The Wolf Of All Streets - Market Update | Airdrop Bonanza | How to Value Tokens | Crypto Town Hall

Episode Date: February 7, 2024

Crypto Town Hall is a daily X Spaces hosted by Scott Melker, Ran Neuner & Mario Nawfal. Every day we discuss the latest news in crypto and bring the biggest names in the space to share their insight. ►►TRADING ALPHA READY TO TRADE LIKE THE PROS? THE BEST TRADERS IN CRYPTO ARE RELYING ON THESE INDICATORS TO MAKE TRADES. USE CODE ‘2MONTHSOFF’ WHEN VISITING MY LINK.  👉 https://tradingalpha.io/?via=scottmelker  ►► JOIN THE FREE WOLF DEN NEWSLETTER, DELIVERED EVERY WEEK DAY! 👉https://thewolfden.substack.com/    ►► OKX Sign up for an OKX Trading Account then deposit & trade to unlock mystery box rewards of up to $10,000!  👉  https://www.okx.com/join/SCOTTMELKER ►►NGRAVE This is the coldest hardware wallet in the world and the only one that I personally use. 👉https://www.ngrave.io/?sca_ref=4531319.pgXuTYJlYd ►►THE DAILY CLOSE BRAND NEW NEWSLETTER! INSTITUTIONAL GRADE INDICATORS AND DATA DELIVERED DIRECTLY TO YOUR INBOX, EVERY DAY AT THE DAILY CLOSE. TRADE LIKE THE BIG BOYS. 👉 https://www.thedailyclose.io/   ►►NORD VPN  GET EXCLUSIVE NORDVPN DEAL  - 40% DISCOUNT! IT’S RISK-FREE WITH NORD’S 30-DAY MONEY-BACK GUARANTEE. PROTECT YOUR PRIVACY! 👉 https://nordvpn.com/WolfOfAllStreets    Follow Scott Melker: Twitter: https://twitter.com/scottmelker   Web: https://www.thewolfofallstreets.io   Spotify: https://spoti.fi/30N5FDe   Apple podcast: https://apple.co/3FASB2c   #Bitcoin #Crypto #Trading The views and opinions expressed here are solely my own and should in no way be interpreted as financial advice. This video was created for entertainment. Every investment and trading move involves risk. You should conduct your own research when making a decision. I am not a financial advisor.  Nothing contained in this video constitutes or shall be construed as an offering of financial instruments or as investment advice or recommendations of an investment strategy or whether or not to "Buy," "Sell," or "Hold" an investment.

We need a co-host, Mario. We need some hosts. Got it. We're up. I don't get paid enough for this shit. Wait, people get paid for this? Apparently some people make money off of things when they sit there.

I'm billing by the hour. Oh, god damn it. I knew it. A lawyer would show up and tell us that we owed him something when we're not even getting paid. We got your favorite lawyer coming. He's the one we pay the most. Guess who that is? It's got to be Silver. Every time he shows up, it's like, I get a bill. It's crazy. It's got to be Silver. He's rejoining us totally. But Carlo, have you looked at the DeFi rule that the SEC is looking to implement or think they're implementing? Yeah, it's highly controversial. And I think it does pose a particular threat to DeFi. And I think a good conversation for today, for sure.

Yeah, I'm surprised not many people are talking about it. Not yet. I think people saw the number. You know, it's like it doesn't apply to anyone under 50 million and shrugged it off as irrelevant but i think the bigger the number maybe the more more impactful it'll be or we'll break it down when we get everyone on i think yeah i think that'll be the main focus for today i don't think anything else matters as much as this pretty relatively quiet day actually just look at the news now we've've got the Solana News, which we discussed yesterday. And I think the explanation that was given by, who was it that put out?

It was Matt Siegel. Matt Siegel, our favorite. Yeah, exactly. So Matthew put out a great explanation. And that's still the explanation that people are sharing today. But that's pretty much it. I think there's a few countries cracking down on crypto crime, which is good news. Korea, Dubai, Turkey, a whole bunch of them.

The headlines are wild. Otherwise, that... The headlines are wild. It's all the headlines about South Korea that you're going to do life in prison if you commit crypto crime. But the actual story is you can do up to life. I'm saying you could do up to life in prison if it's a horrid thing. But they were just basically strengthening their regime against it.

But for anyone who read the headline, it was like, if I commit a crime that's related to crypto, I'm going to life prison for life in Korea. It's not really the case. Yeah, it's clickbait to another level. It's a crime with that's above $5 million, US dollars, 5 billion won. And then, yeah, you could get up to life in prison, obviously. It's never, you know, hey, it's a crime.

It involves more than $5 million. You're going to spend the rest of your life in prison. If you read the headlines, that's what it seemed like. It even got my attention. There you go. Yeah, so maybe just kick it off with you and Alex on stage. It'd be good to get a quick market update. I know it's relatively quiet, and Alex, it'd be good to get a quick market update. I know it's relatively quiet,

and Alex, it'd be good to get your update, not only today, but just over the last few days and what you expect this year. I mean, Scott, quick update for today. One of those boring updates where not much happens. Yeah, I mean, listen, I think it's actually somewhat encouraging that Bitcoin is chilling, sitting sideways at roughly 43,000.

