The Wolf Of All Streets - When Will This Bull Market End? w/ @CodyFight | Crypto Town Hall

Episode Date: May 17, 2024

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Hey David, how are you? I'm great Mario, happy Friday to you Have you been keeping up with the the Senate? Yes, I have been keeping up with the Senate Yes Is it good now David?

Good now, yes I was just um it cool hopefully it doesn't cut out again i was just asking about that bill um the one that was uh the the accounting standard the accounting policy that was um that was vetoed by the senate um and it was introduced by the can you tell us more about it david? What does it mean for crypto? What does the veto mean and what happens next? So here's my take on it. First of all, the rule that was passed by the SEC is not something that necessarily would have been passed or issued in the form that it was.

It was a staff accounting bulletin, so you'll see it referred to as SAB 121. The best way to analogize the SAB route or form of this rule is essentially to equal it to an executive order by the president of the United States, as opposed to going through the legislature in order to get a law passed. And so, you know, as we know, folks that live in the United States, certainly, and generally, I think the audience, you know, we live in a very divided country politically and everything, every issue seems to be politicized to the max. And so Gensler is certainly aware that to the extent that he goes ahead and, you know, brings anything up for purposes of passage through either, you know, his full-on SEC or even more broadly through the Congress,

it's going to get a lot of fire. And so they went ahead and essentially used the staff accounting bulletin to make it a lot more expensive or even restrictive for traditional financial institutions to get into the custody business, which at the end of the day, you know, between us, I don't think that's the biggest problem that anti-crypto people have. But in any event, they decided to do it this way. The interesting thing is the Senate, in a bipartisan vote, not unanimously, but certainly overwhelmingly, went ahead and struck this down, right? So essentially, they're saying that Gensler, you know, overstepped the bounds here and really colored outside the lines. However,

Joe Biden has already said that he will veto whatever it is that the Senate has done. So Biden very much showing his colors in terms of who he sides with, not necessarily the Democratic members of Congress, but Gensler. And I think it's important to take this into context with the, you know, it probably hasn't been spoken at all about on the show. The head of the FDIC is now under incredible pressure regarding sexual harassment inside of the FDIC. And any other agency, any other businesses in this country, you would have certainly the far left coming out and pushing for his removal. And in contrast, stark contrast, Elizabeth Warren has run to his defense. So this is really, I mean, I think the Democrats are showing their

stripes in terms of the executive branch and the legislative branch. It's a really risky time to do that as we run up to the election, because it seems clear, especially on this issue, which is probably not going to get enough play, neither the FDIC issue nor the crypto accounting issue, but it shows really that there is a strict agenda here. This is not about the American people. This is not about access to capitalism, markets, information, anything that's really supposed to be part of the do-good agenda of the SEC. This is about a serious agenda to go ahead and shut down certain business lines and financial lines and go ahead and prop up others no matter how bad or good they act. David, I got a question for you.

Hit me. I don't understand, first of all, the... Uh-oh. Now I don't hear you either. I'm scared people didn't hear me when I was going on for a while. We all heard you. Yeah, we can hear you fine. Yeah. Okay, go ahead. Can you hear me at all?

What possible justification can there be for defending school? I don't understand how to protect consumers. I'm talking about the government-sanctioned channels, you know, goes ahead and approves, regulates, and probably supports. And, you know, if they decide to go ahead and access it from other channels, we're coming down on them through those, through the judiciary. And frankly, we're not going to go ahead and allow this to go through, even if the legislature, even if Congress wants to go ahead and allow it. It's really, I mean, it smacks so loudly of a true agenda against the crypto industry going ahead. And it's not even about not allowing TradFi to get overtaken by this industry. I think it's less about that.

I think it's about a real tunnel vision agenda about promotion of themselves, of Biden and of Warren and of their crew regarding their complete control of power. David, can you hear me now? Won't they get punished in there? I mean, isn't this like a death blow for them? Aren't they going to get punished in the election if they carry on down this? Does the crypto vote actually even matter? Well, there's a couple of things here I'd like to opine. First of all, this particular bill was because SAB 121 was so egregious.

I mean, literally egregious. I mean, multiple attorneys, and you know all of them, they all tell you the same thing, that it's extremely clear that it was overbroad, outside the lines, call it whatever you want. It was an easy issue because nobody who, you know, if you look at all the swing state and all the vulnerable senators that voted, you know, across party lines to vote, it's because this one, there just is no justification. Basically, what it said is, if you're a bank, you can't custody crypto. So essentially pushing it outside the lines, making it was the opposite of consumer protection. So it's just punitive.

It's just punitive to punish people that want to pivot into this sector. Exactly right. But the real test, this was a warm up. The real test is the Fit 21 Act. And yes, it needs work, etc. It's going to go to the floor of Congress. Because in the House, McHenry controls the committee and got a variety, multiple Democrats to agree to pushing it to the House for a House vote. If the House proposes that, and Sherrod Brown, who's the chairman of the Banking Committee, refuses to push it out of committee in the Senate, which is highly likely, by the way, then that will be the bellwether issue that the crypto community will look to hang him and all the other senators and people in the House that voted against it. Now, the reason why that is so relevant, if you look at the memo that the Biden administration wrote saying they're going to veto this, the Sab 21 reversal, which, by the way, I personally think they will not veto it. I think that at this point, people have explained that this is politically toxic, and they won't do it. But we'll see. If they do, then we know where they stand,

and it'll make the fight very, very easy. That would be a gift to the crypto industry and a gift to the Republican Party. So I doubt they will, but we'll see what happens. Anyway. You know, if only we could get young voters who are pro-crypto and fed up with what's going on with respect to fiat to actually vote. They will. The thing is, this administration made two, the Gensler made two huge mistakes. He went after Uniswap and he went after Robinhood. Both skew massively younger, and both are things that will engender passion on behalf of their user base. It's just there. I mean, you go in Reddit, you go in there, you can see it. It's not just crypto

