost certainly what happened yesterday i mean come on did you have those total numbers were they i i had seen quoted like 2 billion 2.5 billion i mean those are multiples of previous events i i look at coin glass and coin glass doesn't have it at that high. I mean, yes, it was the biggest single long liquidation number since June. And the fact that we, which, you know, in and of itself, the fact that we've had over the last two weeks, more longs liquidated than shorts by a substantial amount as we're sitting here at 99,000 is rather funny to me. I actually posted that this morning.

It tells you how the underlying demand, how if you want to understand in a picture that Bitcoin is being driven by investors and that speculators have been on the wrong side of the trade in Moss, that's the easiest way to understand it. I mean, yes, it was the largest liquidation in a while, and yet it hasn't impacted the price very much. And so that's the easiest way to understand it. I mean, yes, it was the largest liquidation in a while. And yet it hasn't impacted the price very much. And so that's the way that's what you should do. That's what people should take away from this. That makes perfect sense. Joe, obviously, you're looking deeply into a lot of this data. How are you viewing the price action of yesterday? And generally, I guess this climb and sustained price action right around 100,000. Yeah, I think the key is the sustained price action around 100,000. I mean, if you haven't looked in the last 40 seconds, ETH has crossed 4K, right?

Yeah, and it's also over 0.04. Clearly, that means on the ETH Bitcoin ratio, which has been a while. Yes. And so I think what we're kind of seeing here i mean we've seen some really interesting coins move right like the other day we saw like verge move up you know 150 percent and like i haven't heard of verge like verge's big move was when they went to erc20 they went yeah and they went to ethereum back in like 2018 that's like the last big thing they did it's like why is that coin moving?

And I think we're seeing a little bit of a pause here, you know, around 100K with Bitcoin. Obviously, we moved up past 100K. Exciting moment for everyone for that, you know, 18 hours or whatever it may be. It's a psychological number. And I think we underestimate how much psychological numbers actually do impact the market. You know, people still think they can't get any Bitcoin because it's too expensive. And so, you know, I think it's a simple number for people to kind of grasp onto. But we are seeing, you know, what we all kind of called, which is Bitcoin makes a move up. And once it pauses for a couple of weeks or a month, we see a rotation into everything else. Right. And

it doesn't take a lot now that Bitcoin, you know, is multiple trillions in market cap to move smaller coins that are out there that haven't moved in a while. And as far as Ethereum goes, it's a staple. I mean, Tether printed, you know, another, you know, billion dollars and a lot of that flows through Ethereum. It is used, everyone kind of settles back to ETH at some point, you know, whether you go to Base or Aalanche or arbitrum, you know, you're at some point you might be moving back into Ethereum. Or, you know, you send some of those coins off to an exchange, they're going to settle them back to Ethereum. And so it's just going to continue to move up. Obviously, you know, we've got ETFs, it's cemented in the space.

And so, you know, the take is it was just a matter of time anyone else specific feelings on what's going on with the market andre what do you think obviously you're looking at this from more of a institutional perspective we've seen to joe's point obviously ethereum four thousand dollars but we've also seen a bit of increased interest more than a bit in the eath spot etfs they've had net inflows they've had days where there's been larger inflows on each spot etfs than bitcoin yes that's true um i think yesterday alone we saw the highest uh daily net inflow into your your spot ethereum etfs right uhlightly above 400 million US dollars. And also, by the way, on a global basis, we saw the highest net inflows over a five-day period, right?

Across all kinds of products. That's why guys like Matt Hogan, my colleague, he says it's not an out season. It's like an everything season. Everything's being bought by by investors right at least according to the etp flows i just want to weigh in what happened yesterday i think i totally side with dave i think there was huge long liquidations the numbers i have are from glass mode and they say like in a one hour time window, I think was 20. So it

was 11 o'clock yesterday. Universal time, you saw 44 million US dollars in liquidations within one hour and was the highest amount of long liquidations within that one hour timeframe since April, right? Since we saw that GBTC post ETF sell off, right. But I think in general, if you look at all kinds of indicators, I mean, after such a sell off, you'd expect, okay, sentiment must be really bearish right now, right. But if you look at

all kinds of indicators, you still have to say that sentiment still remains relatively bullish, right? Especially if you look at the out-season index or you look at the basis, the base is still relatively elevated. We just talked about ETP fund flows, right? Options view, crypto fee and greed index, all these indicators, and also funding rates were mentioned, right? All these indicators, they tell me that sentiment is still elevated.

You see some pockets of de-risking, right? I think the sell-off yesterday was induced by crypto hedge funds. They've been de-risking pretty aggressively. More recently, I think they have the lowest beta to Bitcoin since. So they've reduced their market exposure to the lowest level in year to date, I think. And this also corresponds with the whale exchange inflows we saw yesterday. So there's some de-risking going on, but still hot pockets in the market. So I don't think if we continue to consolidate, there's still more downside.

