This Week in Startups - YouTube shorts vs. TikTok, Crypto contagion, Twitch ad changes, China found aliens? | E1485

Episode Date: June 15, 2022

First, we’ll dig into the creator economy: Youtube shorts almost has as many users as TikTok (3:06), and Twitch is changing how they pay creators (24:00). We quickly hit on some breaking news as The Federal Reserve approved its steepest interest rate increase since 1994 and signaled it would continue lifting rates this year at the most rapid pace in decades (38:20). The crypto contagion continues, so we’ll give an update (41:50) and discuss the full context of MicroStrategy CEO Michael Saylor’s Bitcoin comments in 2021 (54:13). And we can’t leave without talking about Aliens. China thinks it has a sign (1:16:24). (0:00) Jason and Molly introduce today’s show (3:06) YouTube Shorts are gaining ground on TikTok (13:59) Swag.com - Visit https://swag.com/twist and use code TWIST for 10% off your order! (15:05) TikTok’s owner Bytedance has generated massive revenue across TikTok and its Chinese counterpart Douyin (22:44) Coda - The All-in-one doc for teams, get a $1,000 credit at https://coda.io/twist (24:00) Twitch is expanding its ad incentive program for creators (37:09) Odoo - Get your first app free and a $1000 credit at https://odoo.com/twist (38:20) BREAKING: Federal Reserve approved largest interest rate increase since 1994, signaled it would continue lifting rates this year at the most rapid pace in decades (41:50) The crypto contagion seems to be accelerating (54:13) MicroStrategy CEO Michael Saylor’s comments on Bitcoin from March 2021 (1:16:24) China thinks it may have detected signals from an Alien civilization

Hey, everybody, I got a lot of energy today. I'm in the zone. I am in the zone, Molly. And we have a full docket. You've been working so hard with our three producers making these beautiful dockets. What's on the docket for today? I know we have such a good show today. I have a lot of energy too.

I played a little basketball on the street. Like it was the suburbs on a summer night with my child last night. And I like woke up so refreshed. I want to get a little streetball going. Now that I lost the weight, I could do that. It's delightful. Really, it turns out I'm not good at that. Got a little practicing to do.

There's a little box behind the basket. Just put the ball into that box and you got a pretty good chance of it going in. It's fine up close. It's the further way I get. Ah, yeah. Yeah. It turns out. All right.

So we got a lot going on the show today. We're going to get to the crypto collapse. Don't worry. But first, we're going to dig into the creator economy, which is still red hot. YouTube shorts has almost as many users as TikTok. And Twitch is making some changes in how they pay creators to stay in that game. Got it. And this is where we get to the bad news.

The crypto contagion is continuing. Looks a lot like the actual contagion movie at this point. It's taken companies out. We will give an update on the hedge fund, Three Arrow's Capital. Yikes, Celsius. I also want to check in on Sailor, the guy from Micro Strategies. He's supposed to have a margin call at 21. And I saw we dip below 21 to 20,000.

So I need to know if he got margin call because that seems like that could take the contagion in a very dark place. And you know what? We can't get through a show without talking about the aliens. They're coming. Apparently, I mean, if 2020 through 2022 has not been crazy enough with Trump, the pandemic, everything, aliens, apparently China thinks it has received a signal from a more advanced species than us. So it's going to get interesting.

It's going to be a great show. Stick with us. my God. This week in Startups is brought to you by Swag.com is the place to buy, customize, and distribute custom gifts and promotional products. They work with some of the best brands like Yeti, the North Face, Ember Mugs, and more. Visit swag.com slash twist and use code Twist for 10% off your order. Coda.

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All right, we're kicking off today with something that is neither crypto nor layoffs, although we will get there. Do not worry. But there is, and it's just interesting, still plenty of heat in the creator economy, and YouTube is doing its best to catch up to TikTok. And evidently, it's working. According to the Wall Street Journal, YouTube shorts,

which felt a little bit like one of those Facebook quote copycat things. Yes. Is evidently gaining ground on TikTok. Google disclosed that YouTube shorts had one and a half billion monthly active users out of its 2 billion plus monthly users. So that's pretty much the size of TikTok now. Third party analysts estimate that TikTok is about 1.6 billion monthly active users.

