The Wolf Of All Streets - Massive Bull Run Ahead: Bitcoin To Skyrocket To $500K By 2028!

Starting point is 00:00:00 Let's go. Massive, massive bull run ahead. Bitcoin to skyrocket to $500,000 a coin by 2028. Currently, this is the forecast of Standard Chartered Bank. We're going to discuss that. But I have bad news. Scott Milker is not with us today, and maybe will never be with us again. With recent market activity, he has panicked, sold all his bags, turned it all in cocaine and fled to colombia

Starting point is 00:00:46 so we don't know if we'll be able to relocate him but until such time i've sort of been left holding the bag here and trying to do this show and so joining me today uh actually is really good news we've got uh an immaculate uh famous infamous i should say troll Tom Dunlevy from MV Global how are you doing Tom doing fantastic man um I thought Scott sold the top a few weeks ago and he's sitting in a yacht somewhere in Puerto Rico but yeah maybe uh he's gotten some other I mean look what he said was that he went skiing but I think we all know that that's a euphemism. That is what the kids call it nowadays, I'm told. So that makes sense.

Starting point is 00:01:32 So, Tom, really interesting stuff going on. I woke up this morning and I saw a tweet from you, and I'd like to start there. And then we'll get to $ 000 bitcoin and beyond and the tweet from you let me try and quote it so no no no project in crypto needs to raise more than 10 million dollars full stop i frankly think that a lot of these big projects barra chain monad abstract chain infinex movement labs etc get their valuation strictly because of the need for big capital allocations and large VCs. The large VCs raised way too much money, you say, and now they need to figure out some way to deploy it. And so they convince all of these funds to take way more

Starting point is 00:02:19 capital than they need. So do you want to explain yourself? Sure. So at a high level, I think we've come to a place in the industry where you have these massive funds, your funds that raise three, four, 500 million, even over a billion dollars. And when you're a fund, and you have that much money, you have to write a 2030 40 $50 million check, even if you're doing $5 million checks, you got to do 50 plus of those, that's really untenable. So you need these big projects to actually deploy into and i'm not sure if space is there in terms of projects actually needing this much funding we are in

Starting point is 00:02:56 a space where you have low marginal cost software yes it costs money to you know set up different validators to incentivize youize development in the ecosystem, pay for hardware costs, to pay for R&D. But it doesn't cost, you see here, Monad raised almost $250 million. Bear Chain, over $100 million. Movement Labs, $150 million. That is like five plus years of runway for these guys, if not more. And it provides a few really negative things for the space.

Starting point is 00:03:22 It provides very perverse outcomes or very perverse incentives for the team to actually build right if you have 20 30 40 plus million dollars in the bank it's really hard to be really scrappy and say like okay i gotta go get that next customer get that next user etc it also marks the valuations up to a place that makes it really untenable for retail to actually enter in and then it also brings the actual uh valuations up to a place that makes it really untenable for retail to actually enter in. And then it also brings the actual valuations up to a point where you're marking into user growth and user acquisition metrics that are probably five to 10 years in the future. If you just look at Barrett Chain's launch today, it's trading, I don't know, I think like 10 billion or something, F almost or movement lab same thing.

Starting point is 00:04:11 Those are like S&P 500 plus type numbers for brand new protocols that weren't even in existence a handful of years ago and really have no no net new users outs or outside of the people who have been incentivized by yield farming to throw their money on the platform and try to get an airdrop. So what I'm saying is we need to lower these valuations, lower the rounds materially to actually fit where these projects need to be funded. Well, I have a lot of questions and some comments as someone who's actually building in this space. But before I get into those questions, let's put a little bit of context here. So how many of these sort of large VC funds are there?

Starting point is 00:04:46 Like, you know, they've raised multi-billion dollar routes. And how much capital do they still have to allocate? So in aggregate, there's at least five to 10. In terms of how much capital they still have to allocate, from what they raised in 21, 22, you can say probably at least half of that, if not more. So there is a large amount of capital still remaining and they need these big projects to deploy. So who are we talking about? We're talking about Paradigm, A16Z, Pantera. Who else?

