The Wolf Of All Streets - Revisiting Web 3 Gaming | Crypto Town Hall w/ @illuviumio

Episode Date: June 11, 2024

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Yo. Yo, how's it going? Where are you? Uh, Miami. What's in Miami? I came here for a wedding the other day and then... Oh, nothing crypto related? Summer family vacation. Well, I was doing a few things here and there but mostly...

But there's no event? There's no event or anything? No, no. Ah, cool then. No need to share. Right now it's like apocalyptic, though, so not that fun. Really? Miami? Miami? Shocking.

Miami gets bad rain and lightning in the summer. Shocker right now. Oh, okay. I thought it was too hot. It's what? Oh, okay. Yeah, the rain and the heat. I love when that happens.

It's just such a unique weather. Dubai right now is, today, the peak's at 41 degrees Celsius. The minimum is 31 31 between 31 and 41 okay you guys are far night it's between 88 88 and 106 106 88 to 106 drive drive you right yeah well it was 111 in vegas last week so holy shit but i was if you didn't go outside that you go outside for eight days you were playing poker the entire time. More or less. I took two trips to the local CVS. That's about it.

Well, Scott, pleasure to hear your voice today. Yes, sir. I know you've got a few minutes. Give us your quick thoughts on obviously the FOMCs tomorrow, but the inflation data coming in as well. We'd love to get your expectations out of the panel as well, kind of having a macro discussion, what that means for crypto as well. Yeah, I haven't dug too deep into what's expected as far as CPI,

but it's clear. Goldman expects the 0.25% increase for May. Its current CPI is at, what, 3.4%. So that's Goldman's expectation. I don't have any others yet. And obviously, Fed is expected to keep rates unchanged. Yeah. I mean, I think there's definitely some hesitancy right now as to which way inflation is going to go in general.

But honestly, I think that everybody looks at all these numbers and rationally understands that none of them are real at this point. I mean, you look at the job report last week and how nonsensical it was when you dig into them. And then you look at the sort of, you know, inflation numbers and you see what's actually happening on the ground. And it's hard to take it very seriously. But markets obviously knee-jerk react to them but uh if you read the bloomberg articles about crypto right now um you know people hold their breath bitcoin drops in advance of fomc like those are just nonsensical narratives to me i don't think one has anything to do with the other and i don't think at this point anyone's surprised by a bitcoin move from 69 to 67 or i think it's

particularly relevant yeah Dave Mike Mike I'm not sure if any of you were on the finance space of pace earlier with Danish um if not we're going to get speakers from that it's going to get a recap on Danish's space which was obviously a macro a finance space uh but just looking at the the data is coming out tomorrow the FNC meeting tomorrow as well and the the red day that we've had encrypted today we'd love to get your thoughts on it Dave Mike Matthew and William I don't have a whole lot of thought, to be honest. I mean, it's like, you know, we're in a range, we're towards the top of the range. And now we're kind of floating back towards the middle of the range. That doesn't really surprise me.

You know, we're in the summer, you understand what's been going on and you know there's all sorts of like weird false narratives i mean honestly the single largest correlation to crypto and you're gonna laugh but uh when gamestop dropped on friday and dropped again yesterday i think that uh took a lot of euphoria out of the market. And does this make sense? No. Is it real? Yeah, probably. And, you know, it's like when you get these sorts of, you know, euphoria signals, people trade on them.

And when there's not a whole lot going on in the market, what people are trading on kind of becomes a self-fulfilling prophecy. I looked at it yesterday and I said, hmm, I bet you crypto is going to have a weak day. And then I saw, you know, so I'm not really all that surprised, but it's an idiotic thing to be saying, but I actually believe it to be true. Yeah. But do you think the GameStop effect is on the entire crypto market or just meme coins? Well, I mean, the entire world is, the best I can explain it. And unfortunately, I'm old. So I'm going to use old analogies. But there was an incredibly popular TV show before my time called The Honeymooners. I saw it in reruns.

And then a cartoon show called The Flintstones that was more or less the same thing. And the overwhelming theme in the show, the main character, whether it was Fred Flintstone or whatever uh was always about getting rich quick people want to get rich quick schemes right and i don't think that that's any different i mean that's clearly what drives me stock this clearly would drive me in coins now there's another current of reality in the meme phenomena which is community etc and so there is a potential. But let's put that to the side. You know, we saw some false stories that I debunked on Bitcoin. You know, only there were all these narratives running around looking at the commitment of traders, futures reports saying, oh, look at how many short trades there are in Chicago from hedge funds. And

boy, you know, if it starts moving up, those funds are going to get burned. And people almost certainly because there were so many of them, almost certainly there was buying based off of that. But that was idiotic because those shorts were hedged against spot long on the other side, right, in order to feed the Bitcoin ETF, because two of the authorized participants cannot buy spot Bitcoin. So they have to buy futures to hedge. And so it was a hedge position that meant nothing. And so

when people buy an expectation of something that something doesn't materialize, you get some softening. You know, I don't call 2000 point or 3000 point drop from the high, a massive correction, I call it a softening, because in Bitcoin, that's really what it is. And we're still not even down to the middle of the range yet. Yeah, I'll go to William. And I do want to discuss, since Ryan is here, I was just watching his show that he did with Books and Bark, focusing on meme coins as well. We were discussing meme coins yesterday. So I really want to get his kind of TLDR on that show as well.

But William, I would love to get your thoughts on what Dave was talking about, just the data we're expecting tomorrow. Yeah, just as a preamble to this, some of you probably know, Canada has lowered the interest rates for the first time by a quarter point just a few days ago. Usually, Canada follows the US. So, I'm not saying the US is going to follow necessarily. Obviously, the numbers will speak first. And Europe might be following so i know

last month i predicted that they would lower in the u.s and i was wrong obviously uh but i think it's going to be inevitable that for the for the u.s to start how how would you say it's a more important question is like obviously we can sit there predicting what's going to happen tomorrow but um what's going to happen over the next few months but the more important question i have for you is how much does it matter it feels like it just feels like no matter what happens other than obviously the etf approval everything else is just the same is a cycle repeating itself we're seeing the same thing over and over again um and we're not seeing anything else impact the markets too drastically unless obviously we see a complete black swan event type crash in the stock market, for example.