I think we spent a lot of time talking about outflows from GBTC, which have slowed to a bit of a trickle. You know, I think 70-ish million yesterday when just two weeks ago, we were talking about 700 million on any given day and seeing, you know, sort of the inflows continue into the ETF. So I think it's nice that we're not getting that downward pressure and that things have stabilized. I think the market right now is just kind of on the hunt for new narrative. And it's fine to be boring and sideways coming up, I think, towards the halving and inevitably the Ethereum spot ETF narratives and all the other things that we're going to have. But this is actually the part of the cycle where it should be relatively boring in advance of the halving. If we hadn't had the Bitcoin spot ETF, I think that's what we probably

would have been seeing. But just a whole lot of sideways, a whole lot of chop, I think a whole lot of anticipation of what might come next. Alex, I would love to get your thoughts on the market. Yeah, I think I mostly agree with Scott. I think it is quiet. It's pretty stable. You know, you see a little bit of short-term movement here and there, but then, you know, as the days reset, as Monday opens, right, you sort of snap back around 43 and, like, you know,

23, 24 on ETH. So, I mean, I think it does feel calm. I think the market is still digesting um what to do with these etfs outside of the initial um you know net inflows that we've seen i think the same story applies like right like the etfs are they appear to be functioning i would say operationally look pretty good um so that's all great there's's been, I think, solid interest, but we were early in the marketing cycle for those who are early in the education and onboarding cycle for advisors and their platforms. So I think we kind of wait. I mean, I really don't think you're going to see like their main use really pick up until maybe even three months from now. I think most of the advisor platforms take several months to evaluate suitability and operational safety of new products.

So, yeah, I think we're just sort of chilling. I mean, you're seeing some some, you know, declining volatility a little bit. You're seeing, you know, some some large Bitcoin calls trading overnight. I mean, I would say it's mostly uneventful from a pure market standpoint overall in the last couple of days. Quickly, Mario and Alex, something interesting. I was talking to Matt Hogan this morning from Bitwise on YouTube,

and he pointed out that he thought actually that the conversations with RIAs were more advanced than he expected at this point. They've seen a lot of platforms start to turn on the tap. So he agreed with you. He originally thought six to 12 months. Now, I think it's more like three months when we start to see the bulk of them largely coming in. But something interesting he pointed out, and he just tweeted about it right after the show, which was this. I'll just read it. Fidelity has a 1% to 3% Bitcoin allocation in their all-in-one asset allocation funds in Canada using spot

Bitcoin ETFs. The conservative version is posted below, which he shows below at 1%. So just this is Fidelity, of course, they're very pro crypto. But for this is for someone who buys a passive index fund or a mutual fund or something from Fidelity, you obviously, most people who buy those retirement dated funds that rebalance automatically and they have exposure to 20, 30 different ETFs within them, most people don't know what's in there. But Fidelity is actively including a 1% to 3% allocation to the Bitcoin spot ETF in that for the most conservative, passive Roth IRA type investors who are just passively trusting Fidelity to manage their money up to retirement. If that right now, as I said, it's in Canada, but the idea that the Bitcoin spot ETF and people who understand the math of

a sharp ratio or the power of having something uncorrelated or idiosyncratic in your portfolio, Fidelity is basically paving the way there saying, listen, even if you hate Bitcoin, you probably don't even know it's in here, but it's helping your portfolio. I made the joke to Matt, there's tons of people in the world who are diametrically opposed to the idea of investing in a Tesla or a Meta because they hate Elon Musk or Mark Zuckerberg or something, the same sort of passionate hate that certain people have, you know, narrative against Bitcoin. Those people probably don't understand that if they're invested in any sort of mutual funds or anything retirement weighted, that they have massive

exposure to those stocks, right? Massive, like massive. And they have no idea. They hate it. They would never buy it. And they don't realize that it's helping their portfolio every single day. And I think that is an important sort of step for Bitcoin that even if you hate it, it can help your portfolio. Yeah, I mean, I agree. I think that is the right approach, frankly. I mean, there's been a million papers about what a what a good allocation of Bitcoin has been historically. And, you know, they're basically all right. Just, you know, I worked at Fidelity for 12 years. I just want to caveat here that Fidelity Canada is a wholly separate company from Fidelity Investments in the United States.

It shares some common ownership, obviously. But I think it is fair to say it's indicative of how this goes, right? I mean, the path has been, you know, derivatives in the US, spot ETFs in Canada, spot ETFs in the US, right? So like, you could definitely see this happening, especially with the commentary that, say, Larry Fink has been making about it also. Like, I think it makes plenty of sense to have a small allocation in general. But yeah, I mean, I just think it depends on who we're talking about. But when you talk about the big advisor platforms, like Morgan Stanley's and Merrill's and Edward

Jones and whatnot, like I just I would be cautious on how soon they become available. But they're definitely going to be hearing from their end clients. I mean, the sort of like the question is kind of de-risked here at this point. It's like, I mean, these are totally legal, low cost ETFs run by established issuers. Right. So I think it's like i mean these are totally legal low-cost etfs run by established issuers right so i think it's definitely coming yeah totally agree mario do you want to talk a little bit more markets we've got peter here obviously and chris as well so maybe we should uh instead of diving too deep on etfs uh see where they think we're at go ahead peter yeah yeah you know all my technicals remain you know constructive on bitcoin i i'm i'm kind of hoping we get one more wash out down to 37

maybe we overshoot that a little bit just really kind of clean out the tank a little bit but you know people are saying there's nothing exciting about Bitcoin. To me, historically, there's nothing more constructive than when a market goes up easy, goes up quietly without big fanfare. I get concerned when all of a sudden Bitcoin becomes news of the day and we start spiking and everybody's talking on the headline news about Bitcoin. That's when I worry. The fact that we're going up easy. I look at price action.