Starting point is 00:05:19 Polychain, Journey to Fly. You can just get on the list of the top 10 VCs and see how much there is. I think Polychain or Paradigm raised a two billion plus dollar fund in 2021 yeah so so so raising right these guys are still raising now so they've raised their last fund and now they're raising their next fund so right and what i think we've been seeing is that most of these sort of funds being raised now are substantially smaller than the funds that were previously raised. That would seem to indicate that the funds are not have not been performing well enough to sort of raise the same kind of money again. I think the funds are right sizing now and they're probably still too big. If you look at the space right now, ex Bitcoin, we're at what, like a little over a trillion dollars. If you have, you know, a few,

Starting point is 00:06:06 you know, 10, 20 billion, you know, let's call it around half a percent to a percent of the space is invested in venture versus the liquid markets. That's a lot, a lot of money. That's way more than traditional finances in terms of the aggregate market cap versus the actual venture dollars deployed. So in terms of what, and this is an industry where the marginal costs are supposed to be lower. So in terms of the deployment of this capital and the recognition of the upside for LPs, and then the downside for retail, you know, and the space is starting to recognize this, the trade-off is just not there. But, you know, I'd love to hear as you as a builder, your feedback and how you see this and, you know what what generally you think of these costs so i'll get

Starting point is 00:06:49 into that in a bit but first i want to sort of continue just looking at this from the perspective of a vc for a moment so one of the things that you said in the tweet is that these projects are being funded at valuations that fund them at perfection in other words nothing goes wrong and 10 years from now if nothing goes wrong they should be valued at these at these valuations but i i think that if if you actually have been looking around crypto um very few projects um sort of uh grow consistent grow their valuations consistently. Instead, what we've seen very frequently is that projects come out of the gate roaring, right? So today, BarraChain came out of the gate, $5 billion FDV. So they raised probably a little bit over 100

Starting point is 00:07:42 million, right? I think the rumors were they raised a little bit over 100 million right uh I think the rumors were they raised at um a little bit over a billion FDV in the last round or am I hearing the same things you're hearing right so they've been storming out of the gate at five billion and then you can say all right well but what have they produced right what are their what are their revenues where are their users and then I would report why does that matter that's not how this industry prices anything i mean look at the biggest sort of projects after uh um you know like if you look at the top 10 what do we got 140 billion dollar uh market cap not ftv market cap valuation like something like a a a I don't know, we're looking at something

Starting point is 00:08:25 like 250 billion FTV for Ripple for XRP, right? We've got something along the lines of 40 billion, maybe, maybe even 50 billion FTV for Cardano. So what do you think? Like the valuations here, I think the VCs are basing their expectations on those types of valuations. That's what they're trying to hit. I mean, that's literally their job. The market seems to be the problem, not the VCs. Yeah, I think it's a recursive cycle because as the VCs mark these prices up, the benchmark becomes higher and the bar for competition becomes higher for each subsequent race. Now, just like context is really important here.

Starting point is 00:09:13 So if you just look at like the S&P 500, the 500 biggest stocks basically in the world, we'll just use broad numbers. At a launch like this, BearChain and movement Labs is in line with like Moderna dominoes Dollar General these are companies that are making you know hundreds of millions of dollars a year Molson cores like producing ridiculous products have been in existence forever having you know you know real businesses yeah what I'm saying is like day one these things should not be valued this high it just doesn't well okay so let's talk about the the big elephant in the room right why does everything or anything in this space have the valuation it has and that's because of the big boy in the room right 70 if you

Starting point is 00:09:56 if you pull out uh stable coins 70 plus of the value in the industry isn't just one single asset, and that is BTC. And today, Standard Chartered come out and say BTC to 500k, right? So that would bring us to 10 trillion market cap by 2028. So that's three so let's let's attack this from two verticals one right what everyone is interested in is it actually going to be a 500 coin by 2028 or before our price prediction for the end of this year is 250 000 so could it get another two or three years from now to 500K? Sure. If we just, again, just put this in context, we've gotten, let's just run down what we've