Yeah, I mean, it will matter once it becomes a trend. One movement on its own is not a trend. So, yeah, I mean, it may not matter. But only if it gets followed and it becomes a trend or and we'll see um but to to comment on what they've said about the uh the meme coins obviously there's been a lot of weakness right now in the last few days on the meme coins aspect um and um it's it's really related to the excitement effect uh it's it's like uh you're betting against the excitement and when the excitement effect. It's like you're betting against excitement. And when the excitement is lower, then prices don't move.

But this thing is going to come to an end. The meme coins that don't have some kind of either excitement or utility are not going to do as well. And I'm seeing some of the meme coins now becoming more of a utility token. But that's another big discussion. Back to one point I want to make is there is a lack of news right now that I see that is significant. And we keep asking ourselves, especially in the U.S., why doesn't the government see the blockchain for its benefits, for the benefits that we see? And all they see are rather the faults and the problems. And I think we need to blame ourselves a little bit as well. We need to do a better job at

explaining and not just at explaining, but at showing. This is show me time right now. It's been almost 10 years. We need to do a better job as an industry uh that's my assessment right let me just look at it there's a meme coin index not sure if anyone else knows about it and right i'm gonna go to choose since william brought up meme course but there's a meme coin index by market vector it has uh it holds shiba inu holds 31% shiba inu doge 29% so 30% and then pepe 15% and then the rest, I'm not sure. So it's old school memes. Yeah, it's just some of the old school memes. That doesn't track the new meme market at all.

Yeah, but still, I think it's like tracking Bitcoin and else. The correlation is mostly there, but you can correct me if you disagree. No, it's not. Can you expand on that so there's no correlation? The big memes don't move like the small memes. The small memes have got a life on their own. Could you see a crash in the big memes and big memes the big memes don't move like the small memes the small memes and live their life on their own could you see could you see a crash in the big memes and small memes still pumping yeah yeah you get small memes are driven by communities um i mean to be

honest memes are a game um it's it's a it's it's a it's a massive game of it's actually just a game of influence that's all it is. I would say that memes have become – I don't think that they always started like this, but they've become an influencer. Who has the most powerful influences? That's what it is. Sorry, go ahead. You dropped out. My bad.

Yeah. Hey, sorry, go ahead. You dropped out. My bad. Yeah, so I think memes have become a game of who are the most powerful influencers behind the scenes. That's pretty much what the meme game has become. I think a lot of them, I think that I'm watching what's going on in the meme market. I've got terrible meme fatigue. I think everyone's got meme fatigue at the moment. And I think the reason is there's

too many memes i think the game has become monotonous i think it's there's a handful of influencers that are controlling the meme market at the moment they are behind the memes they're launching the memes they're speaking about the memes what is what what is the meme market now i don't know if it's that much about the strength of a meme rather than the strength of the influencer behind it yeah but talking about memes as well different different narratives different matters what we're seeing that we had the celebrity matter that you were pretty bearish on because again i was just listening to you show half of it yesterday and half of it today and you were pretty bearish on the whole

influencer meme which we were talking about yesterday that it could be more of a social token rather than a meme token but then if you look into if you do i think iggy's eddie's coin is still the only one only celebrity token that's done well um and if you if you link that with kind of the slowdown that we've seen with meme coins in the last few days could my uh my uh my it's my it's a game it's a game and you you have to understand the rules of the game here's how the game is played they launch to understand the rules of the game. Here's how the game is played. They launch a token. The majority of the token is sniped at the launch.

When I say sniped at the launch, it's sniped in the first block, which means that the only way that people can snipe it is if they know it's going to launch. And the only way that you know it's going to launch is if you're an insider. 90% of the token is sniped at launch, more or less. 90% of the token is sniped at launch. Now you've got a bunch of influencers and celebrities and their insiders holding a whole lot of these tokens, right? And there's only 10% free float in the market, which means that even the smallest buyers or the smallest retail movement will move the token price up. Then they get the token price up to $150, $160 million or $200 million or a billion.

And then the influencers and the celebrities start to offload their tokens tokens It's a game. That's how the game is played the sooner you learn the rules of the game This is supposed to be pushed back against V fees and The game the games are fair and they're for the people is that this could have ever ended any other way Yeah, but the game also changes around so it's a good point Like even the way that's like a community launch, a fair launch is not really that fair when it gets sniped, what do you call it? Bulk buy, whatever you call it when you launch it. But the other thing, Ryan, is that the game changes, the rules of the game change because not long ago,

the strategy of launching meme coins, we're going to get back to kind of looking at the markets. But the way we're launching a meme coin is you raise capital privately, some of them just post to wallet, and then they just raise money, not promising anything in return, and then they launch a token slur for each one way, one such example, it didn't go too well. But the rules of the game were different back then to what it is now. Well, yes.

In the very beginning, the game were different back then to what it is now well yeah yes in the very beginning the game was different now then it became a hybrid where they were raising money and sniping the tokens and now now no one's raising money anymore because you don't need to raise money anymore because you can just snipe the tokens on launch on the first or second block of the of the of the launch and and then you the the tokens are tightly held held by a bunch of celebs and influencers and their insiders. And then they pump up the price and then they offload the token. Now, look, that's the game. As long as you understand the rules of the game, then fair play. You know what I mean? But the problem is, I suspect a lot of people don't understand the rules of the game. Now, you just changed the title. Is this the end of the meme

rally? I think people are starting to get meme fatigue. I think people are starting to get meme fatigue. And I think as soon as the market actually starts to move, then I think they're going to leave the memes. But I think for now, with the markets so choppy and sideways, I don't know if there's anything else where you can get your dopamine hit. So you might as well just go to the casino.