So Google just like using that scale and apparently create or lock in to be like, no, we're not having it. them right out of this guy. Yeah, I mean, TikTok is at 1.6 billion on the active users, but obviously it's owned by ByteDance. They are based in China. They are banned, I believe, in India and some other countries.

And they should be. I know people love the product. The product is quite addicting. It's very elegant and, you know, got a lot of great features. But honestly, now that YouTube's got to stop and running, I think the government needs to really think and hold the Chinese government to reciprocity.

If we allow TikTok here, They need to allow YouTube there. And if they don't allow YouTube there, we need to turn off TikTok here. Because, you know, there's all these rules we have for companies here that the United States companies have to play by. And, you know, China doesn't have to. And we have no ability to enforce any of those rules. We don't know what they're doing with user data.

They're not going to be listed on public markets here in all likelihood, you know, if D.D and the other companies. So, Molly, like, do you think we should even allow TikTok in this country if it's being used by a communist country to spy on our citizens? Well, in the interest of journalism, I should say that TikTok claims that its servers for its U.S. product are located in the United States. There's an American CEO. Okay.

And that the data is not being shared back and forth. Yeah. You believe that? Like, knowing what you know about the Chinese government, do you believe that? Chances that's actually true. Definitely not. However, I feel like I should at least say that they do claim that. God, you know, it's such a hard question because on the one hand, yes, that all makes sense.

And we don't, and the data collection is extreme. Yeah. On the other hand, the data collection is not any more than U.S. companies are doing. And TikTok has come along as basically the only real competition that we've seen in a long time that has potentially forced some better behavior, maybe, by some of these other giants. So I, I'm really torn between my sense of the importance of competition and the sense of what is so far a very undefined harm, right? Like, even the harm is undefined in some ways.

Well, it is undefined. Like, what could, what could China do with this data? Oh, great, great question. So what China could do with this data is they can know the location and they can, could have access to the camera rolls of every person in our government's children. And then they could use that to do corporate or espionage where they could use things that are on a child's phone or a young adult's phone to then blackmail the parents are that young adult. And if you've watched the Americans, the amazing AMC TV show, which goes into

Russian spy techniques, it is incredible. easy to compromise a person. All you have to do is have compromise on the person. And so they could easily get compromise on anybody in their system. And the idea that the CEO here in the United States claims the stuff's on a U.S. server, when things get backed up to some third parties, to some other server, or reports get made, you don't know what's going back to the Chinese government. And the Chinese government

has the keys to the kingdom in these other Chinese company. Why would they make an exception with this one? And then there's also the algorithm. programming our kids. So if they're programming our kids to be, you know, against American ideals or values, who know, or just be distracted and not focused on their career, science, and technology, I know this sounds crazy, but sciops is a big part of, you know, international spying and warfare. And they can basically program our kids. Video programs people. We know that. So how they, you know, program the algorithm, you know, they could take things like, let's say the Russians did, gun ownership, abortion, slavery, reparations, and race in the United States.

The Russians were using those specific topics to create division between Americans. In fact, I think the, correct me if I'm wrong here, the entire protest with those teaky torches, I believe it was that one. Somebody fact-checked me from wrong. But there was a lot of evidence of them creating Facebook groups and sending either side of one of those contentious issues here in America. Right. And they were sending people to it to create and ferment this division in our country,

which then distracts us and makes us look terrible on a global stage. So they can do that just like the Russians. 100%. To be fair, all that happened on Facebook and kind of still is. So, you know, in terms of perpetrating that specific harm, TikTok might be a more targeted weapon or more easily accessible and they have more control over it

but all of that is definitely still happening on Facebook so yeah I mean but they didn't the Chinese don't control Facebook the platform or the algorithm you can be sure that that algorithm you know if the Chinese government wants to have influence on that algorithm they can the US CEO wouldn't even know the US CEO would know