We tend to be going up by just having offers taken off the table, nothing aggressively in the bid side. That to me is constructive. So, you know, tell proven differently. I just think Bitcoin continues to work higher. I could listen to Peter talk about Bitcoin all day, by the way. It's the best. It's the best. I agree. Peter, how deeply do you dig into the altcoin market beyond there?

Have you taken a look at Ethereum by any chance? Yeah, I'm not popular in the crypto world on Ethereum because I've just had too much experience and difficulty with dealing with that i mean it's not to me if i want to store value it's bitcoin not ethereum if i want functionality it's definitely not ethereum so i i just i'm not a big ethereum fan i mean i given the opportunity i'd rather be short ethereum than long ethereum although i'm neither uh so yeah i'm to me crypto is bitcoin bitcoin's crypto and i don't wander off into the exotics and what where do you think uh the v market i should say the stock market stands at this point it's also kind of gotten a little

choppy here near the highs a lot of people can you know continue to think the impending death of markets is coming and it keeps kind of grinding upwards too i'm just i'm humorized by it all you know i see people some who i've had and still have respect for who you know are given a big red flag warning on stocks. But yet I, you know, wake up this morning and I look and NASDAQ and S&Ps are within whiskers of new all-time highs. I look around the world, I see the DAX is in the same position. I see the Nikkei, the Topex, stock markets around the world are healthy. A market whose major indexes continue to make new all-time highs, that's not a very situation for me. Now, that's not to say that all of a sudden price action doesn't confirm that, that we start getting divergences and failures and markets take a run at a high as you get a spike through old highs with a reversal and reasons to have some concern. But, you know, I use moving averages not systematically, but as a proxy of trend. And all of the moving averages I look at continue to

support upward strength in global equity markets. And as long as that's the case, I'm not going to say, oh, all of a sudden, I'm worried about the stock market. So I continue to look at the stock market very positively. Chris, now you get the chance to agree with the legend Peter Brandt, because I know you agree. Yeah, yeah, I do. You know, I love Peter, man. He just he so much experience. And I think anybody that's not listening to what Peter's saying really, really is doing themselves a disservice. But I agree. I mean, as you know, we just talked a little bit earlier on your show, but yeah, Bitcoin continues to push higher. And as Peter said, you get worried when it kind of spikes higher on a whole bunch of talk and whatnot. But when that thing just kind of continues moving

and you don't, you know, you don't really get in a whole bunch of people are bored and whatnot. I mean, that that's what you that that's good. That's what you want to see. That's healthy. So, you know, I continue to look for Bitcoin higher. You know, I think what I think Peter said, what a lot of people are really hoping for, which is, you know, I think what I think Peter said, what a lot of people are really hoping for, which is, you know, we'd like to get that pullback. And I would definitely be a buyer if we did. But I just I don't see it happening at this moment. Now, you know, obviously, anything can change. And, you know, it's day to day kind of thing. But right now, the structure that we're looking at, off the 38,000 swing low is looking pretty good to me.

When it comes to stocks, I mean, yeah, you know, I just posted about the NASDAQ, just kind of casually, you know, printing another new all-time high right now. Not unexpected. You know, I've got counts that continue to see these things head higher here. You know, with the NASDAQ, the Dow, the S&P, all those. We continue to see really good earnings where it matters. The players that are kind of moving markets and things, we're seeing a lot of double beats coming over the last few weeks. And so, I mean, I think it's something else I've mentioned with you before. I think retail traders especially tend to get caught up in narratives and emotions. And, oh, my God,

this has been going up. It's got to pull back, right? Well, yeah, it seems like it has to, but the market's going to do whatever the market's going to do. And it's not our job to tell it what to do. It's our job to pay attention and see what it's doing, you know, and to trade along with that. We get in trouble when we start trying to fight it, when we start trying to create reasons why it has to do whatever it is that we think it has to do. And it's a difficult thing when you're a new trader, just getting in and just starting to get your feet and figure out. It's one of those things we all have to go through and accept before we can kind of move on beyond that.

Yeah, I just don't see any huge red flags at the moment in the short term, certainly, and certainly not with Bitcoin. I said to Matt Hogan this morning, it just seems like, and this scares me, but there's just not many glaring headwinds, you know, and there are a lot of tailwinds in narrative. Martin, I see you lift your mic. I was listening to Peter talking, and we must be around the same age, or maybe I'm slightly younger, but we all remember.

What's his name? The Fed chairman. His famous speech onated exuberance? That was a comment. Irrational exuberance right at the beginning of the dot-com. So the trend is real, friend, absolutely. And I don't see any big flags.

I personally think this will be the biggest bull market you've ever seen in any asset because there are so few people in crypto. We haven't even begun to scratch the surface. Mario, you're a bit robotic. Mario, you're a robot. Yeah. To cryptos, I work for Uphold Institutionals.

I have a bit of a view of what institutions are doing. And there's just so much money on the sidelines still, really chasing yield everywhere. I think one of the reasons why Ethereum staking is so popular is they don't know where to put the money. If you look at the NASDAQ, it's basically carried on the shoulders of five, six big stocks. So that's an aberration. But there is so much money waiting to get in. And what the ETF has done, the approval has done, more than anything, I hate ETFs. It's not in the original crypto spirit.