You know the odds are slightly stacked against you, but it's still fun. Yeah. Do you expect that shift of that volatility or the speculative traders to shift from meme coins to VC-backed token launches, you know, the ideal hype we saw earlier this year in the previous cycle? Or do you expect it to move to alts that are already listed? I think right now your best bet is the alts that are already listed. And to be honest,

the alts that are already listed with most tokens in circulation, things like an example, I'm not saying it's a good investment or anything, but things like BSC chain, where all the investments were made a long time ago and the tokens are out in the market, or some of the old Solana natives,

those are probably the safest plays now. Your other option is to launch, to get involved in IDOs. I mean, I think the IDO game, as you probably realize, is slightly dying down. The reason why it's dying down is people ask themselves,

why must I lock up money for a year and have no liquidity for a year or very limited liquidity for a year if you're getting part of the lockup? When I can just buy, there's really good value on the market, which is really quite cheap, right? So I think we're starting to get to a point of like, the markets will start pushing things back down to equilibrium.

There'll be no more buyers. And then when there's no more buyers, valuations will start reducing, lockups will start getting shorter. People are already talking about full unlocks on tge you know now i mean that's like which is exactly 2021 versus 2020 by the way if we're talking 2025 versus 2024 that is the same cycle is that the pre-sales were not great in 2020 and then 2021 there was like this four month period where they went absolutely nuts in that exact same structure when was the last, when was the last time you invested in IDO with like a one-year lockup and a one-year cliff

and then an 18-month vesting? When was the last time you actually wrote a check for one of those? Months ago. Which one? Pixels? Where I believe that it could happen still in this market. Months ago. Months ago. Months ago. And Mario, I mean, you mentioned Pixels, but if you hadn't got part of the KOL round,

you would never have done it, right? What's the KOL round? Did they have an immediate – we have a one-year lockup. We came with a seed round or something. Yes, I mean, I think that – I mean, a one-year lockup. I don't know. If you're comfortable locking up your money – No, it's the next market.

But when you're talking about Binance Launchpad project, it's a different discussion. I think we have the Binance tokens, which anyone will invest based on any terms, and then the rest of the tokens. I wouldn't put them all in one bucket. But yeah, I'm with you. I think the valuation... I'm not sure.

I'm not sure. When projects phone me nowadays and tell me they've got a one-year lockup, I'm like, thanks for playing. I'm not interested. You want to give me tokens up front? Great. Why?

Wait, why must I lock up my money for you? Why must I lock up my money for you? But don't you have Banter Capital, I think it's called. It's a VC fund, no? Or VC-like fund. Yeah, cool. Cool. But right now, the investments are much better on market.

Oh, okay, okay. So you're saying the alternative are going to listed tokens, doing an OTC deal, getting a shorter lockup is more lucrative than doing a long lockup with a, with a pre-sale, especially with the current value. Okay. So a lot of the music are better,

especially with the current valuation. The current, the current, yeah, the current pre-sale valuations are fucking ludicrous. And, and then they're still talking to you about the 12 month lockup. I'm like,

all right, thanks. Thank you. And then what inevitably happens is they start phoning you back a couple of months later saying, oh, look, can we get you on our cap table, please? So I think the market's starting to cool down a bit for the ideas. And I think they're going to have to reinvent themselves because I think that this model of 12-month lockup and 24-month vesting

isn't going to work for very much longer. I'm not sure anyone else in the in the panel that's investing i know we're kind of shifted from the markets kind of looking at different strategies and we can't market conditions over this cycle anyone else in the on the panel that's investing privately sees either investing in meme coins like me and you are in the meme coin game and we're also in the i see matthew on meeting i'll give you the mic matthew but me and you ran in the in scott to an extent but lesser extent we're in a meme coin game and we're also in the i see matthew on meeting i'll give you the mic matthew but me and you ran in the in scott to an extent but lesser extent we're in a meme coin game scott is not in that game um and we're we're in the private investment we should launch a mario coin

i think we should launch mario coin run coin and scott coin and pumped um yeah that's and then just just a disclaimer before anyone else launches it pretends it's us we're not doing that um how but gummy actually i've got a question for you you did two experiments in the meme because you kind of took it many steps ahead of me you did two meme because you had the guts the balls to do it we have we got gummy which i'm a holder of so thank you for that and then obviously you've got tuka carlson which i don't think i'm a holder of what how's that experiment going so it's not yours you've you's not yours. You've bought up... Tukka bought tokens on the market. I also...

I mean, it's not our project. They're their own founders. The founders do what they want. We're just supporting them. So, I mean, and again, I don't think Tukka is a meme coin. It's a meme media station. And that's going...

I mean, it's going pretty well. You know, like the shows are sponsored. We're burning tokens all the time. But I mean, that's not mine. Gummy is a true meme coin because it doesn't really have any any utility whatsoever um and i mean look when the markets are done gummies down when the market's up gummies up um and i mean that that's what a meme coin that's a meme coin it all comes down to the strength of the community and i think you know when the markets are good it goes up to 100 million when it goes when the markets are better goes down up to 100 million when it goes when the markets are bad it goes down to 50 million it's nothing you can do and what are your learning lessons from these

two experiments do you regret doing them did they work out well because they look like they've worked out pretty damn well i've only done one i think gummy was fantastic gummy was a fantastic experiment we learned a lot and we we managed to teach people a lot of what we learned i would never have known about sniping i would never have known about how the game works without actually launching my own coin. Up until I did Gummy, I thought the game was much more fair. In terms of Tukka, look, Tukka is a long-term thing. You know, if Tukka can keep its content relevant

and sponsors will be happy to pay for that content, then I think it's going to be amazing, especially now Tucker's going on his Tucker tour around the USA, which I think is going to give him amazing, amazing sponsorship opportunities and amazing content opportunities. So, I mean, let's see what happens. I've got a question for you. I was just chatting to my team earlier today,

but since we have behind-the-scenes chats here, even though Scott hates it, i was talking to my team i'm like i kind of got the idea after the the um the the trump and um um a tape space trump junior and tate but more importantly after watching your video are you books and buck and i'm like we've got all these political shows that we do we're partnering you know we're partnered with james o'keefe we're partnering with alex Alex Jones and others to kind of do shows with him. And we've got obviously Nick doing the Trump shows, the US political shows, left and right. And I'm like, fuck, like, Politify meme coins, political meme coins are doing really well. Why not just bite the bullet and have every political show sponsored by a surprise meme coin, political meme coin, taking the game that step further.