they could have 20 people working there who also have worked for the Chinese military they could be doing all kinds of options. Remember, as you're saying here, Molly, even American companies can get infiltrated. We had people from Saudi Arabia who had infiltrated Twitter. So they were working there

and they were getting information, I think even DMs, and somebody can fact check me on that one as well, but there was that story of they were getting account information back to the kingdom. That's incredibly dangerous, especially if people have anonymous accounts. So to your point, Molly,

if foreign actors can infiltrate Twitter and Facebook and do that effectively, what can they do with the platform they fully control? But back to YouTube and how much money this is making and how big this is, this to me seems like a no-brainer for YouTube to win this race. Because if you're a creator, you're maintaining two accounts, which means you're maintaining two different sets of follow accounts. And, you know, if we have X number of people, we have 200 and 98,000 subscribers here on This Week in startups.

I think All In has over 200 as well. So, you know, you're not starting from zero. So every creator who hasn't started their TikTok account, well, and, you know, there's probably more that haven't really invested in TikTok because they're busy over on YouTube. Well, now they're going to start at YouTube. And where you originate your content creation is super important. Getting people off of TikTok and then getting them to post again to YouTube, that's hard. But getting the people already on YouTube and saying, hey, here's your new feature, is great.

My question is, why don't they have a YouTube shorts dedicated app for just creating and just consuming? There should be a dedicated app just for this. And they should just do shorts and they should make it YouTube shorts. So if you want to waste time and just do that, you can. And then if you want to see the other longer form videos, you click and it opens up YouTube. So now you get two swings at bat.

Where's the shorts app? Do they have one? I don't know, but that is so smart. I mean, that's how you take out TikTok. And then if you're the government, you can ban TikTok without starting a youth riot because that is what would happen now. But if you're like, oh, there's this alternative here and there's this alternative over here and that's fine. Yeah.

Absolutely. I love that idea. It feels like that might be coming or should arrive now that they have shown this success already with sorts because lumping it all in is hard. It's just hard to find. It's hard to find. YouTube's Achilles tendon still is. It's Achilles heel. thanks,

is, which I think the heel, I think the Achilles still is intended. It is intended. That's what it means. Like, nobody ever says

Achilles tendon because heel sounds cooler, but what it really means is you cut that tendon and you can't walk anymore, you're done. Yes. Yes.

As we know all too well. Oh, poor Clay. Oh. But he's back. He had a good game. He's back. He's back. He's back.

He's back. I'm just PTSD. Just PTSD. A lot of PTSD. Yeah. I can't even remember what I was. Oh,

oh, their Achilles heel still is still is like YouTube is still just looks crap. It's like Amazon. Like, why is it such a crappy experience? I think it's because you can navigate around it so easily that changing it is just too high risk.

It's just too high risk. I am surprised none of the larger sites have been able to make a YouTube competitor. It seems to me that it would be possible to build a YouTube competitor. But I'm surprised people haven't. I will say, get the YouTube premium. Do you have YouTube premium for whatever bucks a month

take the ads out yet? So this is really funny because every time my son makes me watch a YouTube video and an ad comes up I'm like, why don't we have YouTube premium? And then I never sign up. It's just a time thing.

It's just a time thing. I think it's YouTube.com slash premium. I hate to do a free ad for them, but I think it's as simple as that. And there's a family plan. So I'm getting the family plan and then, because I'm now, I just got new iPads for the six-year-olds.

And so now I'm going to have everybody on ad-free services because I just don't want them programmed by all these ads. And you kids start coming to you asking for weird stuff. and it's just better to not have them on that consumption train. Slash cream,

I'm opening it over here. Anyway, it is deeply fascinating. It's cool to see this competition, especially since, you know, Instagram, I think Reels has been like,

okay, but people don't like it. What's the revenue story? Is for the olds. Yeah, Reels is, I'm starting to hit more reels, and I find myself swiping through three or four.