Twitter. And you talk to people that way. It doesn't take a whole lot to swing this election. And so that was political suicide. The question really is going to be, and what I was trying to make the point is, in Biden's memo that he said that he was going to be and what i was trying to make the point is in biden's memo that he said that he was going to veto it he was going to veto it because quote crypto i'm not going to not quote but the the the essence was crypto needs regulation and so taking that and then saying we want to kill the fit act he would never veto a fit act he couldn't because it would literally be going back against you know it would be too ironically you know uh hypocritical even for this administration so it is this is going to be a very big deal and you know selkis who's been leading this charge lately on the political side you know said it exactly the same way it's like this is where it really matters there's a stable coin bill that was killed by the White House and the FID Act was shelved.

And now we'll see when it comes to the floor. I think that's what matters. This other one, what we can't allow it to do is to be a pressure release valve that takes the pressure off. Go ahead, David, just go ahead and add to what Dave said. You know, it's important to take note of the Democratic support here for this. And the fact that also Schumer, you know, went ahead and voted to go ahead and strike down, you know, the rule. So, you know, I don't know. It hasn't. Listen, it just happened in terms of the activity in the Senate. And we haven't seen Biden's veto yet. So we should be prepared for some backlash and some real reaction publicly, directly from members of Congress and then from news outlets on what the, not only the crypto world's reaction to this, but the, but the broader political implications for this may be. And this goes to Rand's point, you know, will crypto, will the crypto vote matter? I don't know. But as of

now, the, the, the specter of crypto is not big enough. It's not loud enough yet outside of the crypto world to matter vis-a-vis the election. However, this type of activity, which flies in the face of really, I think, you know, everything that we are supposed to stand for in terms of, you know, our markets and clearly Democrats agreeing with it and Biden going against his own party, you know, our markets and clearly Democrats agreeing with it. And Biden going against his own party, you know, in the Senate may raise it enough for it to become an issue and for the crypto vote then to matter. We'll have to wait and see. My non-crypto friends in the U.S.

I did a little poll, like poll, I don't even call it a poll, but a little sentiment check with my non-crypto people in the US. And I asked them if they have any idea about how hostile Gary Gensler is to crypto, whether how hostile Elizabeth Warren is to crypto. Most of them didn't even know Gary Gensler was, to be honest. Like they really couldn't give a shit. They didn't even know Gary Gensler was. The election boils down to a few hundred thousand people in a few states.

But what I'm saying is, I agree with you that the election boils down to a few hundred thousand people in a few states. But the question is whether in those states there are a few hundred thousand people who who who would either go to the polls or change their voting direction because of crypto that's the question now i i don't i don't have the answer i'm asking the question i don't i don't know how but you're asking right but you're asking the question at a time where retail hasn't entered crypto yet do you think that would change once we really hit a bull market i don't think i don't think that what what happens is retail is going to be here in the next six months and all of a sudden going to take up the fight like it's one thing that you come into crypto but it's just it's it's only much later that you realize the politics and the dynamics of crypto right like you don't you don't walk in trade meme coins and

then and then realize that hold on gary gensler there's this evil man called Gary Gensler, and his strings are being pulled by the evil whore. And you don't get that. You know what I mean? Sorry, I said whore. But I think if you're sitting on like $1,500,000 of some meme coin or Bitcoin, and then the sentiment is that Biden is anti-crypto. I think that if a vote will directly impact your pocket, I think it could impact the decision. I'm not sure that in six months we can achieve making it an election issue for a substantial number of people.

So the question is, is there already an election issue for a substantial number of people? And particularly in those swing states? I don't know. I'm not there. on the fence in those swing states have now another reason to not vote for Biden, because they've made crypto a topic that now Trump is publicly speaking about, that Democrats want to end crypto. And I think this gives Trump another talking point to pull voters away who may be on the fence about who to choose. I think that there are two things people always forget. It's not about the guy who's mad that, you know, that their XRP holdings got crushed by Gensler, although they will vote. And hopefully a lot of them are in Massachusetts when we talk about John Deaton later. The fact is that this allows Trump to frame a narrative that he is pro-innovation and that Biden is anti-innovation. That is not a framing that the Democrats can afford, because the point that Carlos got exactly right, there are people on the fence,

there's lots of undecideds, you don't know what will push them over. Own goals such as going after Robinhood, which is immensely popular among its user base, is just the kind of thing that piss people off and get them motivated. Those are the sorts of own goals that we're talking about here. We're not talking about crypto DJs. They were always going to vote wherever they're going to vote but we're talking about a lot of people who are serious in the space how many crypto dj's how many crypto dj's do you believe didn't vote last last poll and what i think what i'm asking for here is i i wasn't a voter in the us in the last elections and because i wasn't a voter i didn't pay attention to like what voting issues were but i think it wasn't an issue. There was just an opinion poll done a couple of weeks ago that was extremely clear. Basically, the numbers boil down to when you get down to the bottom, about 12% of voters in the swing states

consider crypto or more like, you know, the broader version, Bitcoin, crypto policies, economic freedom, et etc as as important issues like really important and i have two questions i have two questions number 12 first question is how many voters how many um how important the crypto vote is and then the second thing is how many of the crypto voters do we think, like how substantial is the number of crypto voters that are going to shift from either not voting to voting Trump or from voting Biden to voting Trump because they were neutral.