Your thoughts? Yeah, I mean, I think it's a good one. We had a sponsor on our show this week, which was, it was called Convicted Felon. So I know the guys that launched it. Convicted Felon is a, their tagline is, the Democrats will call Trump a convicted felon. They'll use those two words between nine elections more than any other two words. And every time they do, we'll pump the charts. So that's the whole game.

So it's almost like a play on the more that they use the word convicted felon, the more they pump the charts. And I see you do the fireworks every time that happens. But do you think – how long do you think that narrative would last, the political meme course? Is this something that's got another few weeks? Is it going to die out like celebrity? Well, at least until the election.

At least until the election. I mean, it only makes sense that at least until the election it lasts. That's a long cycle. I mean, that's until November. It's until November. So, I mean, I guess that won't last until after elections. I don't know, end of November? Yeah. Matthew, Iew i'm gonna go to you next get your thoughts on the discussion anyone else on the panel especially we've got meta lawmen here who probably tell us on what's with the

legal issues illegal risks when it comes to meme coins i just want to ask a question to the audience and the comments the bottom right corner it's a genuine question like your thoughts when we just talk about the news in the markets when we talk about like kind of behind the scenes discussions, our strategies, our thoughts on the markets, and what we're doing with our businesses. Which ones do you like more, a mix of both? Behind-the-scenes discussions, we're focusing only on the news and the markets, and you don't give a fuck what our business strategy is. But Matthew, I do give a fuck. So what's your strategy? What do you think about the back and forth between me and Ryan? And you're welcome to disagree as well. Yeah, I think that the

meme coin market I think is absolutely running out of steam I think retailers have lost a lot of money I've got a tweet um pinned um basically saying that the financial system is a wealth extraction mechanism from the few for the many sorry for the for the few I don't know if it's just me sorry this is you Ryan i'll bring you down and back up go ahead matthew yeah yeah so i'm just saying that uh the financial system is a wealth extraction mechanism from the sorry for the few from the many and we see that with the meme coins there's only a few people benefiting from this as i've already said those people who are pumping them at the start getting massive uh holdings right at the beginning and the retailers i think are

generally running out of money the whole crypto market is um getting very very institutional at the moment so we've got the people on the sidelines here pumping the memes and then with the main cryptos like bitcoin you've got this massive institutional adoption and is following so when we talked about memes we talked about them being really speculative. And the big memes are being a different category kind of thing that they're moving with the markets and moving very much more like with the risk assets. Like we saw with Bitcoin, it evolved originally from a totally speculative asset. Now it's a risk asset being moved with the main data that comes out of the market. So that's why we've seen this palpable fear in the markets because everyone's scared stiff. What is CPI going to be telling us tomorrow?

And what are the Fed going to do? Well, clearly the Fed are going to stay on hold. Before we get into the Fed, before we move on to tomorrow, you said something at the beginning of when you started speaking, is that you think that there's a whole meme coin fatigue now in the market. What makes you say that everybody i hear about i mean we've seen it with gamestop there's only a few people in gamestop making money the crowd aren't making money i mean it's the same with most of the memes the crowd are not making the money they're seeing the big money they're seeing the big pumps the massive market caps and everything but they're not the one

i agree with you i agree with you um and i think a meme coin is more than the rest of the financial system but as you said it's the entire financial system crypto non-crypto so i think this isn't a problem like well you know you're talking about gamestop being the same issue applying there but then you know we're seeing that same cycle repeat itself multiple times meme coins have been around for many years um the entire crypto that what you're saying, VC-backed projects, same thing. VCs, at least when they were in the bull market, were in the last cycle.

VCs made most of the returns. Retail got fucked when they came in, and there's these unlocks being dumped on them. So I think the model is skewed against the masses across various assets, including various crypto assets. NFTs are the same, were the same. Yeah, across those crypto assets, when you look at the more solid, the regulated assets.

I don't know if anyone else is speaking. I can't hear anyone else, but you're speaking. Yeah, I'll bring him down. Yeah, go ahead, Ryan. Matthew, I'll bring Matthew down and back up. Go ahead, Ryan. I think that NFTs had a higher barrier to meme coins. So to launch an NFT collection, you needed to do generative art and stuff like that.

Memes are nothing. Memes, you just press a button on pump.fun and you launch the meme coin. It's so much easier. I think NFTs were slightly harder to play that game. Yeah, but same as launching a project as as well but to have a successful meme coin you can't base it only on luck i think the strategy going behind a meme coin getting the right ko wells and keeping the narrative to build a community some of it is luck but there's certain things you could do to kind of increase the likelihood of success you can't oversimplify it

either i still think it was harder to do nfts and i think i think that like memes are the easiest way to make money the easiest way to to make money when i say make money not trade money but make money um the easier it is you know efficient market hypothesis so easier it is the more competitive it will be i think there were less people launching nft projects than people launching meme coins right now even though you can automate the nft project you can automate the art and a lot of the things like the art isn't the hard part the same things that applied for a successful nft project or even a a utility project a vc backed utility project apply to a meme coin as well and that's building community getting the right hype getting the right k walls and and making sure there's no obviously scam or hack or

any insider uh trading um that ruin your reputation. But going back to the discussion, Matthew, I think you're still down. I'll take your invite to come back up. But we'll have to get the thoughts we've got. Actually, before going to MetaLorman, let me do this. I'm going to go to Kieran after MetaLorman. MetaLorman, I want to ask you about the legal concerns, if you've got any legal concerns when it comes to meme coins.