But at the same time, if you look at on-chain data, what's still surprising, right, is that overall exchange balances for Bitcoin continue to drift lower, right? And so this kind of supply shock narrative is still continuing, despite the way exchange inflows and profit-taking. Yeah. I don't know if you had that before. It was more of a question to Dave, actually. When it comes to those liquidation events,

is it the exchanges that are doing this, as they probably have the most data and information on? No, no, no. Actually, thanks for asking that question, Panos, because that got asked online as well yesterday. Understand that it is, while it is theoretically possible for unscrupulous people at derivatives exchanges to be working with prop desks and without naming names, we know that that probably did happen in previous cycles. I think that the size and scope of the derivative exchanges at this point and professionalism has increased dramatically. I mean, look, I'm not going to speak out of school. I don't have data one way or the other, but it is inconceivable to me that, and in fact, in Binance's case, it's impossible because, you know, with the DOJ

crawling up there, well, nevermind, I was going to use a gross way of- Their ass. He's talking about their ass. With the DOJ up their asses, that ain't happening. And, you know, organizations like OKEx and Bybit are doing very, very, you know, they're spending heavily on compliance. There's no effing way the exchanges are doing it. But the exchange liquidation engine is set to operate in a particular way. And there are large traders on these platforms that can see and understand, you know, where the liquidation points and pressure points might be. So it's proprietary trading firms with significant capital. It could be one firm, it could be multiple firms. I don't want to speculate. I have seen things in my life

where multiple firms have gotten together and shared data in order to give them better information. I'm not saying that's happening here. I have no personal information. I just know it's possible. But no, I don't believe the exchanges have anything to do with it. And in fact, if there was any sort of global regulatory regime where they decided that this sort of manipulation is illegal, and by the way, it would be considered illegal in European jurisdictions, in Japan, and in the United States for certain, pretty confident to be illegal in Hong Kong and in Singapore as well, if it were in traditional markets, then the exchanges, I'm sure, would cooperate and say, yeah, here's the sellers, here are the buyers, go see if you can figure it out.

And if regulators could find it, then they would find people for manipulation. And just so people understand, when I say manipulation, I was asked a long time ago to help define this for US regulators, and they've adopted it, which is manipulation is when you buy or sell or when you do one of two things, you place bids or offers without any intent of filling them, or you buy. For people who've heard the term spoofing, yeah. Right. Spoofing or layering or various things, but it more or less defines it that way. And the second is when you trade in a method to create more market impact, i.e. move the price more rather than less, i.e. if you're selling, theoretically, you should want to sell high, but there are circumstances when you might want to sell low and circumstances when

you might want to buy high. The most classic of this, and there have been prosecutions for it, so people should understand what I'm talking about, is when there's an index inclusion event. A company gets added to the NASDAQ index or the S&P index. On that date, at a particular point in time, it's going to get added to the index. So people try to game the system by buying and pushing up the price and buying at a lower overall average than it will be when it gets to that price. And often they then short at that price because it's a top tick. There have been cases where people have gotten so greedy that they've moved prices to limits and moved it so much that the regulators said, wait a minute, you clearly were trying to

manipulate the price. That's the kind of thing that this would fall into. And, you know, I don't think it matters a toss to the overall market. I think actually it would probably improve the market and be bullish if these sorts of things could at least be, there was at least some risk to companies doing this. It would be better for market integrity. That said, you know, as a libertarian, does it really matter in the end? Honestly, in the end, it doesn't matter. I mean, we're at 99.4 now. I would be pretty surprised if we don't tick 100 at some point today again. And, you know, it really, all it does is it flushes out people who

lose money or the people who probably deserve to have their money, you know, fooling their money soon parted. And people who made money, a lot of hodlers did by having lower bids out. And the market makers themselves and the prop trading firms themselves, does it really matter in the long scheme of things? But to answer your question, Panos, no, I don't think the exchanges have done anything wrong in this scenario. And frankly, it's wrong to look there. Yeah, Dave, I think the clear nuance there, just for people's understanding what you did say, is that it is the liquidations on these perpetual swap exchanges that allow for this to happen, but it's not the exchange doing it themselves.

It's just the mechanics of liquidating large orders that pushes the book in either direction. And if the book is thin, it pushes it further. If you didn't have a real-time liquidation engine, it could be substantively worse. Of course, that's what I'm saying. It's not inefficient, and it's not the exchange is meaningfully hunting your stock losses or anything like that, which is what I think he was originally talking about. Right. And market makers do that. But I want to make the point that because people will say it, they'll say, oh, this proves that real-time liquidation is bad. Actually, it's the opposite. Anyone who's been in the financial markets around