I think what I'm hearing you say is they were neutral last election because crypto wasn't an issue in the last election. So you genuinely voted Democrat or Republican. I think now it's become a case of if you're voting Democrat, you're basically killing crypto. And therefore, people are becoming more passionate. So the question is… It's an integer number, Ran. I don't know whether it's one percent two percent six percent but it's

somewhere in those meaningful single digit of swing you know actually changing votes that that is what the the opinion research basically says all of the things being equal now obviously other issues happen it's only may but you know there have been a lot of people. When you get people like, you know, Larry Fink and Mike Novogratz, you know, questioning Biden directly, Scaramucci, who's been promoting Biden, actually tweeting, this could cost you the election. You know, it matters. You know, people, the old Shakespeare quote, we think thou doth protest too much. You're seeing it. Okay, what's that quote? What does it mean? People like Sir Amici Posting, we all love Sir Amici here,

is it just them protecting their books, which I don't blame, and I think the voter will end up doing as well. The voter could hate Trump, could even like Biden, could hate Trump, like Biden, could still vote for Trump if it means that they expect their whatever paper holdings to do better. Yeah, I don't think that's not what Carlos and I are saying. What we're saying is there's a lot of people out there that hate both of them and are going to choose the lesser of two evils and are going to, in that particular case, they're going to vote in a way that they think is better for the future of America, which people will equate with their own holdings, because no human

being, we all like to justify what we're doing. I mean, in my case, I know what I'm doing. I mean, I joined crypto from traditional finance because I really believe in it. I'm probably a minority, but a lot of people are going to convince themselves of that. Well, Scaramucci knows exactly what this is doing to Biden. Scaramucci's, you know, not pulled any punches about his views on a Trump presidency. And now he's put in a very tough position here because the person he's endorsing is basically promoting everything that's against his bags and his fundamental beliefs. He's really conflicted here. And I think he sees it very aptly that this is really killing

Biden's reelection chances. David, sorry, Ryan and then David. I was just going to say, I don't remember the last election where it wasn't choosing between, you know, the worst of, or the best of two bad choices. And with Trump, it's, with Trump, he sees an electorate that likes crypto.

He's like, oh, yeah, I like crypto. So he's pulling in the electorate, and it's just a game. And we're playing a game of chess here. And you have politicians that are just going to follow where the money is coming from along those lines. And when it comes to American politics, I'm just so disgusted. I just, I don't like to be involved at all, but I realized with the future of crypto that it's a big part of it. But in the meantime, we have a lot of crypto people just avoiding the US altogether. And we're getting lumped in with categories you know, categories like, are you in North Korea or the U S?

Oh, I'm sorry. You can't be a part of this service. I mean, I've always said, I've always said that the U S is exactly China, just with a bit of marketing department. Did you,

did you see, sorry, go ahead. Yeah. So, I mean, I've always said that. So yeah,

but carry on Mario, cause I want to actually ask a different question. Yeah. I was going to say, did you see the, yeah, I've asked a good question for you and I want to go, there's so many, I've always said that. So yeah, but carry on Mario, because I want to actually ask a different question. Yeah, I was going to say, did you see the, I've asked a good question for you and I want to go, there's so many questions I've got. So Ryan, I want to go back to your interview with a bunch of VCs.

I've got so many questions on that. I'm not sure how long you have. There's also a Bloomberg piece I want to bring up that Scott sent me and I'm sure you've seen it, Ryan, talking about, it says a familiar path to instant crypto windfalls reopens. They're talking about KOLs getting big discounts and funding rounds, which is really interesting. But David, I want to get your thoughts on this and then kind of link it to another question.

Is that another indicator that the SEC is losing their battle, their war on crypto? I think the SEC, to go to your question, I think the SEC is holding on to whatever it still has. I think even if Biden gets reelected, Gensler won't be the head of the SEC afterwards anyway, but it may be someone that picks up the torch. But let me go back. This is kind of, you know, with respect to what this... Wait, wait, wait.

Why do you say Gensler won't be head of the SEC if Biden wins? I mean, surely they have no grounds to remove him. Not that they need grounds, but like, why would they remove him? Because it's just the way history rolls. It's very rare for a head of the SEC to roll through two presidential administrations. I mean, I think he gets a promotion if Biden wins, David. To the treasury? Possibly. I mean, I think he gets a promotion if Biden wins the Treasury. Possibly. I mean, he's been he's been a great steward in Biden's view and he's he's done exactly what Warren wants. I mean, listen, I'm no political wonk.