Because we're seeing them, you know, we're seeing thousands of meme coins launched on a daily basis. We're seeing them promoted by various KOLs. You know, we have them on our show. Rand has them on his show. Rand launched one and been very active in another. And I'm sure he's engaged with the lawyers. He's been careful on that front. Your thoughts on the current meme coin hype and whether we're going to see an SEC crackdown on that similar to what we saw with NFTs?

Well, great question and an important question. And I encourage everybody who's promoting or issuing meme coins to get good legal advice. And I'm really not good at soundbiting. Here's what the three things you need to do to steer clear of the SEC. It's just not that easy. And I'm not an expert in meme coins at all. But what I see from a macro standpoint is it feels like 2024 is very different from 2021 when it was COVID. You had all these people awash in liquidity,

looking for somewhere to deploy risk capital, regular retail people. And so you had this NFT boom and all of these asset classes boomed. It just, to me, this is obviously not, you know, I'm a lawyer. I don't give advice about anything anybody ought to ever buy. It feels different. It feels like retail is trying to figure out how to pay $22, you know, for fast food and for gas and stuff. And so from a retail perspective macro, it's hard to imagine that there's a wall of money like there was in 2021. But you guys are the experts in that. And secondly, on macro, so I was a trad five for 25

years before I pivoted over to crypto in 2017. And so one of the questions that's coming up right now is how is it possible to have 20 consecutive days of inflows into Bitcoin spot ETFs, some of those days being huge inflows and nothing happening to the price? They're going down a little today, last couple of days. How is that possible? You know, and one of the other observable facts is that the amount of coins on centralized exchanges is at all-time lows. I am now going to connect those two things. I am not saying that this is the driver. I am saying it is a phenomenon, and I know that for a fact. That is that there are a number of people, I'm going to say a lot of people, who are more comfortable. Maybe they're my age. They're more comfortable moving either from self-storage where they're never that comfortable

with their hardware wallet or a centralized exchange and just buying the ETF and having it at Fidelity or Schwab or wherever it might be. There are a couple of benefits to that. And you pay very, very little in terms of fee, microscopic fee. So you are going to track the underlying asset and not pay much for it. And you get two things. You get peace of mind and you get $500,000 of insurance for free from something called SIPC, the Securities Investor Protection Corporation. And that's meaningful to people who are big into risk management. I'm retired. You know, I'm big into risk management. I'd prefer not to lose my money, get it hacked from an exchange or lose my wallet or my seed phrase or whatever.

So as you see, I'm going to stop here. I just want to say, as you see balances, this mysterious decrease in balances of exchanges paired with inflows into the ETFs, I believe could be wrong, but I believe there's a connection there. Just want to go back to the first point you made, and that's the retail not entering the markets yet. And I know we've discussed this on the show earlier. Got us a little bit of a spike in YouTube numbers, among other metrics, and then it dropped considerably again. So retail either barely came in or didn't come in at all. I'd love to get some more thoughts on this.

And, Matthew, I'm glad you're back on the panel DB as well. Matthew, I want you to finish the other point you were making earlier, but kind of going to the point that I've just highlighted. And that's what would it take for retail to enter the market? Or has retail entered by either playing the meme coin game rather than entering, you know, buying up altcoins or private rounds i think a large part of the retail market has been burnt out i don't think they've got that much money um i think that you know all of this covid money the money printing i actually think went to the the the top of the echelons you know the rich people basically um the fund managers. I don't think that I just think that the ordinary people are burnt out that they've not participated in the recent rally because

they became skeptical with the FTX crash. They never really participated in the massive rise from 15 and a half K to 70 K on Bitcoin. So I don't think they've got the money. It's not been made by them. This is why it's not been made by them this is why it's just institutions now that are in the market and yes there's some people dgens etc buying the you know the meme coins and so on and even there but you know you know but matthew you don't think they'll enter a question to you and obviously others but you don't think they'll enter when we start hitting all-time highs again well you don't think they entered when they saw meme coins pump a hundred a thousand x we've seen all-time highs we've already been at all-time highs again? Well, you don't think that ended when they saw meme coins pump 100,000x?

We've seen all-time highs. We've already been at all-time highs. Barely, but all-time highs for a week is not enough for a couple of weeks, not enough to get mainstream media attention. Why are people not excited when the market's risen from 15,500 to 70,000? Is that not enough to get people excited? Not enough to dominate the headlines.

I think Bitcoin hitting all-time highs is just catchier than Bitcoin's up 30%, 40%, 50%. Because people just look at it and they're like, okay, Bitcoin's gone up, Bitcoin's gone down, it's going down. So it just doesn't really get people as excited. You don't get every Tom, Dick, and Harry messaging you, messaging all of us saying,

hey, should I enter crypto? Is it good to enter again? We've had some of the most amazing gains. We've had Solana from $8 back up to $210. We've had some amazing gains. We've got Jasmine recently been pumping. We've got all sorts of tokens pumping. Some with even great use cases and utility.

So I think there's enough out there. I just genuinely think people are tapped out. You've just dropped out, Matthew and DB. Do you agree with Matthew? Are they just tapped out? Okay, you're back, Matthew. You're cutting in and out. But DB, do you think they're tapped out or just too early in the cycle?

No, I think it's way too early in the cycle. They haven't come in yet. I don't think they're too early in the cycle. They're definitely tapped out. Matthew, I was just going to ask, that's your take. Matthew, DB was kind of giving a different perspective. DB, you were saying that you think it's too early in the cycle, but you don't think they're tapped out? No, I think it's a little bit of both, but I'd say more so that we're early in the cycleows, we're not anywhere near a retail inflow yet. Most of the numbers are heavily inflated because of either points, farmers, or airdrop. And now a lot of chains are counting wallets every time you, if I airdrop something to 10,000 wallets, that now makes 10,000 active wallets.