So I think the real, and I keep getting upsold. I'm not a, I'm not, verified. I just asked to be verified on Instagram. I've asked like 30 times to be verified on Instagram and they just ignore me. Did you do it through the interface? Yeah. Oh yeah. Yeah. So I just did it through the interface because people keep making crypto accounts. And so they're sliding to people's DMs. Like,

hey, it's JCal. Want to send me a Bitcoin and I'll send you back to? And I'm just like, is anybody who falls for this? Um, but I kind of need one now. If you like delighting customers and your employees with amazing swag, well then swag.com is the place for you. It's the best place to buy, customize, and distribute. custom gifts as well as promotional products. Because swag only carries items that people actually want to keep. They've curated an amazing collection of the best products across categories like tech, apparel, drinkware, office supplies, and more.

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You might just win that piece of swag. I want to give you 10% off your first order. I'm not joking. 10% off. It's going to be big money for you. Swag.com slash twist and use the promo code twist for 10% off. The think that's incredible is the revenue story for Bight. This is new information to me because the ads on bite dance are terrible.

I would never click on any of them. I don't think they provide any value, but apparently I'm wrong. Has anybody in the, in the, we're on the YouTube chat live here with 342 people watching the show live at YouTube.com slash this weekend. If you want to join us every day 10 a.m. Pacific time. Has anybody ever clicked on an ad? I'm just asking the notie gang, people who have notifications turned on, Molly. Has anybody ever clicked on an ad at TikTok? and bought something,

or seen an ad on TikTok and bought that product or used that service. I have never done that. I don't get the sense that the ads were, but apparently, am I correct?

They hit $10 billion in revenue? More than that, I think. Well, Bight Dan's 2021 revenue was $58 billion. That's all of Bight Dan's. That's all of Bight Dan. So that's not just, that's not necessarily broken out by TikTok,

and that's the hard one to see. This chart is revenue over time after hitting $10 billion in revenue. ByDance, it looks like hit that $10 billion in year one of its existence. Year three? Oh, no. No, no, no. Year three, it's at like almost 60. Yeah, that's crazy.

Yeah. And it's revenue. And again, bite dance is made up of a lot of different things. And in fact, in China, it's not even called TikTok. It's like an app by a completely different name. And there is much more of a live stream shopping culture in. You know what this chart is? This chart's an interesting chart.

We should pull it up here to share with the notice. This chart is, once you've hit $10 billion, who knows what year that is, that would take like five years or something. But when you did hit $10 billion, what happened after that? So the slope after $10 billion is what this chart. So year zero here is not the year that Amazon, Apple, Google, and Microsoft started. This is just their growth curve. So you see Microsoft just grew slow and steady.

after they hit 10 billion years, you know, the next five years after hitting 10 billion. So that was probably in the 80s, right, or maybe early 90s. And Google, you see another slope, you know, tripling in five years. Microsoft basically doubling in five years. And then you see Amazon quadrupling or more, Tesla going 6x since hitting 10 billion. So this is the slope after hitting 10 billion. So this is hyperscale, right? Right.

And by dance, the slope is bananas. as of May of this year, so last month, there was a story saying that TikTok is on track to triple its ad revenue this year, surpassing the revenue of Twitter and Snap combined. TikTok only TikTok, not just bite dance. Its ad revenue was going to triple from $3.8 billion in 2021 to $11.6 billion in 2022. 200%. That's nuts.

See, here's the thing. Those numbers don't lie. you can't hit 10 billion if the advertisers are not getting value. Yeah, right? Like, they must be getting some value. It's not a fad. And I think this is where I was wrong about Facebook. I thought Facebook advertising was going to be DOA because who wants to have an ad between like a conversation and photos of people?

And I was right because the ads got so few clicks. The click rate was like a temp of the, or maybe a 50th of the ads getting clicked on Google. So when compared to Google's click-through rate, it was absurdly low. So we all thought in the industry, social media advertising is going to suck. What we didn't realize was, oh, my God, people are spending a lot more time on this social network than they are on a Google search. Google search, you just, you get in and out. The better job Google does, either advertising or organic results, the quicker you leave Google, right? If you're hanging around Google search, it means you didn't find what you want and you're still going through the menu, right?