But what ETFs have done is put a stamp of approval. They sort of say, it's okay. It's like in the 70s when they had gay liberation. It's okay to be gay now. So now it's okay to buy Bitcoin. There's no more objections. And you see a ton of banks around the world suddenly adding ETFs. And what they're really adding is the Bitcoin ETFs immediately because the plumbing is there, the infrastructure is there. It is much easier for a bank, a traditional bank, to just say, let's offer this ETF than it is to offer crypto, which involves...

The second biggest department at Uphold after engineering is the compliance department. We do more compliance checks an hour. It's insane. So if a bank wants to get into crypto, that's a huge lift for a bank, especially the medium, smaller banks. Whereas if there's an ETF for it, put some in.

And the percentages that people are willing to allocate as an alternative asset is so small that even those consumers who don't realize they have it in their fund, they just don't care.

1% of whatever that is. So yes, I think that the signs are there for a huge bull market. The only caveat is the financial situation of the Bitcoin miners, which bothers me a bit. The fact that they are still selling so much at this point is a bit of a question. Isn't that normal? But isn't that somewhat normal in this part of the cycle? Because, I mean, with the halving coming, you know, they have to raise cash in advance of knowing that they're going to make less money initially.

It seemed to me the amount was more than just raising that cash. But I might be wrong. I don't see any big red flags for anything here. I'm looking forward to some more positive times and upward trends here. Ryan, it's been about three months we haven't had you on stage, so it's good to have you.

It's good to get your thoughts on the market. Calm down. He remembers us. I've got to divide for four days and you guys feel like it's three months. I want to hear about Satoshi Roundtable because I missed it and I'm having FOMO. It was absolutely, absolutely brilliant. It was just a bunch of amazing, amazing, amazing people.

It was so beautifully organized and very high caliber of people and just lots of things happening and a good sentiment in the market. You know, it's nice to have these kind of conferences in a bullish market. And so, yeah, it was really, really, really good. And then the other thing which Mario, I think you should start leaving the house more is Dubai. I mean. Did you see Mario? No, I didn't. I mean, I literally.

Come on. Every minute. I was going to go see him last night. He's been, he's been, he's been to my, he's been to my bedroom. I know he has. I know we've already, we've already, we've already bonded. Okay, cool. Cool.

Cool story, guy. Cool. Yeah. But, but I mean, it's, I mean, what's going on in Dubai when it comes to crypto is unbelievable. I mean, like I do go to Dubai quite often, but it's just, every time I go there, it's just more and more and more crypto people and more and more and more crypto stuff happening. And it is unbelievable. It made me feel like I was in New York. Oh, my gosh. Did you hear that Axe just muted him when he was about to talk bad about the United States?

Without the smell of the noise, I guess. Without what? He got censored. Without all the politics and without all the homeless people and without all the crappy US surveillance. It was absolutely

amazing. I just felt Dubai is what I think New York wants you to think it is. I hope you didn't just say there's no surveillance. I love, yeah, I don't think, did he say that? No, I don't think so. Ryan, you're saying there's no surveillance in Dubai? I love Dubai, I love Dubai.

I said crappy surveillance, I said crappy surveillance, which is all these police officers. I think there's a drone following every human that walks in Dubai as far as I'm aware. You just never see it. I love Dubai. I live here. If anyone doesn't know, I'm hearing myself echo. But Ren, maybe any key insights? I know you can't go into too much detail but any key insights from some of the meetings you had in Dubai and then maybe

a quick market update where you think the market is at now it's been what three, four months so it's been a long time we haven't gotten your thoughts

really it's a whole three days I mean no real insight other than the fact that it's business as usual bull market

I saw amazing projects really really really high quality amazing projects this time around so I think we're at that part of the bull market I don amazing projects um really really really high quality amazing projects this time around um so i think we're at that part of the blue market i don't think the scam projects are you know i think the scam projects come later i think there's some really good quality projects that are starting to raise so as a market outlook i mean we're accumulating for the next move

um you know i mean history will tell us the next move is up but uh i think i think i don't really know i mean right now we're accumulating i was hoping we'd get much more of a correction we didn't um yeah i hope there is one more big correction because there's a whole lot of things that i want to buy and i didn't land up buying them so yeah i mean if that's that's that's pretty much where i'm at what do you want to buy i much where I'm at. What do you want to buy? I want the list. What do you want to buy? I guess I need to watch the show. I have a list, which I tweeted not so long ago. But it's different for each individual, because I know I already have a very big portfolio. So these are all like top ups into

my portfolio. I mean, the one thing that is, I'm not going to say worrying me, because I understand it, but the one thing that's fascinating me is the fact that the amount of airdrops that are happening on this market and the amount of money that's being dropped on this market. Like yesterday, Dimension airdrop. Before that, Celestia airdrop. You know, Jeter airdrop. Pith airdrop. You're going to trigger Scott to talk about helicopter money now. You know that, Celestia airdrop, Jeter airdrop, PIS airdrop. You're going to trigger Scott to talk about helicopter money now you know that, Ram.

Yeah. I mean, it is helicopter money, but obviously, it's not helicopter money because each one of these is a protocol that is really adding value and just now sharing its value with the users of the protocol. I mean, we've got to ask ourselves the question whether these things are coming to the market at reasonable valuations. Like we saw the Dimension airdrop yesterday. That's a protocol that literally launched yesterday

and the market is giving it a fully diluted valuation of $6 billion. Now, I don't know, like $6 billion is the same valuation you give a listed equity, you know, with real profit share give a listed equity, you know, with real profit share. Yeah, and you don't give that to those. Well, you could. Right?