Starting point is 00:10:50 gotten in the past two months. We've gotten a pro SEC chair, a pro CFTC chair, a pro FDIC chair, the repeal of SAB 21, which constrained all banks effectively from custodying and or transacting in crypto. Numerous ETF approvals, this formation of the crypto council that's purchasing potentially some sort of strategic asset stockpile for digital assets. If you said any one of those individual things in the past two years, it would have set Bitcoin price up 30% on each one of those bits of news. We're getting so much good news that we're not putting in context what this means for the industry, which is a ridiculous amount of capital flows from institutions in the next three to six months.

Starting point is 00:11:32 So this price target seems fairly lofty. But as you very well know, the supply is constrained. And when you have all of these buyers, particularly the institutions who are going to incentivize retail to buy this stuff, they're now on our side and they're going to be pushing this stuff. So it's going to, I think directionally it's correct. It's very, very lofty target, but you know, I think the numbers in terms of growth make a lot of sense. Yeah. I mean, look, 250K would take us to, you know, two and a half X where we are now. What does the, what are the people listing thing? Right.

Starting point is 00:12:10 Well, that, uh, w w w will we end this cycle only two and a half X, uh, where we are now, are we going higher? And so, so I think that's sort of like being the big elephant in the room. Frankly, I think we can potentially get in the fire uh donald trump is talking about bringing down the 10-year yield significantly that is going to flood the market with liquidity like you said we're not even taking into account the um hype that is happening from um ai right now so we're likely to see you know sky-high valuations across the market not just btc and what do you invest in

Starting point is 00:12:46 if you want to invest in AI actually BTC looks like a very good bet it's a scarce asset in a world which is going to see uh substantial uh valuation gains um and um it's uh likely to be one of the assets which is used by AIs in order to pay for things like computing energy so um there's all kinds of flows that are going to be coming to Bitcoin and Bitcoin in the crypto industry has been sanctioned by the US government for the last 16 years and now we have you know this this new US government which is not only not sanctioning it but is uh saying again and again our top priority is basically number go up so uh people post your comments let us know what you're thinking um but tom let's bring this back to the big mystery

Starting point is 00:13:34 that everyone has and sort of what we were talking about the valuations it feels like in this market uh basically only two things have been benefiting btTC and bullshit BTC and sort of like these meme coins, right? So it's this barbell BTC up bullshit up everything else sort of dying on the vine. Why do you think that is? So we're having 100 X plus the amount of tokens that have been launched in previous cycles. And we already live in a fractured attention economy. Just real briefly on the chart on the screen for folks who think we have just a lot of

Starting point is 00:14:11 hopium here, and you've probably seen a version of this chart, but to put it in context, this is Bitcoin each cycle from the bottom. So you can see the first cycle, yes, 500x up, next cycle 100, next cycle 20X. So far we're about 6X. So this is happening with a lower amplitude for sure, but it's very, and we're at the point in the cycle where you've seen sort of these inflection points and actual price action.

Starting point is 00:14:35 So it's very, it would be very much in line with past cycles to get another three, four X from here without even considering the institutional flows or retail flows via the ETFs, etc. So we're still on a very reasonable point based on last cycle, even in previous cycles based on the lower. And they were basically tracking last cycle almost one to one for Bitcoin, not for the other assets. Correct. Bitcoin. And this goes to your question then, what happens with alt season right now? And this goes to the fractured attention point. We have not only fractured attention in