With social media, you are just spending hours and hours on there. So therefore, even if it has a lower click-through rate, you're going to get a lot more time and you're going to understand the person's psychographics, a fancy way of saying, like what they think about and what they're into, you know, their hobbies, their interests. The targeting is going to be so specific. Yeah. Over time, we underestimated what the algorithm could do in serving your next ad or serving ads to your friend group. So if one person in your friend group, let's say our friend group, Molly, you know, like somebody's talking about, I don't know, podcasting microphones and you

and I are friends and Tom Merritt's in there and Kyris Dahl's in there and Joe Rogan's, you know, in there. And it's just, you know, an orbit of people on a social graph. It starts showing the ads to our friends. Well, we have friends who are in podcasting or in radio and all of a sudden those ads perform better. And it's all because one of us, you know, went to the Facebook page for, you know, this new podcasting microphone. And then it's like, okay, if you went to that page and you spent three minutes on it and you interacted and asked two questions on it, let's try the 100 people you're closest to.

Oh, that worked. Let's try the 100 people each of them are closest to. And all of a sudden, you have the graph of every podcaster in the world. And nobody knows how it happened. It just happened magically through the app. I mean, just think about how revolutionary that was. And we all missed it in the industry. It's terrifying.

Samber got it. Yeah. Oh, yeah. 100%. The value of the social graph specifically. Like, they used to talk about the social graph and it would be like blah, blah, blah, I don't know what you're talking about. And what it really meant is exactly what you just described. Yeah.

That you will start to get ads that feel like they read your mind. Exactly. And this is why people think their phone is being listened to because we might all be at a party. And somebody starts talking about, hey, this new podcasting microphone that, you know, uses USBC. And it's great for travel. and it, whatever, has battery life and you can take it on the road. Well, it sounds like a pretty good microphone.

They should make one. Imagine if you had a podcasting mic that had a battery in it and it was USBC and you could just take it and do field reporting with it. That'd be kind of dope. I want that. I don't want that.

They do have that. A company called Yellow makes it. Really? I got to use it at Marketplace. Yep. And does it record like on a chip right into the microphone as well? Yeah, it's an all-in-in-one

portable microphone records right into the device. I have an even better one. put Wi-Fi in it and put a little camera in it, and then let me use it for a man on the street. Sorry to use a sexist term. What's the other term? That's a fancy Latin term. Vox Populi, Box Pop.

Vox Pop, thank you. For that person on the street, imagine person on the street where we would live stream it. So it had an EVDO, it had a 5G connection in it. Now I could be interviewing people on the street with the microphone and it would be recording it and high fidelity with a camera in it, that would be a great device.

That would be amazing. All right, anyway, I'm sorry, I'm going. But anyway, we would be talking about that, by the way. We would be talking about that. We would be talking about that and then we'd think, and then we'd see ads, and it wouldn't be that we saw ads. It'd be one of us went on our phone and searched for it,

and then everybody else was in the social group, and then we all got the ads in the next 24 hours. Right. So just so you know that's working. Or someone somewhere in the world who was connected to podcasting groups had bought that microphone, and it was like, oh, I know,

I mean, it's actually way worse than it listening. It's like, oh, I noticed that all these people in the same social graph were in the same location because it knows our location. So I see that a bunch of you were just at a party where I can infer that you were probably talking about some podcasting. So let me like pop this ad up immediately because you're all in the mood. Yeah. If you're a startup, you know you have to save where you can. I'm talking about time and money and your bandwidth. That's why we love Coda.

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I kid you not. C-O-D-A. I.O. slash twist for $1,000 off. That is what is happening with YouTube and the TikTok competition. And also, while all of that is happening, Twitch is trying to get in this game in an even more real way. Keep creators on its platform, keeping them from bailing to YouTube. Twitch is expanding its ad incentive program for creators to be exactly in line with the YouTube split. So earlier this year, Twitch, I think, had not even been paying.

paying creators. It was like you can make money with merch or tips or sort of real-time donations. Earlier this year, Twitch started paying a flat, like a cost per mile, just to pay out for one thousand per one thousand ad impressions. And now is the classic term for this in advertising. If folks haven't heard of it, CPM, cost per M being thousand in, uh, was that Roman or so? Oh yeah, not cost per miles or million. Cost per mil. Yeah.