Theoretically, Scott, theoretically you could. Theoretically you could say that. Right. Yeah, there are, yes. Instead of paying a marketing expense to acquire its users, Disney or Netflix could say that its subscribers, if you subscribe, you'll get some of the equity. Now, the SEC won't allow you to do that. But theoretically, you could say it's the same formula, right? You could say, look, if you were starting Netflix

today, you could say the first million subscribers to Netflix will actually get 5% of the equity of Netflix. And that is completely viable. I mean, the SEC doesn't allow it, but it is completely viable. But what's worrying me is these airdrops are coming and then the protocols are launching, but they're launching a ridiculous valuation.

So the valuations are like, as I said, Dimension came on at a valuation of $6 billion yesterday. Yeah, I mean, that's full bull like, bull market froth, and we haven't even started. Yeah, not only that, not only that, I'm just thinking to myself, like, like, which investor, real investor, not retail, but land that are buying airdrop, is actually investing in this protocol at a $6 billion valuation? It just sounds like, and I'm not, don't get me wrong,

I'm not picking specifically on this project, right? I just think that some of these valuations for some of these projects just are absolutely, absolutely ridiculous. And maybe not. The market is pricing them as if they've already succeeded, and they're literally at startup phase. I mean, literally the protocol started yesterday. They even had problems starting up the validator node.

Yeah, doesn't that mean people should just dump their airdrop and move on with their lives? I mean, why would you not sell the airdrop if it's at a $6 billion valuation? That's what they're doing. No, they're not. If you look at many of them. Yeah, I'll tell you why. I'll tell you why. Because everyone's thinking maybe it's an experiment they're doing no they're not if you look at many of them yeah i'll tell you why i'll tell you why because everyone's thinking maybe it's going to go higher because maybe this whole market is just going to continue to go higher and that's that's

what's going on here that we're in like and again i don't want to pick on dimension because actually dimension is a very very very smart protocol i don't think we should get into what it does it is quite technical i. I'm using it as an example of a protocol that was literally born yesterday and is valued at $6 billion. Now, show me, I mean, let's maybe have some comparisons. Who can maybe name one or two companies that are listed on the NASDAQ with a $6 billion valuation? And let's see which one we think is more valuable you know zach go ahead no but shoot actually before zach before you speak exactly one quick question ryan what happened to that solana decks what's the because i was watching that one since you were

trading it later yeah so remember i told you i put my orders in at 51 remember i put orders in at 51 because it didn't hit yeah exactly did it did it hit that number it hit 51 it hit 51 yesterday Remember I told you I put my orders in at 51? Remember I put orders in at 51? Yeah, exactly. Did it hit that number? It hit 51 yesterday, or just after Solana went down, it hit 51. I've got my order, and I think it's back up at 57 now. But again, okay, so let's look at that. That one is actually a very, very, very highly utilized, decentralized exchange, right? Or exchange aggregator.

And that's trading at a $5.7 billion fully diluted valuation. That's like... What's Coinbase's market cap? If someone could just look up Coinbase's market cap? I'm driving, so I don't have access to...

Great, great, great. So it's $28 billion. Okay. So it's one-fifth of Coinbase's market cap. And that's for the token. That's a token. You're talking about Jupiter, yeah? I'm talking about Jupiter, yeah.

What do you think the market cap should be then? Is it a quarter of coinbase under a billion it depends it depends in the you know it's all relative valuations if you're willing to price either other protocols at x then relatively this one actually looks okay but then like for me like to be honest i bought it as a trade knowing that it's going to touch 51 and bounce but it's not something i'm going to hold in my long-term portfolio. How do you buy something? How do you get your first entry at $5 billion?

That sounds weird to me. Sorry. Especially, like you said, when you're comparing, if you're as deep in this market as you are, the opportunities are the thing that's under $ million and goes to 5 billion when people start buying it. I can understand for an average person who's looking for a slower game, but like, and I'm not encouraging this, but like those who are looking

for the massive moves to the upside, that's not the place to start. That is both. I'll tell you another thing, which clicked, and I'm actually going to do a show on it tomorrow. I was going to do it today, but I just landed too late and everything just fell apart. So we look at projects, and as a retail investor, what you say is, okay, the project's coming onto the market.

And then you say, oh, well, you know, I'm going to invest in this project because Pantera invested or because Polychain invested or because Multicoin invested, right? And then that for you is a proxy. And that proxy actually tells you that it's safe to invest in this project, right? So how many times is... And be honest, because I know everyone thinks this. How many times has an investment...

You've seen a token listed and you say to yourself, this must be a good project because Jump Capital or Polychain or Multicoin are actually investors. Be honest. All the time. All the time. Okay, so now what I think most people don't realize is the following.

Usually when Multicoin invests, I'm going to use Binance Ventures and Coinbase Ventures. And I'm going to use a project like, let's say, Celestia, which, by the way, has a $15 billion market cap or $13 billion market cap. Right now, what the average retail investor is saying is they're saying, look, let me buy this project because Multicoin or Binance or Coinbase are investors in this project. Therefore, it must be a good project. What they're not doing is they're not doing a calculation that says, hold on, these guys are getting very, very, very early access. So the fact that Polychain is an investor,

they got in at a fully diluted market cap of $20 million or $50 million. Now the project's on the market at $5 billion. These guys are at 100x, 200x, 300x on their money. And the average retail investor is saying, oh, I must buy this project because Polychain is invested. No, no, no, guys. Polychain was invested at $50 million. At $5 billion, Polychain are now thinking to themselves whether or not they should be dumping.