potential market panics knows that in 87, when the crash happened, the reason it was so bad is because if you put $100,000 of collateral on a crypto exchange and you're leveraged too much, you lose your $100,000. You put $100,000 in collateral on a futures exchange, you could lose a million. You could lose $10 million, theoretically, if you were really stupid, but that'd be pretty hard to do. But the fact is, it's not limited loss. And so what happens around big financial panics in futures markets, whether it's- Margin calls. No. Well, right. Or if you saw Baring Brothers go blowing up because of Singapore, it was exactly that. And so you can make a very, very good argument. I think it's actually true that as crazy as the day yesterday was, and we look at it, there was no

systemic risk. At no point yesterday was there anybody saying, oh my God, there are going to be firms that are going to fail. We don't know if things are going to settle. And people panicking. There was no panic. The market just reacted efficiently. Whereas the same kind of event in the old style futures markets could literally have triggered a financial panic. The market just reacted efficiently. Whereas the same kind of event in the old style futures markets could literally have triggered a financial panic. And that's very important. I would love to make that point. I've actually talked about it with both Republican CFTC commissioners, and they both know that I'm right. So it's a very interesting dynamic because it will get used by people to say, oh, look at how crazy

this market is. Honestly, I think it proves how great this market is. I think as a segue to the next conversation, what's interesting here besides the insane volatility on Bitcoin is looking to the altcoin market and seeing how it reacted in context, because in a bull market and a bear market, these things I think are very, very different. And this time we still have Bitcoin dominance continuing to drop significantly. It's at 55.41%. Just a week and a half or two weeks ago, it was at about 62%. For those who watch Bitcoin dominance as a signal of when alt seasons might come, December 2016, December 2020 were the tops, three massive alt seasons. We are now in December of 2024 and Bitcoin dominance finally looks like it's rolling over. It could be as simple as just watching the four-year cycle in this context. But yesterday, like I said,

even with these huge moves down, altcoins, if they did did drop bounced very quickly and have continued writ large to out perform Bitcoin even amongst this volatility which is a huge signal for anyone watching this market because that has not happened in years there's not been that kind of volume or interest in all coins go ahead Carlo good morning and happy alt season Scott I cannot disagree with celebrating you're saying for those who celebrate. And there's reason to celebrate because right now I think we're at the market stage where you pretty much can throw a dart at the wall and hit a winner. Everybody is a first rate trader at this point because everything is pumping.

One interesting observation I saw yesterday that hasn't really been talked about a lot as far as the significance of it is the announcement that SUI has been added to Phantom Wallet. Phantom Wallet was the engine that drove the Solana ecosystem through the roof and the meme coin craze. And now you've got SUI being included along with Ethereum, Bitcoin, Solana, and Polygon available on Phantom. And I think that that has very promising prospects for the future of that ecosystem and that chain. And it just ties into what you're saying. I think we are in alt season and we're going to continue to see aggressive growth between now and inauguration and maybe a cooling off after inauguration. But I think the headwinds are out of the way it's going this hangs out around a hundred thousand for a while longer especially

now having the confidence of having broken it off coin should go absolutely mad in my opinion uh lawyer i see you're throwing up the hundreds i guess you agree yeah i mean for me like i like tends to it's like it's just a feeling right i'm not a trader i'm not staring at these charts but really like i've been top blasting and buying dips because like once you feel like all season is back you really just need to not be at the top of it to make some money because like if people are like if you've been around for the bear market you know that like dips were followed by further dips if dips dips are getting bought up, let's go. Are you going to change your name back to Lawyer.eth?

Is that going to be my signal? You're going to remain agnostic. Yeah, I'm going to forget all those things. Just be Lawyer. Removing.eth is uh bitcoiners removing laser eyes i guess at a hundred thousand right aren't bitcoiners supposed to remove their laser eyes by the way i haven't seen it but that's supposed to happen i mean i think uh like um mcafee was supposed to eat his dick already too that was a million and uh i think his dick is

dead so i don't think we're gonna be seeing seeing that. But, you know, speaking of, no, that was really an off-color comment for a friend. Sorry, buddy. Hey, he started it. He started it. He started it. It is my fault, but I mean, like, yeah, fair enough. I'm just saying, it's, you know,

I don't think he can eat anymore. But, you know, moving on to other people's thoughts here on alt season, as you said, Joe, I mean, we just crossed 4,000 on ETH, right? It's still massively lagging. Bitcoin is 20% off an all-time high from previous cycles. But do you think that this is going to be the time finally? And if ETH goes, what does that mean for the kind of alt season path and all of those tokens and memes and nfts that have been on eath and kind of led previous cycles oh man i don't want to start

with nfts but i i do think that alts held up incredibly well in that little like flash crash that we just had right like you know so i. So I think they're getting bought up and I don't know who's buying them all up. Like I said, I don't know who's buying up these, especially older coins that are out there, but I think there's enough mechanism in place with the number of liquidity pools that are out there, people that have traded these things, bag holders that have been holding onto these things that are kind of finally celebrating. But at the same time, if you zoom out on some of these charts, I mean, these things are still down 80%, right? It's very few are actually hitting all time highs again. And so you just have bag holders,