Cost per thousand. So anyway, I was paying a CPM to Twitch streamers. So if you got, you know, a thousand ad impressions, you'd get a certain amount of money. Now they're switching to the split.

The 55% ad revenue split on the ads and then letting more creators join that program and have that opportunity to get paid, which to me shows both growth in creator interest on Twitch, but also Twitch's realization that if they want to stay competitive, you have to pay creators. this is actually one of the big knocks on Instagram and Reels is they really don't have much of a creator

or haven't historically had much of a creator focus so that if you were an Instagram star you were only making money on external deals and merch not an ad split. Yeah. This is a strategic mistake on Amazon's part. If YouTube gives 55%, it costs them nothing to give 60 or 65%.

So why not make it a 10% better deal? Why would you go at the exact split? It costs you nothing to do 60. Or what they could say is we'll give you, this is what I would have done. I would have said in year one, we're going to go at 90% for creators, and then we're going to go down 5% a year, and then we're going to wind up at 70-30. So we really want, for the next couple of years to really incentivize you,

we're going to give you the overwhelming bulk of the revenue. We're just going to cover our costs, and then we're going to go down 5% to what we've it's a sustainable split of 70-30. This is what Facebook should have done. So smart. Or Twitter should have done. Twitter never really opened up their ad, you know, sharing.

They do put ads in front of select people like, you know, CBS or something. Their videos. Those pre-rolls, you've seen them on Twitter? Yeah, do you get? Totally. As a verified user, we don't get as many ads. So I go to my other account at Jason Calacan. It's my full name.

And I check there to see what the ad mix looks like. but I think you get a lot more of those ads. Yeah, no, I think you make an excellent point that there was a chance to actually not just win high profile streamers back, because a lot of them have left. They either left for YouTube or like Ninja went to mixer, which then up and died. Yeah, they gave Ninja like 100 million or 50 million.

It was some crazy deal. And then they shut it down and had to pay them off. Yeah. Yikes. But so all these creators left, so you could have potentially gotten them back. And then according to Surge Dog, one of our noties watching us on YouTube,

he said, I saw a ton of Twitch streamers complain that this would actually lower their earnings because if you have a really, really high CPM payout because you've got tons and tons of viewers, then this will actually... So on the one hand, great, that they're giving more creators, more opportunity to make money. But if it's a pay cut for the creators on the program

and they're already pissed, that's a miss also. Yeah. Come on, Twitch, get in the game. No pun intended. You know, it's hard when you're owned by a big company to actually be aggressive because you have a bunch of middle managers running the place. They all report into somebody. They all have, you know, some TPS report or some North Star metric and they have to get levels of approval. I'm not sure how independent Twitch is, but they set up YouTube to be highly independent.

And Susan Wojekki is, you know, CEO for that reason so that they can make their own decisions. This feels like they're not being aggressive enough in a really aggressive environment. They should be super, super aggressive and they should make the ad deal much more aggressive. But okay, it's nice to see all this activity supporting creators. And it's one of the things just when you think about employment in the world, one of the great things that's happened in America specifically is we keep with this incredible creativity and entrepreneurial spirit we have in America. We keep coming up with new ideas for jobs.

Totally new economies. Yeah, it's like so cool. There's a whole group of people. It's probably now, there's probably a million people in the United States or a half million people whose job is to work on a podcast, right? There are eight or nine people working on this podcast. So there are nine people employed, you know, over the last 12 years. You know, we're going to hit 1,500 episodes soon. I've got to have a party for that, 1,500th party.

Let's do it. Let's do it. So anyway, just think about that. And then you think there's people who can. paid to play video games. And then think there's people who are getting paid to make short, funny videos where they do 30-second dance moves. So dancers, that was known as a terrible job, right? Yeah. Like, for everybody who wanted to get paid to dance, like, okay, you could be on tour with Madonna or you could, you know, I don't know, New York ballet, like, and nobody shows

up. Like, dancers didn't get paid a lot of money. I mean, maybe there are, there's a category of dancers that get paid a lot of money, I understand. But putting that aside, uh, you know, adult dancers. Yeah, you did not. You really, you couldn't just let it go. I'm trying to think about the entire economy. Red flag. Red flag.