And so this is the, it's a massive disconnect which happens in the market. It's a massive, massive, massive mistake that happens in the market, where retail is looking at a token and saying, I should buy this token because the strong VC is in it. What they're not realizing is that the strong VC got in 100x ago.

And so at this level, the strong VC is probably looking for the exit. Yeah. So just to get it right, and that can't be away for a long time, what you're saying is that those strong VCs, and I'm going to ask a dumb question because I missed what you were saying, dropped out a bit for me. What you're saying is that those VCs, those strong names,

get it at a really good, at a big discount. So they're looking at an exit by the time other VCs, other wrestlers get in. Is that what you're saying? That's exactly what I'm saying. I'm saying that – Actually, I'm impressed. I just want to give myself credit.

I heard literally about 10% of what he said, and I got it right. So it's credit to me. But go ahead. Yeah, but I mean, I just think that I hear too many investors talking about, like, oh, I must get into this project, you know, because Binance Labs – Yeah, but you always – but yeah, but Rand, you always, you always ask, we just did that with a project a week ago.

Always ask what valuation did X, Y, Z. We got into a project that Pantera with a lead investor. I know you do because you're a VC, but I'm saying

the average retail investor when a token hits the market, they're saying the same thing. Oh, okay. But they're not paying attention to the fact that the VC is actually, you're probably the exit liquidity for the VC. No, it depends.

It depends. I want to give VCs some credit as well. A lot of these VCs like Pantera and Amoka, I see Terrence and David are giving you a thumbs up. But guys, I just want to point out, a lot of them have big lockups. As I said, our strategy, for example, once we get offered tokens, we always have a strategy and I'm kind of giving it out there. So projects listening will expect us to do it. We always do it. Whatever offer you give us, we'll come back asking for more and offering to lock up for longer.

Always. That's the strategy we do. So and others don't even, you know, they don't do the same strategy, but they have long lockup. Animoca and Pantera being two examples out of and reason. Bless them as well. Yeah, I agree with what you're saying, but I think you're making assumptions about how smart the average retail investor is. And what I've been seeing from talking to these retail investors and specifically interacting

with them quite recently is that they're just saying, oh, I need to buy this token because a good VC is invested. And they're not saying oh but a good vc invested 100x ago and i'm buying it 100x they're not saying would a good vc actually buy this token right now that they're not asking that question yeah yeah i think i mean just to agree with you both i think it's always a bad investment strategy to invest in something only because you've seen a VC take a token allocation. But to Mario's point, I feel like the token lockups and transparency for a lot of projects has gotten better, certainly since like, I don't know, 2018, if you look back at

kind of how much information was provided for exactly when VCs might be locked up. But you know, sometimes it also works in the opposite direction. But I did like Rand's point about the idea of, you know, airdrops who are leaning into actually making sure that those tokens go to their most involved community members or users. And to answer the question, I mean, if we're talking about a $6 billion market cap overnight, that would be on the scale of about a Levi Strauss. So everyone knows the jeans company. It'd be as if you kind of created that overnight. But of course, you know, I think the most interesting point, and I liked what Peter was saying early on, which I haven't talked to you, Peter, since we were back on Yahoo

Finance when I was an anchor over there. So good to chat with you again. But I mean, evaluations in all of this is looking at how far future incomes might grow, right? And so obviously, a Levi Strauss making denim and jeans, there's only so much you can do to have growth in that business. But if you're talking about a DeFi or a DEX exchange that's going to be growing massively,

it's an entirely different story there. So I don't know. Zach, I want you to finish, but I want to interrupt you on this one because I had that exact discussion with my team today. So I've got another company, for anyone who doesn't know. It's an e-com health and wellness brand. I'm not looking to sell.

I've had it for 12, 11 years. Passive. Zero involvement. So I wanted to kind of explore the possibility of selling the business. Unlikely, you know, 10%, 20% chance of selling it. So I'm valuing it and then the valuation multiple relative to ibc which my other company raising capital and planning to go public later this year is ridiculously different one of them has been there for 11 years built that brand in over whatever 10 20 countries

and the other one ibc has been there since 2017 and the valuations are incomparable it goes back to the point exactly the margins are not the same the positive the growth potential is not the same and so comparing jupiter to levi's is not comparing apples to apples yeah exactly it's not i agree not apples to apples but also i mean like i think you know when you think about just the narrative and breaking it up right the discussion around airdrop projects versus something like a bitcoin versus what i think a lot of people who are listening might be excited about which is kind of what's the next Solana. So I was looking back at the numbers. If you look at 2021, so just go back three years, right? And maybe you got $1,000 to play with. You could have put it in

Meta. You could have put it in Bitcoin. You could have put it in ETH or Solana. Basically, you're about the same return if you went with Meta, Bitcoin, Ethereum. It doesn't really matter all that much. Solana was $14,000 you'd have today but $1,000 into it three years ago. So I feel like the big question when you're comparing all these things is what's the growth potential? What's the risk factor? And what's going to be that next Solana for the next three years? And how should people allocate? And I feel like that's, you know, constantly something for people to keep in mind when they're looking at, you know, different risk profiles across these projects.