you have people that have been, you know, unfortunately, with retail, it seems like people kind of hold their losers and they sell their winners. You know, if you're listening, you should in this financial advice, you should always do the opposite like hold your winners and double down on your winners and sell your losers uh and so i think you're you're maybe seeing people that are coming back and saying okay what should i buy right and i'm sure everyone here is starting to get the text messages like hey my xrp is coming back like what's going on or congratulating you on 100k you know even though it's it's not really a huge deal i I think, for everyone that's kind of been sitting in the space, we've all just kind of, you know,

known that this is coming. But I do think that there are specific projects that are in the top 100 that, you know, are sitting at certain, you know, couple billion dollar market caps that if ETH moves to eight, or it moves to 15, I mean, just the way that this market trades is people say, well, if ETH has a market cap of this, then this project should have a market cap of that, right? We're still in kind of this meme coin craziness. The thing I'm looking for is what else on the app layer actually has utility, right? And like right now, it's like we have one project that we can brag about, which ismarket right and they're going to go into a a quiet period here because it's not the election season and they're going to try to kind of figure out their strategy but we really have nothing else

to point to right we have infrastructure with layer ones and then layer two three four five on top of that we have bitcoin and then we have meme coins, right? And that is the real application that's out there, we still don't have app layer, right? You know, and I know, Bitcoin's utility is Bitcoin's utility. But I think we need to figure that side out. I'm bullish, because, I mean, if you play around some of the wallets, and you haven't been in the industry in a while, you're going to come back and say, Okay, like, this is a lot easier, I can move, you know, I can swap from chain to chain on

Coinbase's or on Uniswap now. And I couldn't do that before. Right. And that's really simple for me. Right. So I think that it's the UX has gotten a lot better since a lot of the people have kind of come back. And I think that's going to be helpful for us. But again, they're going to buy these things. And then at some point, they're gonna say, what do I do with it? And I don't think NFT is the answer. I mean, I love NFTs. I have a lot of NFTs. It's fun to be in these communities. But it's just not enough utility, right? Like I could just like, why not just use, you know, in your Apple wallet, a ticket to something or, you know, paying with Venmo, right? Like these

things, you know, it's just a little bit of bragging rights on Twitter, to have like a board ape, it does nothing for you. And so I just don't see that market coming back in the same way. I hope that brands can potentially utilize the technology in some way, but it's just not, it's just not there. So I don't think, you know, I think the reason you're seeing these things bump a little bit is people are like, oh shit, are we going to rotate into NFTs? And I think obviously floor prices are changing because ETH moving up carla have you tried breeding crypto kitties

oh sorry it's bad i know i interrupted you and i didn't hear you but yeah it was a crypto kitty joke which you need a crypto kitty joke anytime we talk about eth nfts but carla you can go ahead yeah i i respectfully have to disagree with joe this, because I think we are going to see a huge run up in NFTs, especially ETH NFTs from the original cycle, because there are several high profile artists who are inevitably going to get bought up as people start to realize gains during all season. We're already seeing the punk floor go up punks are a symbolic uh flex in the space and they are a store of value to people who see them as that the board ape floor is closing in on a hundred thousand again pudgy penguins are at sixty thousand and i think stuff like x copy and all

these other significant artists from the space it is inevitable that you're going to see the transfer of wealth from crypto gains to NFT art, just like people transition to real estate and high-end watches. This is just another extension of the cycle. And I don't think it's going to cool off. I think it's going to get bigger. Will we see new innovation though? Or is it going to be those few huge PFE projects like Punk, Sport Apes, the ones that have become viewed as, I guess, you know, the higher quality or tier one or blue chip? Or are we going to actually see some innovation in the PFPs? Or is there some new wave coming with NFTs, in your opinion? I don't think that PFPs are going to innovate. I think that you're going to see the PFPs that were

respected and sought after as grails, quote unquote, in the original cycle, probably continue to sustain value. A lot of the other stuff is going to go to zero and be tax harvested or burned. But you do have use cases for NFTs. I think for ticketing and for purposes of breaking the cycle of going through intermediaries, I think if you're an entertainer or if you're a brand and you can develop an ecosystem and directly reward users through an NFT,

I think there's a value prop there. I think what's going to happen is the price of getting into these things is going to go down exponentially when you see things like Solana's innovation with respect to their lightning fast transaction protocols and say and suey, it's just going to become exponentially cheaper to launch NFTs on a large scale. And when that happens, I think it's just going to be network adoption. And it's going to

go up because it is the easiest way to directly communicate with your fan base and not worry about losing it. If the intermediary cuts you off that's not there's no real world application that no one cares i mean we proved last cycle that these brands that tried it they all failed and those projects have all been scrapped at these big brands the brands are done with nfts and they won't launch them again because the brands i think came in early and experimented and And yes, they did pull out. But I don't think that changes the fact that we're getting more digital and we're getting more on chain. And I think you're going to see more individual entertainers, influencers. And I think you'll see brands come back.