Okay. I'm not, don't call HR, Molly. You know what, if you let me. I knew that was coming when the grin started to show. You can totally see it. Well, Molly, here's a tip for you. I call it the nine-year-old test. If you don't specify it, then you pass the nine-year-old test because they're not going to,

You don't have to like put a fine on it. There's all types of dancing, okay? This is Molly. She's like, I said, I'm calling HR. Beep, beep, boop. Hey, it's Jay Gow. I'm like, here comes. Call him.

Nice. Checault brought up strippers on the show. I mean strippers. I'm literally talking about strippers here. But anyway, if you look at dancing, there are more people being paid to dance on YouTube or, you know, other platforms. I guess people don't get paid to dance on TikTok yet, but they probably have other opportunities to monetize.

Yeah, if you're Charlie DeMilleo, you make nothing from TikTok, but you get like... Okay. Yeah. A show. Charlie DeMilio, the highest earning TikTok creator, 2021, according to a report, is raking in approximately 17.5 million. $17 million. And her sister... They're the New Kardashians.

Like, this family, the DeMilio's, is the new Kardashians. Like, they're got, like, shows and there's, like, she's 18. Her sister's in on it. Like, it's a whole... Oh, no. My son showed me Charlie DeMilio years ago And I was like, I feel uncomfortable. And I mean, she's just a dancer.

She's a good dancer. Like, it's not like the thing that you're talking about. Yes. But it's also. These are very provocative dances. Just as a parent, at what age do you allow your kids to have a TikTok, Molly? For people who are in the chat,

what age should a kid be able to publish to TikTok? I mean, most people say get a phone at, I think the age I'm told is 14 or 15. people get their mobile phone. Oh, really? Yeah. Some people get it as young as 12. According to Kappa, the Children's Online Privacy and Protection Act,

13 is the age at which kids are legally allowed to create their own accounts. Before that, they cannot. They can't create their own account. They're not only not technically allowed. And creating account means you can then make content and share it with the world and potentially go viral. Right. So at 13, I let my son create. media accounts that had to be private.

Got it. Okay. That's fair enough. Public accounts. Okay. And then public accounts and posting to them at what age I see in the chat, people are saying 14, 18, iPhone at 7. Oh, that's way too young. Yeah. This is what I'm trying to figure out.

Like, I am, you know, I have three daughters and like all their friends are talking about TikTok or TikTok comes up and, you know, I'm not a square. and I would say in the technology industry, but it just feels like far too young because your frontal lobes we've talked about this

before on the program, Molly, are not fully developed until you're 21, 22, 23. If you publish something on there and it's inappropriate and then it goes viral

and then you become known by it, like this can have serious repercussions. Yeah. I mean, one thing I do appreciate about like my son and his cohort is that they seem to

really, really understand the value of, ephemeral posting. Like, they're into the platform. They do stories. You know, they delete all their Instagrams. They don't have a like corpus of digital life.

Like had, if the internet had existed when I was growing up, career over. Right. Like, and I'm extremely mild, relatively speaking. And they just don't, they seem to sort of innately, they're not trying to build up an archive that future employers will be able to search. They're sort of sharing with their friends. They're doing a lot more in group chat. They're doing a lot with stories and disappearing messages.

And I don't think that it's, they don't show the past, if you will. I mean, my son will post a couple things to Instagram and like delete them all. I'm like, oh, it's just not the same, it's not the same usage pattern. So I sort of feel like applying our version of how we interacted with social. Like, they're growing up with it in a different way and growing into it in a different way that I think is interesting to watch. Not that it can't be damaging. I just think it's very different how they use it. Yeah.