I'm just saying, Rand, the way things usually go is that the heads of the SEC don't stay around. You know, they've kind of done their time. You know, whether Biden has a more aggressive and insane agenda for term two, I don't know. But more, I'm sorry, but the point I want to make in terms of where we stand, first of all, let's not go, I know we want to go ahead and kind of get out in front of the vote in the Senate. I don't think the vote in the Senate really makes whatever impression it's going to make until Biden vetoes it. And then people actually can go ahead and write stories about it and talk and, you know, essentially show the contradiction that's going on here. The second thing is, you know, in terms of politics, I mean, forget about my own personal

bent in politics. I believe certainly that Trump is going to win this election. I mean, forget about my own personal bent in politics. I believe certainly that Trump is going to win this election. I mean, the fact that it's as close as it is right now, the criminal case against Trump in New York seems to be going awfully. Michael Cohen's testimony has been shot down and he's been proved a liar in so many ways. That's just fact. I don't know if the jury is going to have enough to go ahead and convict Trump. If he doesn't get convicted, which I don't think he is, he's going to go ahead and run an enormous victory lap. He's in court right now while his opponent is the president of the United States and is also on the campaign trail. And he's in a courtroom. The guy hasn't even flexed his muscles yet. And again, I'm no Trump lover, but I believe the way

the numbers are working, if the election is that close right now, Trump only has to gain from here to the finish line. And Biden only has from here to the finish line to lose votes, especially if he's doing stupid stuff like vetoing this, you know, this Senate move. And the fact that he's letting Warren out there, you know, shielding the head of the FDIC from sexual harassment that's going on rampantly at the FDIC. I mean, there is just, I believe, and crypto is not, you know, the only issue here. There's lots of other issues with respect to foreign policy that this guy's got his foot stuck in a lot of things. I just believe the way that the tide is going to move from here to the finish line is just in favor of Donald Trump. I mean, it's not, again, it's not about

personal political bent. It just seems to me that factually, that's the way things are stacking up here. And so therefore, I think it's going to be a really, really good time for crypto. And imagine what a disastrous outcome it will be for Biden if he does decide to veto this and they flip it and kick it back to him by overturning his veto. Because this is one issue that could really inflame Congress. And if he gets flipped on his veto, that's really going to show weakness. James, I wanted to get your thoughts on the discussion and then linking it back to the markets before pivoting to a completely separate topic. Good to have you, James. Yeah, I mean, I haven't got a brilliantly developed view or knowledge of US politics, but it just does from an outsider looking in.

It does look like at least of the odds that Donald Trump is going to win. And we know he's very pro-crypto now. And you combine that with the outlook for monetary policy, the outlook for economics, I think, and post-harving, I think it's quite, well, very supportive for Bitcoin. And your thoughts on the markets in general, I'm going to run back up to discuss the VC model earlier, but your thoughts on the markets, what do you expect to see over the next few months? Yeah, we know I've been saying this all along and I'm not saying I told you so, but I think

the markets fell into a kind of false sense of security over the last couple of months, extrapolating some good macro data and then saying yeah this is going to be great for you know interest rates are not going to be cut for a long time now and that obviously dented bitcoin prices but i think it's becoming really evident now particularly economic surprise index that is the index that measures whether delivered results are beating expectations. So now they're really starting to miss and it's going it's gone negative that index. And that historically spells quite bad news for risk assets like equities, but I don't think it will do Bitcoin in this case.

And I think people are what is also highlyoding is that the analysts and the futures market is overly bullish about the outlook for economic growth in the US. And it also comes at the time of, obviously, the elections. But I do think this will be very supportive for Bitcoin prices in the second half of the year. Talking about the markets and Bitcoin's price, I want to read out two quotes here, one from JP Morgan, one from CryptoQuant CEO.

I'll go with, I'm going to read out JP Morgan's quote here. Bitcoin prices will have limited upside ahead due to the limited inflow to spot Bitcoin ETFs. It was a bit surprising to me. Yesterday's inflows were pretty impressive. I'll try to find them now and read them out. I've got them here. Inflows yesterday were 257 million. Grayscale had a net inflow of 4 million.

And then obviously iBit had the biggest inflows at 93 million. I've just done this on how, and if anyone could maybe elaborate, how is that limited inflows into US spot Bitcoin ETFs based on JP Morgan lackluster demand for Hong Kong spot Bitcoin ETF and Ether ETFs, which is also again surprising if you look at the total size of the ETF market in Hong Kong. The performance wasn't really that bad, but when you compare it to the US, it looks bad.

James, would you say the inflows into US spot Bitcoin ETFs are quote-unquote limited? Don't spend time looking at the brand of sell-side research from places like JP Morgan, Morgan Stanley, etc. has deteriorated dramatically over the last 10 years. Why do you think that is? Is it misaligned incentives, corruption or just pure being out of luck? It's the unbundling of fees for research and that led to much greater transparency of fees across in the US and Europe and it meant that

people really scaled back research operations so it's purely like a man count you know a body count thing really but but in terms of the flows this year this week sorry we've seen 684 million dollars of inflows globally obviously the majority of that over 500 of that is from the us um he's writing a little bit in that we've seen 82 million dollars of outflows from hong kong so a little bit disappointing but still year to date 224 million dollars in hong kong uh but yeah we it looks like the first week we just had that seed capital flow in and then not much else has really happened since then. But it's not just the US. You know, we've seen $26 million of inflows into Switzerland this week and a little bit into Germany.

So it's a really, I think the most important story, though, is what's happening to Grayscale or what's not happening to Grayscale. The outflows have dried up completely. I mean, we have been averaging the last couple of weeks about $200 million The outflows have dried up completely. I mean, we have been averaging in the last couple of weeks about $200 million of outflows this week so far. So the first four days of this week, we've seen $24 million of outflows.

So people have seemed to have stopped selling out of grayscale at the moment. And let me read out the CryptoQuant CEO and what his analysis is. And it says Bitcoin is in the middle of the bull market cycle. I'm going to go to Dave on this one. Dave and Ryan. So Bitcoin is in the middle of the bull market cycle and this market value

is growing faster than the realized market value. This trend will continue for about two years if this model is effective. If this model is effective, the bull market cycle may end in April 2025. We'd love to get your thoughts on this, Ryan, Dave, anyone else?