It's just the numbers are inflated. There's no way we are anywhere near retail entering yet. Talking about the numbers, Andrew, I wanted to ask about the ETF outflows this time around. It's the first day of outflows after 19 days of net inflows, over two weeks of net inflows. And we have net outflows of 65 million and Grayscale is 40 million out of that. We'd love to get your thoughts on this. Does that show that the ETFs are a lot more volatile than we'd like them to be? A small correction in the markets, a 3% drop in Bitcoin, and we're seeing a day of outflows?

No, they're not going to be more volatile. That's 19 days in a row of inflows and then one tiny day of outflows that, for intents and purposes of grayscale didn't exist, it wouldn't be an outflow day. So, you know, the strength is going to continue. It's the only game in town. The guy that said earlier that there's folks that are taking Bitcoin out of self-custody and putting it into ETFs. That's a real thing. I think that's probably a larger portion of inflows into Bitcoin ETFs than we probably give it credit for. And the association of the ease of use with the ridiculously low costs. You have some ETFs right now that even for another few months, it doesn't cost anything to hold the ETF.

They're still at zero before they get to the six-month mark or whatever it is. So one day of a little bit of outflows that are dominated by Grayscale is not a surprise. That particular impact in that particular narrative will happen once Ethereum is approved to actually trade. You're going to see outflows from Grayscale be a real part of the equation as well. People have forgotten, but there's still an ongoing legal issues associated with the DOJ and Barry and Grayscale. So the ETFs, Bitcoin ETFs in particular strength will continue. You're going to see the outflows either stay steady or grow larger, especially near the end of quarters. And we're nearing an end of Q2. I expect inflows to be pretty substantial. Why? Because you're going to have large allocators

who have to keep up with their competition. And if the competition was buying Bitcoin ETFs early in Q1, and if they haven't allocated when their customers that have billions of dollars involved in their funds ask them, why didn't you buy an asset that's doubled in price or tripled in price over the last six months, they've got to play catch up. So I think the inflows will continue, especially on the institutional side. And talking about inflows and outflows, we did see OKEx as some rumors of a security incident. You're probably one of the first people probably heard of it. And they've seen outflows of $200 million in the last 24 hours and $630 million in the last seven days. Got more information on this. Binance in that same period in the last 24 hours and $630 million in the last seven days.

Got more information on this. Binance in that same period in the last seven days has had $1.3 billion of net inflows. Okay, $630 million of net outflows. Is that a point of concern? And do you have any more information? I don't have any more information on it. Is it a point of concern? I mean, there have been much bigger issues associated with security and securing your assets at crypto exchanges over the years. These are small numbers. It's the risk that you take playing in the centralized exchange game globally.

I think it's just a thing. We haven't talked much about the Binance brand over the past six months and what it is or what it's going to become or, you know, where it is from a scale standpoint. You know, they went over a sizable margin of users maybe a couple of weeks ago that they announced. I think the number was 200 million. That's a that's a remarkable number. So I find it interesting and compelling to have the conversation about the price of particular assets. So let's talk about Bitcoin and Ethereum associated with the movement of capital with those two assets, you know, versus, you know, traditional finance and what role do they play, right? So Bitcoin ETFs are buying such and such on a daily basis and have bought a certain amount over the past couple months. And yet on Binance, there's a certain amount of movement that kind of dwarfs that. It's an interesting conversation and study to do. You know, I'm sure there are folks out there that are studying the impact that movements have on crypto exchanges today versus, let's call it, you know, Bitcoin ETFs.

Interesting to to try and figure out who's having the bigger impact. You know, there's a lot of there's lots that's been talked about, about the carry trade associated with futures and, you know, spot Bitcoin ETFs. Generally speaking, when that trade is being taken at some level of scale, it's a net long, so it's net bullish. So I don't put a whole lot of stock in there's some sort of nefarious trade being put on that's going to somehow show up in net outflows with spot Bitcoin ETFs in a meaningful way at some point. But yeah, there's a lot going on out there that, you know, is a material change in the way that Bitcoin and Ethereum are traded and where they're traded and at what scale are they traded. You know, big, big differences. Let me go to, where are you, Kirani there?

Hey, mate. Yep. I've got one more question to mike i want to get kind of another take on tomorrow's numbers and what that means for crypto as well and i'm gonna go to you just kind of dig into different narratives in crypto and of course i want to talk about the vc model as well that i always like to talk about it's just whatever whenever scott is not here and gives me the mic it's one of the topics I'm really passionate about. But Mike, I would love to get your thoughts on tomorrow's FOMC and what we could expect. Yeah, I mean, I think if you look at the macro numbers right now, I look at Atlanta Fed and Alcast,

it's got GDP forecasted north of 3% for Q2. And so I think it's a pretty interesting situation for the Fed in terms of contemplating rate cuts in the second half of the year. I do think the rates have correlation to price of crypto, and I think it shows up in the cost of funding. And what we've seen, certainly for the first half of this year, is extreme stress on dollars available on exchange. So I think last time I was on, I talked about the overnight borrow rate on USDC on Binance is north of 24% right now. The term borrow is north of 80%.

This has an impact. And we think about back three years ago and at a zero interest rate environment, cost of finance lever crypto positions was in the 6% to 8% range. Today, it's north of 15%. So it's a definite headwind. And it just seems that the Fed's in a challenging situation to be easing in a circumstance where GDP is going to print north of three, irrespective of what happens on the numbers tomorrow. So I don't know. I mean, we'll see how it plays out. But I'm in the camp that it's, you know, I take the view, while the market's forecasting, I think two Fed cuts by the end of the year, and I'm in the camp that it's, you know, I take the new, while the market's forecasting, I think, two Fed cuts by the end of the year.

And I'm taking the view that we're not going to have them. That's being offset, obviously, by a lot of organic demand coming through the ETFs. I think the ETFs did have a cannibalistic aspect on the exchanges in terms of volume there. But they also brought in a lot of new capital. And so, you know, the explanation of why are we seeing these huge inflows without the price moving up? Obviously, some of that is coming at the expense of the exchange volume, the centralized exchange volume. Some of that is new flow. But the challenge that we have is right now the comments costs are high.