Just like TradFi has finally acknowledged the value and the utility of this stuff. I think you're going to see brands acknowledge it. I could be wrong. You could be right, Joe. But I think you're going to see it. Do you think the Hawk Tua launch of an influencer went well? That was my question. So I was going to ask, are they just going to go to meme coins where it's an easier money grab than even try the NFTs with utility?

I think that was kind of my next question, Joe. I think the problem with the meme coin cycle, and I've commented extensively on the dangers for celebrities and the legal pitfalls of celebrities jumping into meme coins, especially if they're picking developers who are not necessarily looking out for their best interests, and they don't understand the technology. I think you can clearly see that Hak Tua was an epic failure, and she's done tremendous damage to whatever quote-unquote brand she built based on this viral meme. But I think when you're talking about the difference between fungible meme coins and non-fungible, I think fungible tokens become the currency of the ecosystem. You look at what mother Iggy Azalea is doing with her token. I think she's doing it right. She's building an doing with her token. I think she's doing it right. She's

building an economy around her token. Now, the NFT is a non fungible membership option. But I think if you're talking about currency, I do agree, Scott, I think the mean coins are an easier lift because they're, they're fungible. They're easy to launch, they're cheap to execute. And I think as we continue to see clarity in the regulatory space, you're going to launch they're cheap to execute and i think as we continue to see clarity in the regulatory space you're going to see more people turn to that as a currency and a mean of a means of crowdfunding like yeah i mean it's not surprised it never surprised me that the top down like the brands aren't going to be able to do it it's like it's just like xerox you know i had trouble with new things that came in um but i think we did see with the last cycle that

um some of these brands that began as communities that are digital nft communities did survive and may be coming back i think it's early to say it's just a you know a flash in the pan and i think what it showed us is that like I think a 10,000 NFT collection is going to have a lot of trouble in this era. But as digital communities become more popular and digital flexes become more popular, it's still going to be a thing. And I think 10,000 is a much smaller number

when you start to include the swaths of people who are using crypto. Now, again, to your point, I don swaths of people who will are using crypto now again like to your point i don't know why they're going to start using crypto um polymarkets is the one thing that you can point to um but people are building crypto rails like there are investments and things in the financial space that people would be doing all day and are even starting to gear up to be able to do with Trump coming into power. So I think you'll see those things, at least mostly in the financial space, maybe some in the digital communities. I think a lot of that will be bottom-up grassroots.

But a lot of this is coming, and at some point, these businesses will figure out how to be cool. I don't think it'll be Nike. From the flexing perspective, you know, online identity and having something scarce that attaches to that. I can tell you anecdotally, I was in Miami just for the day for Art Basel on Tuesday.

There was definitely more of a crypto presence than in the past few years. I was there with Micah Johnson, who obviously is a physical artist who also was pretty big in the NFT space with Aku and some of his other art. But the talk around town, because we went and just checked out some car dealerships and looked at watches, the normal things that crypto dudes, I guess, do, was that the crypto money in Miami, certainly, and around is back. Like private jet prices are going up watch prices are going up car prices are going up so this newfound bitcoin wealth and crypto wealth that's coming is already

starting to see sort of a meaningful push in the luxury goods market and i do think that inevitably comes online as well we just saw a guy like 100 a $100 million banana or something, right? It was a $6.2 million banana. It was a $6.2 million banana. Now it's worth more. I don't even want to know what he paid for the antibiotics to go with a four-year-old banana that he decided to eat or whatever. But Justin's son also... Do you think he'll resell that banana? Oh, God, man.

That's worse than my McAfee joke. Maybe the peel so that we can be more appropriate. do you think i'll resell that banana oh god man that's my mac that's my macrophy joke uh maybe the peel so that we can be more appropriate tron did just make it right i mean after all that so justin sun's a perfect example i mean you know he's one of the wealthiest people in crypto and i can't even begin to calculate what that looks like with tron at an all-time high. Right? And so that kind of... Sorry, Scott. I had a lag there, but that's a fungible banana. They actually keep changing that banana out.

Thank you, Eric. Yeah, the artwork is the concept, not the physical banana itself. I want the old ass banana, and I want to see somebody eat it. I mean, that's the story here. Eating a new banana. It sounds like see somebody eat it. I mean, that's the story here. Eating a new banana. It sounds like less of a story. I ate a banana yesterday. That's not a story. And it could have been the banana. There's nothing scarce about that particular banana,

except for that they chose it. But either way, I think if we're looking for signs that crypto money is back, buying $6.2 million bananas and eating them, I think is a is a pretty good one. Zach, you haven't really had an opportunity to speak. I mean, how are you viewing right now the way that the cycle is evolving here with not the volatility, but Bitcoin hitting one hundred thousand? I know that you primarily focus on Bitcoin. I mean, what do you think is likely coming now? Look, I think Bitcoin one hundred thousand is a huge, huge deal psychologically.