Well, I mean, first of all, trying to predict to the month seems like a fool's errand. But the fact that it's a bull cycle makes sense. I tweeted the other day that I think that my original, you asked me not too long ago, where I thought we'd be at the end of the year or in 12 to 18 months. So we'll use it that way. And I said north of 100,000. I actually would double that now for lots of reasons. And as long as we're –

You double – sorry. You double the peak of this current cycle? I think this current cycle sees a high somewhere between 2 and 240. That's what I actually believe. Now, I know that people think that that's it. I hate making those points because when you say them, people think I'm looking for clickbait. No, every other cycle, when you look at it, you know, four time, you know, a basic 4x doesn't seem crazy when we consider the fact that the real base case that the investors, the people who are buying Bitcoin now are doing it because they think it will exceed match or exceed gold's market cap, which would

basically be six to 700,000. So to think this cycle, we could get halfway there. Yeah, not crazy. And if you look at it, it would be very similar to past cycles. And so there's lots of reasons why that could be the case. You know, it's one of those things when you see the technicals, which I tend, you know, technical analysis is more of an art than a science. But when you see the technicals and the fundamentals aligning, it makes sense. The other one that I like is if you look at the network and all the fundamentals underlying the network, it's more or less 4X where it was the last time it was at this price level. And so for it to get to the same level of exuberance doesn't seem crazy. So there's lots of reasons to think that. But the biggest reason is people are buying Bitcoin as a hedge against distrust institutions and governments that are printing to oblivion.

Part of me wonders, you know, is it a self-fulfilling prophecy where we all talk about the high being, you know, fall of 2024? Sorry, the high of being fall of 2025. And we're all looking at the cycle. So is it the fact that we're all looking at the same cycle and predicting the same outcome that we're going to make it happen? For me, I don't really do the tea leaf reading with the price charts and try to look at the patterns of the price charts going up and down. I'll just do a calculation on the difficulty of the network. And I'll look at the trend of the difficulty of the network going up based on how much miners actually have to make in order to keep the lights on. Because we have a consistent cost in power and OPEX.

Those are actually very slow moving and slow changing numbers. So the real cost is the cost of the machinery and the price of Bitcoin versus the difficulty of the network. So if you project out a modest difficulty increase and you can fairly accurately predict where the Bitcoin network needs to be as far as price per Bitcoin, just so miners keep the lights on. That's generally what I look at. But once again, we're all just trying to look at the magic. I want to make one markets point, though, that's from a structural point of view to answer your question, Mario. And that is bull markets are generally characterized by larger volumes on up days and smaller volumes on down days, with the down days being more, you know, more, like, you know, basically absence of

buyers, more apathy, and bear markets are the opposite. This is clearly a bull market in terms of that structure. Today, the volume is significantly larger than it was a couple days ago. And yeah, because it's an up day, right? And when you see that sort of thing, it makes sense. There's a bid for Bitcoin, at least forget other things, although today Solana and others are ripping. The fact is, there's there's there are bids that scale in by when the markets are dropping, and the sellers aren't terribly aggressive and haven't been. And when there is buy pressure, the volumes increase. And that is structurally what you would expect to see if the market was a bull market.

Is there any specific narratives, Dave, to the next discussion with Cody Fein? Is there any specific narratives that have been interesting for you in this current cycle or any that are being ignored well it's not ignored we talked we wait we were beating it to death which is half the world's investable assets are in a market that is literally trying to take the crypto industry at least elizabeth warren is and push us offshore i'm in miami and i live in miami beach i don't have very far to go to be offshore right she you know it me, it's very personal. But the fact is, is that that's the narrative if and the reason the Bitcoin ETF made such a big deal is because it

became a way for the world's largest, you know, investable pool of assets to get into Bitcoin, and it's just started. It's just started. And that that's why but we had, we had the the bitwise guys on a space earlier. I can't remember. It was a couple of weeks ago. And they were talking about how the inflows in the early days exceeded their expectations. But they were also a bit surprised.

I can't remember what I was going to say, but they were a bit surprised by the slowdown since. And that was two weeks ago. I think we've seen the inflows kind of improve in recent days in the last week or so. I understand something. I saw Matt here on a listener, but he's not up on stage. the inflows kind of improving in recent days in last week or so. I saw Matt here, but on a listener, but he's not up on stage and I don't see him anymore. But the fact is, is you can't look at inflows. You have an investable universe, you have people who are qualified to buy in that and retail in the systems that are allowing them to buy it and some are not

famously Vanguard, which will pretty much clearly allow them to buy it through their brokerage platform later and that's gonna get ebb and flow right there was a huge surge in the beginning just like after a stock IPO so you see it it's in an IPO day and now the yeoman's work is going on and you're seeing it you know you know one at a time every you know bitwise mad is described it others have described it they're having meeting after meeting after meeting with ria systems with investment consultants with financial advisors etc and that is paving the groundwork for uh larger investment maybe we made a very big deal of the state of wisconsin state of wisconsin is a large financial a large pension fund. Why? Because in Wisconsin,

there's one, whereas like in California, there are many and et cetera, but it's still large. And people made a big deal of it. They put 0.1% of their assets into Bitcoin. If there's anybody out there who believes that they're going to stop at 0.1, I'd love to take the other side of that bet. I can't find anyone who believes that it won't be at least 10x, if not 20 or 30x to get to 2% or 3% at some point. And that's one system. So you have to understand that this takes time. I mean, every single person in the ETF space, I mean, James and Eric and others were telling you that this is going to be a six to nine month effort to get over the line, just to get the ability for CIOs of funds to be able to say yes. And we're not even at the six month level yet. So understand that it has exceeded expectations on every metric. Okay, enough. Sorry.