So is there any data on how much of those inflows are just kind of cycling through from the markets versus new money coming in? No, we just have to make an inference as to outflows off the exchange versus inflows into the ETFs. And the inflows into the ETFs outweigh the outflows on the exchange. So there is new money coming in. But the issue is we have some headwinds with rates. And those headwinds show up both in the spot borrow leverage costs and also in the futures and the perpetuals, the funding cost. Yeah, one more question is these inflows and outflows. Let me go.

I've got the numbers open up. All right, cool. So how is Binance seeing such massive inflows? So in the last month, Binance, last seven days have been crazy. Binance sold over a billion dollars of inflows in the last seven days. If we take that out in the last month, it would have been net outflows. Because net inflows for Binance over the last 30 days is 400 million. Seven days is 1.3 billion. OK, I'm doing pretty badly. Over the last month, $340 million outflows. Over the last

seven days, 633. Yeah, just having a look at numbers. All right, so we've got Bitfinex, his net inflows, but Robinhood, net outflows half a billion, Bybit 300 million net outflows. So what would be your explanation of why Binance is doing so well while most of the others are struggling? Not struggling, but the numbers don't look too good. Sure, sure. The exchanges are an economy of scale game. And right now we have way too many exchanges. The market's completely fragmented. I think you're going to see significant consolidation obviously robert's acquisition was was the beginning of that um but most exchanges are subscale and so capital is

flowing to exchanges of scale where they have liquidity and uncertainty it's almost a flight to quality if you will um in terms of the capital moving there so it you know i don't, it's almost a flight to quality, if you will, in terms of the capital moving there. So I don't think it's crazy to be seeing the flows and the consolidation that's happening right now. And I'd expect you're going to see significant industry consolidation over the next 12 months. A lot of the smaller changes getting rolled up into the bigger ones. Yeah, Kieran, I want to go to you. How are you? Yeah, not too bad, Mario. How are youio how are you good good man before going into gaming in general and alluvium um my question to you is more about the the uh me and ryan were talking

earlier about you know the the the me of course taking away a lot of the liquidity away from nfts away from from ideal pre-sales and and public listings um we'd love to get your thoughts on the on the the markets in, but also as a project that's raised a fair bit of capital doing pretty well. How is investor appetite? Are you still doing any OTC deals with investors or what's Alluvium's, what are you guys doing at Alluvium? Yeah, so we definitely saw, if you go back to 2021, it was any project that had a pitch deck, a few team members that had built something maybe before you would get VC money thrown at you. Throughout 2022 and 23, it certainly dried up. Like it was actually pretty crazy seeing how many projects were struggling to raise their Series A or Bridge Round,

however they marketed it. We were lucky enough that we'd built enough of a product and our gaming ecosystem had a bunch of betas we had a bunch of players you know a million plus people that had registered and so we were in a bit of a unique position so we were able to to raise another uh 22 million over that period but i don't think it's the same for that many other gaming projects out there. I run a small VC firm with a partner of mine, and we certainly weren't deploying any capital throughout that time. And it was funny, some of the comments that Ran was making about these 12, 18-month, 24-month vesting periods, we were the exact same we would just

wouldn't touch them it was like we don't know what the hell is gonna happen when when when didn't you touch them what period now we went into so we invested in 110 games from 2020 to i would say the end of 21 and some of them had ridiculous vesting periods you know going from anywhere from 12 to 36 months and maybe five six of them we've actually uh we're in uh net positive so that just gives you a bit of an idea. Five, six out of 100 and something, yeah? Yes, yes. And did you, when you say the net positive number, did you guys liquidate in the bull market?

Did you liquidate the unlocks to kind of mitigate your risk? Well, that was the issue, right? Like a lot of these projects were, you were locked up. Yes, you got a really good buy-in price, but you were locked up for such a long period that as soon as they started unlocking, the valuations of these projects went up astronomically and retail were actually the ones who were coming in,

buying in the IDOs, then they would go up 10x and then they would start dumping prior to even the BC Unlocks. Then when the BC Unlocks started happening as well, we were in a little bit of a unique position. I don't want to be someone who's sitting there saying like, hey, we're buying your gaming project. We want to see the entire ecosystem move forward. But hey, on the other hand, we're dumping as soon as we get unlocked so maybe we're a little bit naive when it when it came to that but yeah we uh we we made some money on uh some some really good deals out there but it it was pretty which is which is going back to

the traditional vc model um and do you guys do any you said you raised 22 million when did you guys raise that because you guys listed a while you said you raised 22 million. When did you guys raise that? Because you guys listed a while ago, back in 21, obviously one of the hottest projects of the last cycle. And still, you know, I want to talk about what you guys are building now, because it's pretty impressive. But are you guys doing any OTC deals, which are getting pretty common, where you get VCs coming in and investing privately with a short lock-up period of three, six, 12 months? Yeah, so we did a 12-month OTC with one of our existing investors, Framework, who they haven't sold a single token since investing back in 2020.

So for them, it was just a pretty standard follow-on investment of 10 mil back about 12 months ago. And then about six months ago, we finalized, maybe not six, maybe four months ago, we finalized a 12.5 million raise with a bunch of different firms, which was more your traditional OTC. Yeah, I want to dig into Illuvium. Obviously, we're heavy investors in the Web3 gaming ecosystem, pretty damn bullish. And I've been talking about it for a long time. And we're investors in Illuvium as well. I think we came in, we invested publicly, not privately.