Starting point is 00:15:10 our everyday lives and across social media, but fractured attention because of the pump.com fund and meme coin. And hey, immediately the president mentioned something, let's launch a new token about it and hop all the money of capital. So my mental model really is that strong barbell, but it's going to be even more pronounced than we think. So it's know, my mental model really is that strong barbell, but it's going to be even more pronounced than we think. So it's going to be a handful of majors and you see, you know, Ethereum and, you know, other, so we even now trying to enter that majors discussion and there's going to be some very use case specific stuff for folks who are very specialized. So, and people tried to suss this out with AI and find out what that was, but still maybe too early

Starting point is 00:15:43 to actually find individual use cases there. But this whole middle of tokens is going to really struggle because who is the marginal net new buyer of these things who hasn't been on chain yet and is going and finding like, you know, the 200th market cap deep end token, because they've sort of sussed out, like, unless you have this cycle of use case narrative adoption um you know pump within the the community of attention then your token just becomes lost in the noise so all of these protocols that are in that middle are really going to struggle so you need to latch onto a use case you need to find a community or these things are really going to just go slowly to zero um

Starting point is 00:16:23 from you know and and this goes to the earlier. Isn't this what maxis have always been saying, right? Maxis, including myself, saying that over time, basically everything just gets sucked and stripped off into Bitcoin and the rest of these things get to zero. And now maybe we are at that tipping point, right? Because suddenly Bitcoin is being adopted by the largest financial institutions. Signum Bank, a Swiss bank focused,

Starting point is 00:16:50 like they've been growing like crazy. They recently hit a unicorn valuation. Basically a Bitcoin focused bank out of Switzerland have said that if just $1 billion, which is nothing in comparison to what people are talking about for the sbr if just one billion dollars of a strategic bitcoin reserve uh were to be purchased that would mean that the price would surge by 20 billion right so they're basically uh um assuming a ratchet here or a leverage of of price appreciation in the entire Bitcoin market

Starting point is 00:17:25 cap of 1 to 20 on each purchase. Every dollar that goes in is going to send the market cap higher by 20x that dollar. Totally reasonable and makes sense because the vast under allocation to the asset class here and how in the broad scheme of things, still how small it is. This is not only, so the strategic reserve is something that I think is 100% going to happen. I've called for this for a while, but also these state level strategic reserves. I think we have 17 bills in these state level congresses. So you are going to get at least a handful of those passed. I don't think all of them will be, but that, And the individual pension funds within the US have

Starting point is 00:18:05 a ridiculous amount of capital. The pension funds of California, New York, Texas, et cetera, have more money than the majority of countries out there. So even a very small allocation from these guys produces a ton of inflows. And then you have the game theory effects of countries saying, oh, crap, I'm behind the eight ball here. I got to start putting money in. So things don't move as fast as we'd like them to unfortunately because traditional finance and institutions move in quarters not days like we do so it's it's very cliche to say zoom out but like the whole list i ran through previously and then all of the different uh and actions that are are in place

Starting point is 00:18:43 right now in terms of these uh direct purchases for bitcoin is is very powerful it's very very powerful what are your thoughts on allocating to projects specifically in the bitcoin ecosystem right we've got babylon are going to go to market probably sometime soon their token's going to hit the the exchanges right they've got um billions of dollars in Bitcoin which have been sort of pre-placed in in their pre-placement program we've got a whole bunch of Bitcoin roll-ups you've got Bitcoin OS of course um you know there's significant there's crazy things happening to Bitcoin Bitcoin is becoming a fully programmable layer as we speak are we just gonna to see a shift from sort of all

Starting point is 00:19:25 of this other ecosystem stuff into Bitcoin because it's like clear Bitcoin has won but we're still going to need applications um we're still going to need kind of web three type of things but they're going to be built on Bitcoin so are you allocating there so the struggle I have and I'm sure others have this is I think everyone recognizes Bitcoin is the biggest economic settlement layer by weight, by mindshare, and therefore the most secure. The issue is we've talked about these upgrades and changes to Bitcoin for quite some time. So one, handicapping how real they are, and then two, understanding the nuances of the technology behind it is a very big challenge. So I think a lot of allocators in the space