I want to agree with you. I want to agree with you. I just, I have the benefit of seeing some other industries and being involved in other industries. And, you know, a lot of the investments that I've seen, I'm not a very active investor, but I certainly have been looking, like I've been looking at AI investments. I've been looking at other technological investments. And the one thing that I understand the theory behind, but I can't reconcile is how in this industry, protocols are going from a valuation of zero to 6 billion in like one year,

whereas I'm not seeing that in any other industry in the world like even in ai which you could which you know you could kind of say that ai is um maybe as exciting and probably will have the same amount of change on humanity as as blockchain and stuff like that maybe in just different areas or even in biotech or biohacking or whatever else, right? How many companies have you seen in those verticals in less than 12 months achieve a $5 billion and a $10 billion fully diluted vertical? That's because we print the money and make it liquid instantly. I think that's...

But, I mean, ultimately, the last... Ultimately, the valuation equals the valuation. Whether you make it liquid now or make it liquid later, as Powell said, you may be eating now at the expense of the future. But what is it about this industry? And I know what the theory is. The theory is that we are creating open source protocols with network effects. That's the theory.

And that doesn't exist in any other industry. But because I have a view of other industries and I see all this, I'm going, how is it that we are the only industry that can build multi-unicorns in less than three months

and six months? I see protocols $1 billion for a diluted valuation less than 12 months old. Why am I not seeing any other industry? There are three reasons, I think, in crypto, why we see that way you don't see in other industries. One is the liquidity of the tokens, right? Which you don't see in other early stage businesses.

And so you have the potential for early stage VC-like returns, but without the illiquidity of traditional early VC investments where the stock is closely held for a long time. I think the second is there's a lack of real cash flow. And so things trade on narratives, right? All right, hold on. Wait, wait. Let me address point number one first. You're saying because we create immediate liquidity, our protocol should be valued much higher than a fully diluted value.

They are, not should. It was a totally liquid market for pre-seed startups. I think you'd see wacky stuff there too. The thing that's different about crypto is it's liquid pretty much right away, which you don't see in high growth, early stage startups. Hold on.

I want to make sure I understand this. If I was an investor in Airbnb in the first year when Airbnb Hold on, I want to just, I want to make sure I understand this. If I was an investor in Airbnb in the first year when Airbnb was launched, going back to, let's just cast our minds back to the first year when Airbnb was launched. Are you saying that if Airbnb became liquid on day one, I should have given a two or three

or $4 billion valuation versus the fact that he was struggling to raise capital at a $40 million valuation back then? Just by virtue of the fact that it's going to be liquid. That was a different time. But if you had a very hyped startup today, let's say Sam Altman does a startup today and the shares of that startup were publicly traded and available on Robinhood from the pre-seed and people could bid it up and people could dump it, I think you'd see really crazy valuations really early on. Yeah, but you don't have... So all these blockchain products are the equivalent of some ultimate projects? I'm just trying to work it out.

No, no, no. So I think it's three things. So one, I think is the early liquidity. I think two is the lack of cash flow or necessarily expectation of cash flow. There's a moneyness. And so you have something that is between investing and gambling, right? These things trade on narratives more than they trade on fundamentals. And so the liquidity plus you can put whatever story on it you want allows you to imagine and defend in your mind really crazy valuations. I think that's a big

part of it. And then third is like, this is a sector which like the narratives that are out there. You'll agree with me, Zach, you'll agree with me, you'll agree with me that just because a bunch of gamblers can speculate on the value of a token doesn't actually make the underlying token. Of course. Yeah, I think the point is, is that the people who are buying and selling these tokens aren't looking at the valuation and don't care. They're just looking to see if the token goes up or down for any given amount of time. But Scott, these speculators are not dumb people. Many of them are basing it on what they believe the underlying value of the token or the project can become. I don't think so. I think 90% of them are just trading.

And even smart investors, some of them are taking long-term positions in protocols that they really believe in. But a lot of them are doing a play on the early liquidity, right? It's a greater fool theory. Listen, this thing is going to be really hyped. I'm here with you. I'm here with you. It's a great opportunity. I'm here with you.

One last thing I think that's important for this dynamic is the float on these things tends to be minuscule. Because of these lockups, some of the lockups are legally required. Some of it is good for the health of the protocol. But it also means that the fully diluted valuation you're looking at for these tokens is really not reflective of what's going on in the market. A tiny, tiny percentage of the tokens are trading. And if all of the tokens were unlawful, you would see – But that's a scam. I'm not defending any of it on loss. That's a scam. But that's a scam. I'm not defending anyone.

Yes, it is a scam. That's equivalent as if Netflix would say, look, we know that we're going to one day issue 100 million shares to the shareholders, but right now we're only going to issue 1,000 shares. And if you want to just go and bid for the 1,000 shares. And by the way we at the discretion of the team can unlock and we'll tell you there's an unlock schedule and if we

want to move it we'll move it because that's what these protocols actually do so like i'm just like what what don't get me wrong very bullish in technology don't get me wrong uh uh love the industry but i'm also realizing what scott told me a long time ago which is we're actually Don't get me wrong, very bullish in technology. Don't get me wrong, love the industry. But I'm also realizing what Scott told me a long time ago, which is we're actually living in a game, and we should be playing the game. And the rules of this game is that fundamental valuations don't actually matter at all. The rules of this game is you are playing into the utmost of gamblers.