Right. Obviously, in terms of price, it's not that much different than we had last week. But I think the fact that Bitcoin has accomplished this, like there's a part of it that feels like we were right, sort of regardless of what else happens to the rest of the cycle, like Bitcoin is a real thing. Bitcoin, I was sort of disappointed

Bitcoin didn't hit 100,000 on the day that Gary Gensler announced his resignation, but it happened on the day where Ken Griffin and Powell. I lost that. They can trade the Bitcoin at the, at the New York times deal. Zach, you're having some connectivity issues.

I don't know if you can hear me, but you're a glitching in and out pretty bad. But he was making the point on the way we saw. Yeah. Okay. Sorry, Zach, you glitched out there. So we kind of missed you. We heard Ken Griffin and Jerome Powell, which was great. I mean, the last week you have the president of a future president of the United States congratulating, obviously, Bitcoiners on $100,000 Bitcoin. You have Putin making comments. Sorry about that. Can you hear me? Yeah have Putin making comments about Bitcoin. And then as you pointed out, I mean, Jerome Powell, in one of the most jumbled and clearly lacking of understanding comments, at least was talking about Bitcoin, kind of talked about it as digital gold, but also as a

speculative asset and not a store of value. But that implied that gold wasn't a sort of value. It was kind of a mess. But Ken Griffin basically saying that people want agency over their lives and they do crypto in that way. I mean, you know, Ken Griffin is a Larry Frickter. Biggest names on the planet are talking about this, Zach. I mean, that's the point you were making. Yeah, I think it's an incredible moment of validation. The other thing I'm watching now, even though I'm mostly focused on Bitcoin, like the ETH ETF inflows seem to be accelerating.

Yeah. Like we saw early on with Bitcoin, right? Like I bought some ETH as a trade here. I'm interested to see how that goes. But like that is interesting to me. And then last night, right, the appointment of David Sachs, who's been a longtime supporter of Bitcoin and investor in lightning companies, and, you know, and LP and various crypto funds to be the crypto and AIs are like, you know, that's pretty exciting to every appointment is like more exciting for the crypto industry. And I think the financial industry as a whole is more exciting than the last one. I mean think the financial industry as a whole is more exciting

than the last one. I mean, even, you know, listen to his credit, Anthony Scaramucci is one of the largest critics you could find of Trump has been repeatedly tweeting about these appointments, saying they're incredible. He has to give credit where credit's due that Trump's on fire. So when you have the biggest skeptics even coming around and saying that these appointments are great for Wall Street as well, not just crypto, I think you have to pay attention. Go ahead, Dave. that it's crypto and AI together will solidify the narrative of crypto being the payment rails that a digital AI policy will need. And, you know, that's a narrative that was out, I mean, last year, I mean, you know, it was about, it was last, you know, a while ago. And, you know,

there was, there were some things that started to take off as a result. But when you start asking yourself, you know, we had DeFi summer and, you know, NFTs and whatever. I mean, the next one, next big leg up could very well be the confluence of crypto and AI. So watch this space in the future. The other point that I wanted to make was one of the funniest tweets I've seen because it was so clueless. It's almost it's embarrassing. Is Lloyd Blankfein, you know, the former head of Goldman Sachs, basically saying, I don't understand why if you're pro the dollar, you would cheer Bitcoin. Completely misunderstanding the game theory and everything that's going on around it. It's just it's funny how it's gone from FUD to try to knock Bitcoin down from people who realize that it forms competitive threats to their particular businesses to kind of whining and you know it's

if you want to get your sign of the there then you win part of the the equation we are clearly in the beginning parts of there we win and and that kind of whining is is part of it it's almost a plea to like please explain to me why i don't understand yeah we watch jamie diamond do that and cope repeatedly understand. Yeah, we watched Jamie Dimon do that in Cope repeatedly. Sorry, go ahead, Buzz. I don't know if you're speaking, but I can't hear you. Go ahead. Yeah, I agree that some of those next narratives could certainly be AI

and that confluence with Web3. Dave, that was a great point. We do have a sponsor today. It's Bet Arena, so they're kind of at the confluence of Web3, Dave, that was a great point. And we do have a sponsor today. It's Bet Arena. So they're kind of at the confluence of Web3, AI, and sports. So I do want to throw it over to Bet Arena and maybe just give an overview of exactly what the product is and maybe a little bit of an elevator pitch there.

Bet Arena, just testing your mic here scott not sure if you can hear them i cannot so you must uh be having this you're gonna have to bring them down and back up or uh yeah yep i got it i'll deal with it in the meantime i think we can uh while you're working on that we can continue at least briefly the conversation i mean is anybody surprised that ken griffin from citadel is coming around that you're hearing jerome powell talk about this putin like i said i mean it just there's nobody everybody's going to have to have an opinion in my opinion you're not gonna be able to remain silent on bitcoin ken griff Griffin coming around is one of those funny ones. Citadel has been in the space already.