Carlo, any last thoughts on this point? No, I think the analysis is spot on. And I think I have to agree. And the interesting variable in this is going to be now the ETH ETF. You know, ETH has been underperforming right now. Everyone is waiting to see if the ETF is going to get approved. And what is that going to do to the continued adoption of ETH? I'm also talking to Carlo.

I want to get more lawyers on Monday's show, Carlo. Now, before we go to Cody's fight, it's going to be a really interesting show. There's an article, shut up with the wrong one in the group. There's an article by Bloomberg, not sure if you saw it, Carlo. It's about the KOL allocations. So let me just give a brief overview on wrong link. This is it. Anyone on stage that wants to see this, I could DM it to you afterwards.

But yeah, let me just make sure that the agenda is ready for the team. Okay. So yeah, there's an article put out on Bloomberg, and they're talking about how key opinion leaders get big discounts on funding rounds. So what happens when projects are raising capital, they do a KOL round. So yeah, there's an article put out on Bloomberg, and they're talking about how key opinion leaders get big discounts in funding rounds. So what happens when projects are raising capital, they do a KOL round.

They go to KOL and say, hey, we'll give you an allocation, sometimes at a really heavily discounted price or short investing periods. And what you have to do is talk about the project, which I think is a fine model as long as it's disclosed, like a way to compensate influencers or anyone that has an audience that trusts them without actually having to pay dollars for that reach. And again, big disclaimer here. And that's what the article talks about is it's got to be disclosed, but it's also not working as well as it used to work. I think it's kind of shifting from big celebrities to even smaller crypto

influences. I'm using the word very loosely, but anyone with reach where the audience trusts them. So it's no longer a big celebrity that has massive reach. It's actually a bad look now for projects. They reach out to even small accounts, but with an audience that trusts them, that follows them, and they give them great allocations. So yeah, I'll let Scott and Ryan talk for themselves, but I'm sure they get allocations like this on a daily basis.

We get them on a daily basis as well. But a lot of KOLs don't, we don't put ourselves in the KOL bucket, but a lot of KOLs don't disclose those allocations. It was a great piece done by Bloomberg. I think it lacked a lot of details, but we're pretty transparent here on the show. So I want to actually dig into it, get Ryan and Scott to kind of debate it and debate the model.

I think we agree on most things and disagree on a few things as well. And Carlo would love to have you on the Monday show and we'll get a few more lawyers to kind of talk about the legal risks as well. Because I think a lot of people

on crypto don't pay attention to that, especially in the bull market. So that's going to be on Monday. We're not going to do a show on the weekend. In the meantime, we've got Cody Fine here. Cody, you guys,

I think we're invested. Yeah, we are invested in Cody Fine. And we're invested in a whole bunch of games. It's insane how many Web3 games there is right now. Cody, I want to talk to you first about the gaming narrative. We do a lot of shows on this. We used to discuss it a lot on Crypto Town Hall, especially in the bear market.

But we'd love to get your thoughts on the gaming narrative in general. Not sure how long you've been building for, how long you've been involved in Web3 gaming, but is it getting the love? Is it getting the capital inflows it deserves? Or do you think it's time hasn't come yet? Thanks. Thanks, Mario, for having us here.

I'm Andrew, one of the founders at Codified. That's a good question. And, you know, for us who've been building for three years because it takes obviously takes a few years to you know have a have a good game even started in some cases um i think uh yeah the game narrative kind of hyped died die down, but it hasn't even started yet. Yeah, I think. Okay, hold on. When did it slow down?

I'm curious. You could see that. Mario, I don't know if anyone in the audience can hear. Could you? At least I can hear you. No, it's you. It's a glitch for you, Carlo. I'll bring it down and back up, Carlo.

So hold on. So you're saying that the gaming narrative has slowed down. When did it slow down? I'm actually curious on this. I think it kind of baked out beginning April. You know, at the beginning, there was such a mass expectation, you know, because there's been so much cooking during beer and, you know, there's always like a projection.

One of the next big things in crypto is going to be, you know, gaming. And, you know, then we see in February, March, release after release, release after release. Yeah. Even the topic you mentioned, you on kls it's like uh this market was driven as well by by qls influx and there weren't even available curls at that moment uh you know because we've been building an apparel preparing for tg as well and there was it was it was hard for you to get k was to support you back then uh yeah yeah yeah straight away you know it's like uh exactly crypto's crazy exactly you know it's like bloom is, I think, three months late with this analysis

because you probably need to talk to builders. And as well, you see that quite many guys who actually came in in April, they struggled with this. Yeah, so just kind of give an idea for the audience. I think this doesn't apply only for gaming. Came in in April. They struggled with this. Yeah, so just kind of give an idea for the audience. I think this doesn't apply only for gaming. So what happened, and I talked about it earlier, I think two days ago. We had another sponsor on the show.