The one thing that doesn't matter in this game is the actual real valuation of the protocol. The only thing that matters is how well they play liquidity and how hot the market for gamblers is. I mean, let's just be honest. I mean, we should just, I know we all love crypto and that, but let's just be honest about what's actually going on here. Yeah, I think that was... I disagree. I think you're right, but you're being too binary. I think underlying value still plays a key role. A lot of the top projects right now, top 50 coins were considered gambles with a greater fool theory a few years ago. Now suddenly

the value is warranted because they achieved their miles. So I think it's a bet on the team, bet on the potential. Can you tell me how Dimension is worth $6 billion? Can you tell me how Dimension is worth $6 billion? No, I'm not invested. No, I think it's overvalued, but I also don't think it's impossible they'll reach that valuation. It's just a bet I wouldn't make.

I think that's also Zach's point. But I know nothing about Dimension. I don't really care. Simon, I see your hands up. You've been here for a long time. Full disclosure, I know you're Dimension. I don't really care. Simon, I see your hands up. You've been here for a long time. Full disclosure, I know you're an investor in everything. Maybe you want to just give me some perspective here? Yeah, no.

Full disclosure, Simon will definitely agree with you, right? All right. Well, Martin was here. Full disclosure, I'm a shareholder in Uphold. Can't hear you. Are you being serious, Simon? You've got to stop doing this but to give you intel on that

Uphold for example who was just on the stage I invested in their seed round in 2015 and that was 125 million valuation, real business and it was one of the most expensive seed rounds or

early stage companies in our sector. At Bank to the Future, we've got markets in 100 different companies in the industry. So we get the difference with the tokens and Bank to the Future is regulation arbitrage. We have to do full disclosure. We have to provide the financial data of those companies when it's available. And we have to onboard people in a way that is compliant. So that makes a significant difference in terms of just those market dynamics. So there's a real disjoint.

For example, Ripple Labs, their equity, you could buy that on Bank to the Future for about $10 billion valuation. And it holds over $20 billion of XRP on the balance sheet without everything else within the company. But I mean, let's not talk about Ripple because to me that's a function of how many dumb investors. Ripple to me is the dumbest arrangement on the market. I've said it publicly. I'm saying it again publicly. That's exactly what we're saying with the valuations of all the other stuff, right? Well, no.

Let's not talk about Ripple because I'll say some things here and then they'll send me legal letters and stuff like that. So I don't want to talk about that. Yeah. The point was just the difference in the equity value when you actually have to disclose, you know, what value is being created in terms of finances versus a token that has nothing you can analyze it for. I just want someone to tell me why dimension is worth six billion dollars that's all i want i just want someone to say to me this is not this is this is how we did the mathematics this is why we feel dimension is worth six billion dollars when you

say jupiter is worth five billion dollars i said okay it's one-fifth of coinbase it does generate trading fees it's got a whole lot of users already. It is the biggest DEX on Solana. Okay. You know what? There's a relative valuation versus Coinbase. You can kind of do a discounted cashflow on their fees under certain assumptions. I do think 5 billion is reasonably aggressive, but I can kind of justify it. But 95% of the other projects out there, and I look at them and I go, are you fucking kidding me? Let me ask you another question. I'm looking right now at Cordana, right? The market cap of Cordana. Let me just give you the market cap of Cordana. Just

hold on a second. The market cap of Cordana right now is it's $21 billion. How much was Doge worth at the top, right? Doge's $11 billion now, I think. $11 to $12 somewhere. But that was multi-deca-billion.

People are not looking for fundamentals. That's been true. Okay, but then we agree that this whole game has got nothing to do with fundamentals. All it's got to do with is reading sentiment and reading sentiment in the casino. We're just playing a game of sentiment, which has got zero link to fundamentals.

With the stock market, I can say the following. There is an element of fundamentals and there is an element of market speculation. And the two, to some extent, there's some correlation. Like I can say that, yes, of course, there's hype in markets and we're playing the market game. But then I can always correlate back to fundamentals and say, you know what, this company has a turnaround strategy.

It has an acquisition strategy. In this game, I'm looking at it and I'm going, there is zero fundamentals and all you're playing is narrative and hype. And how do you, how do you, but you're talking about Doge, Mikkel, I heard Ryan call XRP a piece of shit. So if you want to come up and respond, you're welcome to Mikkel. But Ryan, how do you value, you're talking about fundamentals and publicly traded companies. How do you value something like Doge where you've got people like Elon supporting it, possibility of integration within Twitter and a very, pretty solid community. Disclaimer, I'm not an investor in Doge where you've got people like Elon supporting it, possibility of integration within Twitter and a pretty solid community.

Disclaimer, I'm not an investor in Doge. I've never invested in any meme coin and I don't believe the value is warranted. I'm coming more and more to the realization that, you know, meme coins. Let's go to the complete extreme. The complete extreme is meme coins, right? Like, why was dog whiff hat? Why was whiff dog whiff hat? I don't know what it was priced at,

but priced at a couple of hundred million dollar mark here. I mean, can we just agree that that is absolutely ridiculous? Can we just call a line on that? Yeah, I think that that was Zach's original point too. I feel like there are fundamental valuations for projects that have been around and have the liquidity. And I feel like the one rule that you were calling out was no one should believe market cap valuations for these small airdrop projects. And Scott's point, I think, is well taken. No one really invests that way.

Like, FTT is a perfect example that everyone should definitely remember and remember pretty well about the risks around this is when there is no real liquidity there. Believing that these valuations are real is the biggest mistake any investor, whether you're a professional investor or retail investor can make. And the same game that was being played with FTT is probably being played by a lot of these smaller projects. But those shouldn't be compared in terms of valuation numbers with a Bitcoin, which has a real narrative and real numbers.