It's just him basically publicly kind of admitting it because now he can. What is a point that people always fail while you get this guy up is how many of the large financial firms that have significant exposure to regulators have avoided mentioning it in public because they didn't want regulatory pressure the citadel was already do trading in crypto but now it's like okay i can do this so they're not going to hurt me anymore so screw it and i think you can see a whole lot of that happening that's how we're doing over there i see a month i think we're doing good better you know i'm gonna check your mic here we're just asking for elevator pitch as we go into an ama here

seemingly the that you now went on mute i did hear you before okay joe do it. Can you hear me? Yeah, we can hear you. Thank you for having me. Sorry, it was with the mic. We had some problems in the mic. No worries. We're just transitioning here to the AMA, looking for

an elevator pitch on Betterina, because Dave made a great point that we're kind of looking for the next narratives, right? And there's this confluence of AI and Web3, and you guys are really at that confluence of AI, Web3, and sports. So I just wanted to get a bit of an elevator pitch. So Betarina is a very straightforward concept. So what we are trying to bring to life is what we call the sports citizen journalism. This means that we are creating a platform that is focused on sports. So we have statistics, news, forecasts, results and everything that is related with sports. And the goal is very simple. Give

content creators a media platform where they can create content and get most of the earnings. Allow users to access the best sports content and get rewarded for their interaction on the platform. And allow investors to see all this unraveling and see the BTA token value multiply exponentially. So with these goals in mind, what we are presenting is an alternative to traditional sports media publications that often pay very low to or a fraction of what they can make on Better Arena when authors can create contents. is building something like this because if i can recall correctly there's no other platform that is focused on sports that allow users to create their own content content and get rewarded by it and that's what you are trying to do have you as the the price of bitcoin has been reaching all-time highs because it's probably been about a month or so since you and I spoke last. Yes. And Ethereum is going up and the industry in general is seeing more users. Are you seeing sports and Web3 in that category increasing the pie?

Are more people coming in? Is there more interest? I think there's more interest every time the crypto market grows. More users get interest on projects in projects including including web3 projects. I think sports is still Well, there's still lots to explore on sports, I really don't Besides socios and chilies and the the fun tokens and stuff like that i i don't see very well renowned sports platforms and i think that's uh so i think that that's a a market a very big market

that's still uh to be explored and that's what i was talking about veterinarian fills that space because uh what we are doing and bringing web3 to the sport and allowing users to create their own content is something that i even statistics and news and results platforms i don't see many of them on the web3 maybe because sometimes web3 projects always trying to create something very high-end and innovative and sometimes forget that people sometimes just want something like similar to web two platforms but that but that allow them to to get more rewards and get ownership of their content and stuff like that i'm a big sports fan and i know that two headlines that have hit at least my timeline.

One has been that I think it's Russell Okung. During the COVID era, he decided to take 50% of his salary in Bitcoin, and that $6 million that he took as salary is worth something in the tune of $20 million. And then it's also Dave Portnoy, who's the founder of Barstool Sports. He bought, I think it was a million dollars worth of Bitcoin at $10,000. And then he met the Winklevoss twins, and the Winklevoss twins were looking to orange pill him. But they actually did the exact opposite. He decided after meeting with them that they were a little bit too crazy for his mind, and he dumped his Bitcoin right after.

So he's definitely regretting that right now. And I bring up those two examples of sports and Bitcoin hitting the news because I'm wondering, who is your target consumer? Is it a beat writer? Is it athletes? Who are you exactly trying to get signed up and start using the platform? Yeah, I think the most interesting part of Gatorade is that everyone can become a sports content creator. So, of course, if we bring athletes and renowned names to the platform, it's always a way to bring in other users and into incentivize content creation but I think what's we went really to the marker to make it like democratize the content creation so we really want everyone and everyone that like sports ever and has

something to say about the events or the results or their teams or their players so I think we really wants to incentivize everyone that likes sports to be able to create content uh written content articles podcasts videos whatever but they think they're the this best for them but we want everyone to be able to create content and be able to get most of the of the money uh from the content from the content they create. So removing the middleman, removing the issue. When you work as a freelancer sports writer, you have to usually work for publications

that keep most of the money and receive a fraction of the money for the content that you create. And that's something that we want to remove. So it sounds like it's really like independent content creators. So diving into that, what are the existing avenues? I guess an independent content creator right now can post on TikTok, maybe they have their own blog, maybe they can be posting on YouTube or whatever their content platform may be. So each of those kind of have their own monetization model

for the indie creator. And my question is like, what would your pitch be to them? Why it's better for them to create content on Betarena versus some of the other avenues that they have right now to monetize their content? I think if we think about platforms like X or even other platforms, some of them are very politicized and you have lots of news about lots of stuff. And the difference is that our platform is only focused on sports. So if you are a sports fan and you want to check the results of your team or follow the events that is happening live or see the statistics, you go to Bat Arena.