It was, I'm so bad with this. They launched today. We're invested in it. I did a whole show for them. I bet I am with names. Squidgro, I think it was. And let me just check what they're called. But they see what they can subsequent sorry, sub squid. And they're sitting at a couple of billion dollar evaluation they launched today. It's pretty impressive. We did a countdown

show for I did a countdown show for them earlier in the morning. And we had them on the show two days ago, we're talking about how things have slowed. And they did pretty good. They did 100x on seed. But that that's that was an anomaly. I think the market slowed down a lot. So we're just for the audience, we talk about projects that raise money privately and launch a token. gaming was leading the kind of the massive hype that we saw in the first quarter of this year, January, February, March just a massive hype uh day after day it's projects doing 10 28 it's not sustainable

it's crazy and it was just so quick as well caught everyone off guard but it's and it was okay i think what cody is saying right now cody fight is saying that okay well play the key role in leading this but that has slowed drastically you're right and cody i don't think it's just slow for gaming the whole the whole space slowed, retail slowed. I mean, Scott and Ren were talking about how their YouTube viewers kind of dropped by 50%, 60%. But I think just gaming is leading that bull run, was one of the kind of two or three narratives that was reading

this kind of quick mini bull cycle. And that's why you saw gaming kind of slow down in general. But we are still seeing, you know, we're investing in games at least five a day, not a day, a week right now. So I think it's still a lot of inflows into gaming. And I still think gaming will onboard a lot of users into Web3. I'm not sure if you, I think you do agree because you said it hasn't even started yet.

Yeah, indeed. You know, it's like it was seen that through the launch pads as well, you know, that retail, retail investors, they suddenly started preferring, you know, infrastructure projects. AI is still, it's still at,

at the hype, but then when you look around how many, how many projects you have with real AI embedded, you know, or you just use the tag and that's it, you know. Yeah. So, yeah, I still think AI, decentralizing AI is still a bit early. I think it's a debate for another show.

But I know you guys did a token launch a few days ago on DAO Maker as a launchpad and Gate as an exchange, which Gate has been pumping tokens out every day three to four tokens a day um i would love to get your thoughts on on what codify is let's dig into what you guys have built um yeah so and um you know what differentiates you from other games great yeah thanks uh thanks for the question so are we building a gaming platform for uh ai and human players. And it started with an idea that it needs to be a simple, quite complex game for tech savvy players. But later on, based on the feedback, we see that people like what we're building and we're adding more and more accessibility for mobile, for desktop users. So it's browser-based.

You can play via mobile, desktop, and API. You can, you know, what other games would prevent, we actually want to encourage the creative flow of gamers. And, for example, botting in other games is prevented but here we actually encourage you to build the bot and start a very basics in your AI journey at the same time you can have multiple of them so that solves the problem of multi counting you know and that allows you to automate your gameplay because you know and that allows you to automate automate your gameplay

because you know when you look historically there's quite many quite many games you know the people uh try to break even they like you know and they like to build as well alongside so let me let me take a step back uh how do you so i ask questions pretty selfishly just for the audience put themselves in my shoes. I ask questions as an investor like, all right, if I want to deploy capital on a project, invest a part of the project, what are the things we look for?

And one of the obviously most basic metrics is just users on the game. How many users do you have? Because I'm looking through your Twitter and your engagement is pretty impressive. Yeah. How many users do you have? Because I'm looking through your Twitter, and your engagement is pretty impressive. Yeah, so during alpha testing, we honed 40K plus players in the game. We scored...

And how many daily? How many daily do you have? Daily, in the last two months, there's been over 13 000 uh players uh daily literally daily play playing and daily players yes yes yes yes yes because we you know we kicked off with gaming guilds uh we had more than 10 gaming guilds uh uh joining in all this in all this journey and yeah we really put the game to the test you know because uh uh we built everything we have ready infrastructure for us it's it's time to scale

and uh you know with 8.5 million games already scored in our you know system we have a significant amount of data and confidence that on which we plugged in our main economy driver, Seatalk. Okay, can I, Seatalk is your coin. Can I ask you another question? I remember in the previous cycle, you'd have games with no users, like still a beta, not even a beta phase yet. And they raised money at a scary valuation.

And the cool thing, that's actually a good thing. You're seeing games right now, like you you guys you guys had a very modest valuation you launched you know absolutely kind of when the mini bubble kind of popped and things quieted down again um you've got so many users and i think your valuation is sitting at again this is not financial advice just for the audience and just to be clear here um but uh you know your valuation is sitting pretty low, which is, in my opinion, a good thing, because it represents that the space has matured, where even having a lot of users is still not enough. So my question to you is, what are some indicators to look for? And obviously, the basics will be how many users, understanding the token economy, the utility of the token. But what are other things to look for to make a successful game?

Since now users alone, considering so many other games have a lot of users, we can't get adoption, users alone are not enough to make a game successful. Yes, yes and no. You cannot move without users because once you put the game to the test, once you have a full LiveOps team set up, that's where you focus on removing all the pain points and focus on the boost points. Focus on what they like and focus on in our case we focus on the competition and you know we all three founders are quite competitive gamers so a competition uh is is one of the fun

factors and especially if you bring in you know the the full ownership of your of your in-game assets uh and then ability you know to actually put your assets on the table and challenge another opponent for that that's where competitive fun and that you know thrill kicks in um yeah so i think it's it's it's still a lot you know we have we approach things with the builders mentality you know we might not get that uh we don't focus on that hype you know that we don't go for the valuation and yet uh yet for us uh we establish that base of players but you know uh if you kill all the competitions they they will die out at the moment you know so what what makes uh for people stick to uh stick to the game what is the user retention you know in there and is that is that sustainable i think uh we need to look at at least you know

three months because questions three months figures you're good to look for yeah and and the other thing for the investor i think it's important to understand how quickly the game can monetize the audience and in this case what do you think i've audience. And in this case, What do you think I've got? Yes, sorry go ahead. In this case, you know, when you're building on chain and there's always a question, you know, do you target Web3 audience

or you go for so-called normies? So yeah, the question, how quickly are you going to monetize Web3 audience? And then what about the the mass crowd the norms how yeah so so first i'm just so bullish on gaming like i swear just you've just got a use case for decentralization that has so many users it's very easy to understand very relatable um and it's getting saturated which is really good it just seems that competition's increasing which which forces more innovation.