Starting point is 00:20:05 are very much wait and see in terms of what actually will happen with a lot of these fantastic L2s that are being developed. So personally, it's just really hard to parse it. So I turned the question back on you and ask, how do you make folks understand sort of what is being built here? And then what is the timelines actually

Starting point is 00:20:26 realizing and and having something people can kind of tangibly touch and use and be excited about uh well um like I think it's very real what I mean think I know it's very real like we've we've had so our team we we managed to demonstrate zk verification on bitcoin um several months ago and where you know that was a hard-coded zk verification took 54 transactions we've now gone down to six transactions we expect to get it down to two so um so it's very real um testnet for us is coming out soon um babylon have seen um uh i think it's um six billion dollars worth of btc flow into their system before they've even launched and they're about to launch there's a whole bunch of projects that have been built on them some of them multi-billion dollar projects

Starting point is 00:21:17 not to mention there's multiple you know bitcoin there are two projects so i think it's very real and actually i want to come full circle maybe you and i after this we can chat a little bit about about what i actually see happening in the bitcoin ecosystem um we can have a conversation about that but back to your original tweet right you asked me as a builder what do i see i think from a tech perspective you're right um you don't need that much money in order to maintain these systems however i think in crypto there's two weird things one you get one shot to raise capital um and then you're basically ipo like the first thing you do is ipo

Starting point is 00:21:56 that was that was your shot and then the second thing is going to the heart of what you were saying, it's all about attention. And so most of these projects, most of their spend is marketing spend. That's why you raise the big capital. 80% of it is going to marketing. And so basically we're in this arms race of who can sort of spend more on doing crazier things or sneakier things in order to get attention. And yeah, the best marketing is making people money. And it's almost impossible to make people a lot of money when the protocol launches at a $5 or $10 billion RFTB. I think the notable exception would be Hyperliquid, but they airdropped 31% of their token to users.

Starting point is 00:22:38 So that was their marketing. Yeah, but that's just as expensive as raising huge huge amounts of capital all right so let's bring this to a boil let's bring this to an end we've spoken about 500 000 uh bitcoin uh btc price um from standard chartered signum bank saying that's going to be peanuts us saying everything about this sounds realistic and now eric trump jumping into the ring saying he thinks it's a good time to enter BTC what do you say Tom now's the time to press the buy button this this

Starting point is 00:23:12 guy knows something right like obviously like if you look at World Liberty Financial their entity has been basically like T whopping ETH they've bought mid-eight figures now and they were just having these ridiculous buys they hold I think BTC through WBTC right now, which I know is probably not your favorite, but they're very bullish on the space and they're actively deploying capital against it and they're talking their own book. I mean, the tweet he had about ETH, which wasn't just on the screen was, buy ETH, thank me later, sort of like in almost those words. And then he changed it to just, good time to buy ETH. So does this mean they're buying it in the strategic reserve or this Bitcoin stockpile or whatever we're going to call it potentially um i find it really hard to believe they're going to spend 180 days analyzing it and come to the conclusion that

Starting point is 00:23:54 we're not buying anything so i think they're likely buying a handful of the majors bitcoin eth and maybe a few others um subsequent to this and dav Sachs, who's running this division, is a multi coin LP and multi coins. Biggest position is obviously very vocal. It's a lot. So I don't know. You look at the incentives and you show me the outcome. And I think

Starting point is 00:24:15 I think we're a lot. We're going to see a lot of strong purchases by, you know, not only the Trump entities, but also potentially government in the near future. All right. Well, that is a wrap. Tom, thank you so much for joining me. Everyone who's been listening, we'll see you next week. And of course, we'll end with what is, you know, the one truth that we've learned in

Starting point is 00:24:35 this industry, which is that there's basically never a bad time to hit, to smash that orange buy button. All right, guys. See you next week.

The Wolf Of All Streets - Massive Bull Run Ahead: Bitcoin To Skyrocket To $500K By 2028!

There aren't comments yet for this episode. Click on any sentence in the transcript to leave a comment.