So everything that is related to sports is on Bat Arena. And that's the difference. If you go to TikTok, you have lots of stuff, a lot of video are going to be pushed to see other things. And sometimes you just want to see sports and you don't want to see other stuff and need to try and find out where the sports creators are. And that's the difference is that we are really focused only on sports. So if you are a sports fan and you want to read articles about sports, you can do everything inside our platform.

You can read content, you can see videos, you can check the results of the teams, you can see the statistics of the players, you can see everything. So it's a world of sports, as we call it. And that's the big difference. It's something that's everything that we do and bringing users, we bring the users that the authors are seeking for. It's the ones that are sports fans and TikTok has everybody, everyone, and it's more difficult to focus on a specific topic. And I remember last time we spoke, we had a good discussion about the network effects as it pertains to social media and just that more users creating content creates that network effect. And it's hard to identify, does the chicken or the egg come first? Do you need the

content there to attract the users or vice versa? And we had a good discussion about how you guys are leveraging AI to actually build in a pretty robust content stream. Can you touch on that since we last spoke? Like how you guys have been leveraging AI to build out the content generation for the platform? Yeah, including we are now creating a new platform that is going to work inside the Veterina and also for our partners.

This is called the Terminal. And what we are doing is, so we have millions of sports data points that we use, that we plan to use to generate the sports content. And we are going to use different language models where the users or the partners can even select what language model is going to be used to create the contents and so initially it's going to populate ai contents to the sports for the scores platform for the vet arena and after that we'll allow access to partners who want to subscribe and create content for their own platforms for example if you have a wordpress offer your right to medium or any other platform that you create

content you can use the terminal to generate that content for you using our data endpoints and and this will allow to generate content for specific events analysis predictions news you name it and and this is i think it's very interesting so um this will it will be be used to create content for our own platform and also allow partners and subscribers that want to populate content through their platforms or where they create content for. I know also when we last spoke,

a big thing that you guys were working on was your presale. And that was really the call to action a big thing that you guys are working on was your presale. That was really the call to action for the audience last time, was to take a look at the presale. I know there were four rounds. I'd love to get an update on how that's going, and maybe another call to action to the audience,

if there's another different way to get involved today. Yeah. So as I was talking about, we are now in the third round of the public presale and, uh, the, the, the great, the great opportunity that we have here is that, uh, we are already already a platform that's, uh, is profitable. So we are in the market for five years now. And, uh, the public presale is just a way to get more investment but more importantly is to create the bta the token that is going to be used inside the platform so everything that is going to happen inside the platform so if you are an advertising that want to pay for it you are

going to use the bta if you are a subscriber for the terminal you want to create content you have to pay with bta if you create content inside the platform and get rewarded by it and users can wants to access to exclusive exclusive content they have to pay with bta so the bta is as an enormous uh and besides that we want to add a bta to our partners that we have right now, 26 partners, most of them betting websites that we want them to accept BTA on their own platforms. And all of these utilities will make the usage of the BTA grow and with that, the value of the token is going to obviously uh go skyrockets um and that that's that's a very good opportunity now to get into the pre-sale uh where the investors get the token in a special price and with special perks and get the benefit from from the the continued growth growth

of the platform that we have already built and is already operating right now. Cool. Yeah, not financial advice, but if you did want to pin up the link, I can actually do it right now because I'm on it to the public presale and people are listening in and want to take a look there at the different rounds. I did just pin it up into the nest for you. But I really want to take a look there at the different rounds i i did just pin it up into the nest for you um but i i really want to uh to thank you for joining and are there any other uh just as we're getting to the top of the hour here and any other calls to action for people who are listening in um is it mostly the pre-sale or is there something else that we can get them doing right yeah so we launched two weeks ago the sports text so that's uh that's publications that users can create uh so if you go into the platform and create your own account you are gutter your publication is created for you automatically then you can customize them the the publication you can

start creating content right away about sports and the ones that start to creating content right away about sports. And the ones that start to creating content right now will be the first ones who will be able to monetize them, monetize that content. So I think it's a good opportunity to start creating sports content now and wait for January and February when the DG of the token is launched and we start monetize the content of the users

that are creating the content. So I think it's also a good opportunity for them. Excellent. Well, thank you very much, Jao. And it's the second time that you and I have spoke, so I look forward to getting another update, hopefully in the next couple of weeks, and wish you guys the best of luck with the rest of the pre-sale and congratulations on where you guys have been able to come so far.

Like I know you guys had two and a half million visitors in the last year, which is not a small accomplishment in and of its own right. And I want to thank Scott for putting on yet another great show. Lawyer Dave, Joe, Panos and Carlos for also sticking around and really, really doing a great show of another crypto town hall. And the audience as well. Tons of comments in here, 288 comments. So I'll be going through those as well. But with that, I want to wish everyone a happy Friday. Thanks, Scott, for putting on another great show and enjoy the weekend, everybody. Godspeed to the markets. Bit of a crash yesterday and hopefully it's up only from here.