I could be wrong. But I love what you guys are building. But first, you call yourself a decentralized studio building the world's first interoperable blockchain game. Now, interoperability was one of the most exciting topics of the last cycle, and I think it's just not getting enough attention this time around. Can you explain more what you mean by the first interoperable blockchain game universe? of bringing your Blizzard assets into Mario Party and having cross-pollination between different studios. The way that we've set it, like that is obviously possible in the future, but it's so far away with, it would take different, the same asset standards. It would need a whole bunch of negotiations across multiple different

levels to try and get that sort of integration done. And I think it was used as a bit of a buzzword to say like, hey, Ready Player One, NFTs unlock the ability to put any IP in any other game. And we didn't look at it like that we took a step back and said okay we can control exactly what we're building in our universe and so when we talk about interoperability we're talking about being able to capture or earn or purchase an in-game asset in one of our titles and then being able to use that nft or character uh in any of our other titles inside of the universe and it's the first time that that's been done at a triple a level and uh yeah that's that's the the the main thing that we're trying to drive home with uh traditional gamers is that you actually have true ownership over these assets.

And it actually has a meaning behind it immediately after buying it. Yeah, the holy grail of Web3 gaming is the possibility to own your assets and allow that to become interoperable between different games. So it's no longer the assets. Well, eventually the goal is to have the assets not dependent on the game itself succeeding, but the assets utility across different ecosystems. Talking about Web3 gaming assets, it's pretty much NFTs. We were very bullish,

or I was very bullish on gaming NFTs in the last cycle, invested heavily in a bunch of them um didn't do too well um obviously and never they never they never had their time to shine uh it kind of died down before they i just really thought a lot of that money in the nfts really flowed to gaming nfts i find it to be the most exciting um so i think so still think they're underrated we'd love to get your thoughts on the gaming NFTs ecosystem. Why do you think it's just not getting enough interest from investors? Or is it and I'm just not seeing it?

So, no, you're exactly right. I think every NFT that I bought in a game has gone down considerably. And I think the reason is a lot of these games were sort of flash in the pan they had very very big dreams of what they were going to build they didn't have enough budget to to actually go through and deliver that and one of the ways that that I think was was actually a really uh genius way of uh raising capital was selling nfts and it it's something that i also don't like as well right like when when it comes to alluvium the only nfts that we've actually sold uh that are in game were for alluvium zero and it was a requirement to play the game you actually needed a land nft those nfts then basically power the entire economy you generate fuel off them and anyone else that wants to play any of the other games in the universe they require that fuel so it was basically

a revenue generating uh instrument for people to to buy into and we needed to sell them before the game had actually started but why do you think i like it too but why do you think that it's just not getting why an investor's interested or are they i just don't feel that buying power isn't there it's just because it's but it's an s that makes class it has utility it has a purpose it has gamers need to use it to play the game but it doesn't and that's the the and when i say it doesn't i mean it doesn't yet right what people have worked out is these games take three to five years to build and so they've gone out and bought the the nft asset to support the game three four five years prior to it even having any utility and over time naturally you're talking retail investors or very short-term bc investors that are looking to get value out of a purchase

certainly in a shorter term than that. And when that doesn't unfold, you get this deteriorating price action over time. And so I think what we'll get to with NFTs in the future is there won't be this market where you can basically go out and say, hey, we're going to sell you $100 million worth of NFTs and we promise we'll build a game five years later.

I think those days are gone. So essentially you're saying it's just not yet. It's one of those assets that hasn't gotten the love it deserves yet. And that probably applies considering that games do take pretty damn long to build. But are you seeing a lot of the games that were being, obviously Illusion being one example, but when do you think that we'll start seeing some of these Web3 games really hit mainstream adoption?

Well, that's the other thing that I've had to sort of, it's been very conflicting over the last, we did a partnership with one of the largest esports teams in the world. We also did a partnership with GameStop, Samsung, and a bunch of others over the last sort of like two years. And what we are seeing is the traditional gamers out there are still very, very negative on NFT gaming. And so even a game like ours, which can compete, genuinely compete with the mainstream competitors that we have in the different genres, we're still fighting a very uphill battle. And I think, you know, obviously we haven't launched yet. We're launching on the 25th of July.

So it's very close. And I think it's going to be interesting to see what happens. But certainly when we've dipped our toe in the water, the reaction from a lot of these large-scale influencers, celebrities, e-sports professional gamers is basically, fuck NFTs, they're terrible. They've taken all the VCs, put all of their money in these crypto games that ended up either being scams or they never came to fruition. And so, screw NFTs. fruition and so screw nfts and that narrative has really stained the the industry and i think it's going to take games like ours and and maybe you know five to ten other titles of the next

couple of years to really turn that narrative around i appreciate look i do want to say just some breaking news here um let me just confirm that this is – all right, so that we could have a peace deal between Israel – okay, the Biden verdict. Sorry, the TV is telling me the Biden verdict is coming out. So there's breaking news coming out now. There's going to be a political space happening. I do want to give Eluvium, Kieran, a massive shout-out. Kieran, we're going to have – we had another, I think, two, three minutes worth of chatting and I had a lot of questions for you.

So I'd love to have you back on the show. Anyone that's listening right now, and I genuinely mean it, not only because Illuvium is partnering with the show, but we've been big fans. I've talked about Illuvium for a long time and we've invested in Illuvium. So I'm really a big fan of what you guys are building.

And I genuinely mean this from an organic perspective, but also as a partner of the show, really appreciate you being on. Anyone that's not paying attention to Web3 Gaming, you're missing out. And Illuvium is one of the leaders in that ecosystem.

I mean that. So well done, guys. Kieran, massive respect for you guys to keep building and investing in the ecosystem. And for the Illuvium team, genuinely mean it. Love what you guys have built.

And I'm glad I'm part of it. And to be honest, I'd love to talk to you, Kieran, and the rest of the team. Personally, I'd jump on a call and do more with you guys. That's how bullish I am. So I'll get a call organized.

Send me your calendar, Kieran. I'd love to speak to you and see if we could do something. Otherwise, I'm going to wrap up the space a couple of minutes earlier just to kick off the space on Biden's verdict. So it's going to start

as soon as I end up here. So end of space. Thanks a lot, everyone. We'll see you on the political space if you're interested. And thanks a lot, Kieran and Alluvium. Bye, everyone.