We've got a couple of minutes, exactly two minutes here. Let me ask you another question about, and that's the debate we've had. You raised money. You got a bunch of VCs. You went through a launchpad, a bunch of launchpads, the GameFi and Dowmaker, and I'm not sure what others. And then you also listed on on gate as far as i'm aware what are your thoughts and that's the debate we have a lot on this show what are your thoughts

on the entire vc model and crypto is it flawed does it work well do you enjoy the experience what are the pros what are the cons ah twisted one i like it um to be very honest, it's getting better. It's definitely getting better. And in this cycle, you can see that across tokenomics. I still think it is flawed because, you know, initially, it all started, you know, those manifests that Web3 is going to replace, you know, crowdfunding and straightaway from communities that goes to builders and vice versa. But it's natural. Where's the capital? You have a better spin off. So it's getting better. I think it's still flawed and definitely it needs to be improved especially if we look you know at the long-shelf

products like games and the expectation you know to kind of roi you know 100 roi in six months that simply doesn't work obviously i mean yeah that simply doesn't work. That doesn't stick, you know. So once we manage expectations of VCs of the market and, you know, reduce that gambler's mentality in the space, I think things will even out, definitely. Yeah, I think the debate is going to continue. Last one, did you read that Bloomberg piece on the KOL model? Yeah, you just dropped it. What are your thoughts? Last quick question because I went over time. What do you think of the KOL model in crypto?

On one side, the one argument is like hey KOLs and again I use that, so just for disclaimer, not all KOLs are the same. You've some some people call coin telegraph a kol coin telegraph is a media company uh for example we we don't call ourselves a kol we invest and we have various media assets not only just twitter we own uh various other channels that you guys all know and watch um and then it's kols where it's just one person with a following and they just talk about different product projects so not all kols are the same, but the whole model is where KOLs get a discount at investing and then a better vesting schedule in order to talk about a project. One argument is like, hey, that's unfair. Why should they get better offers than everyone else?

Even VCs don't like it sometimes. And other VCs, they do like the model because they see the value of having people with a reach talk about a project and projects like it because they don't have to pay cash for these people. They can just give them tokens. What are your thoughts on this model? Are you on the side of like, hey, it's not a nice model, but it's part of the game that everyone's playing? Or it's a model that works as long as the disclaimer is involved and everyone's transparent about it? It's a game in this cycle. At least it started like this. Well, let's say to put it bluntly,

you know, if you think from digital marketing perspective, those influencers, basically their purpose is to influence the buy pressure within their communities.

So that whoever got first, got the better price can can then execute can then dump and exit earlier so when you think about about this you know i think uh for like when the community when retail is looking is looking at other projects. It's important as well to look at the vesting schedules for each round. I think... Oh, shit, I'm just looking at your coin right now. Okay. I just thought I'd open the coin on CoinGecko. I know you should check it out, man.

It seems that the audience really enjoyed our chat. So again, this is not buying advice. Obviously, I'm biased here. I'm a token holder. But you guys went up 10%. So well done. I think that chat went well. I should start looking at the charts of projects as we talk about them. The SEC is going to love that.

On a serious note, I love having these chats, like a very frank discussion about what you guys do, about the market in general. But we didn't dig into the game too much because I think it gives the idea to the audience, when I have those chats, it kind of gives the idea of the people behind the game. If you really want to understand what Codify is, you know, they could have an incredible game, they have a lot of users and the game is a killer game and it could be a hidden gem. Or they could have more tokenomics that you guys in the audience could check out and say, okay, the game has got a lot of users

but just a token. It just doesn't add up and, you know, I don't think it's going to be a – I think the tokenomics makes sense. I don't know the answer to that. You know, we've kind of bet on the team. I think there's a lot of opportunities. The games that do win will do extremely well, in my opinion.

But at the same time, I think games have a massive failure rate. So you've got to be very, very careful. But, yeah, look, glad to have you guys on board. I appreciate you coming on the show. And we've had another show together already. Cheers. And I appreciate it. I'm happy.

Look, I like it. I like to see that you seem like a really nice guy. And I like this honest, open conversation. And I like that the audience liked it as well. Just look at the chart. And that was like the biggest pump you've had since you launched. So, you know, I'm glad I enjoyed this conversation and we kind of, it was a very broad, organic conversation. I didn't use one of the questions you guys sent me.

I never do. I don't know why the team always asks the project to send questions before a show. I never use that. I just like to ask questions. Yeah, I just like to ask questions that if we're on a call, I ask you those questions on a one-to-one call. But anyway, look, I think we went away over time. Really appreciate it from the audience.

We'll be back on Monday. We'll be discussing, unless there's some news on the weekend, we'll discuss the whole KOL model, that Bloomberg article, as well as Rand Shaw. Rand had a really cool show today. I didn't watch Scott's one today, but I saw Rand. He had a bunch of VCs and he asked him some questions. I think you get a lot of insight there.

And one thing we'll promise the audience is that we'll continue being very transparent about the good things, the bad things, the mistakes we make, good decisions we make, and hopefully you can copy our good decisions and be careful not to make our mistakes. So I appreciate your discussion, everyone. And we'll see you all on Monday. Thanks a lot. Bye, everyone.