I'm just concerned about young people creating content with the potential of it going viral. And then you become famous at the age of 15 for something. And then I don't know, what trajectory does that put you on in life? Like, it could go either way, right? Like, if it is something super positive, there's a YouTube channel where a kid unboxes. Toys, you know about that one? Oh, yeah. And my kids watch it sometimes.

And it's become fabulously famous. But this kid was very young. And I was like, my kids wanted to do like, hey, can we do unboxing videos? I was like, yeah, sure, we can do an unboxing video. And I was like, we can make one of those and we could just watch it on our iPads. I wasn't going to publish it. Ryan. Toy Review.

Ryan Toy Review. Yeah. And that's been a whole. There have been like really upsetting stories about his parents, hoarding the money. Like, it's a, it's a little bit of a, yeah, there's a lot. Yeah. I guess there's a lot. Maybe this isn't a new thing.

Like there have been child acting laws. Exactly. It's all the same stuff. I mean, it really is all the same stuff. And if you're putting your kid up for clicks because they're, you know, and your pets and all of those things, but it is what I realized covering the creator economy is it's all the same. It's agents.

You know, it's like marketing deals. It's, are you trying to get into Target? And it's a, it's always, it's the same tiny number of people who get really, really famous and make a lot of money as it's always been. It's just a different platform. It's so interesting. I just did a Google search for Ryan's toy reviews, and literally the drop down was like child labor. So I think, yeah, this is interesting.

Yep, it's all evolving, like right before our very eyes. One of the producers had, it looks like just a cursory research online, $29 million for Ryan's story reviews in 2019. So if the kid then winds up with tens of millions of dollars in a trust fund, is that a bad thing? I'm not sure. I guess it's okay. Depends on how screwed up he is, right? I would like to, if just notice and maybe for the producers, I'd like to talk to a child labor lawyer slash a person who does this or maybe an agent

or somebody who's an expert on this. I think it'd be an interesting topic, right? Yeah. Like how do they advise people doing this? Because, again, to my original point, pretty great that we're creating all these jobs. But it's almost like it's too easy. and you could have kids, you know, becoming famous or creating businesses. I don't mind them creating businesses, but I'm concerned about the fame thing.

Like, what does that do to a young child's mind? But it's a different level of fame. It's a global level of fame, right? Yeah. It's not like being on like a TV series level of fame. It's like probably 100x that. And it's the comments and the all the... Oh, the comments.

You know, yeah. I mean, hopefully they're being protected from that, but... Oh, wow. 32.6 million cents. Listen, right now being capital efficient and extending your runway is more important than ever if you're running a startup. And one easy way to cut costs

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For $1,000 off, that's O-D-O-O-O-O-com slash twist. And by the way, congratulations to O-D-O-D-W for announcing a huge new round of fundraising. Well done. It's breaking news. Breaking news, everybody. The Federal Reserve approved the largest interest rate increase since 1994 and signaled it would continue lifting rates this year

at the most rapid pace in decades, as it races to slow the economy and combat inflation as running at a 40-year high. Officials agreed to a 0.75 percentage. We knew that was a possibility. Yeah. Rate rates at the two-day policy meeting that concluded Wednesday,

which will increase the Fed's benchmark federal funds rate to a range between 1.5, 1.75. That's a good thing, right? I think. I guess so? Slow, I guess the goal is to slow spending. This just feels like we're slamming on the brakes. we floored it

just feels really yeah I don't know I'm curious about this right because like there are definitely some people are saying okay this is good it's going to show that the Fed is taking this really seriously immediately after the news you know the Dow is up a little bit

the S&P is down very slightly I think that this is probably what what 1% yeah yeah this is sort of what like markets were saying that they are fine with yeah they expected I also just and they expected it

and they're happy because it doesn't prolong things in their minds. What I don't know is how this also makes housing even less accessible. It isn't going to do anything about monopolies that

control baby formula and tampons. It's not going to do anything about the war. It can't deal with China's COVID policies. Like we had already, even before the pandemic, entered a phase where the fed's tools were somewhat limited. And there was even like a piece that was just like, look, Amazon controls pricing more than the Fed at this point.

Yeah, we probably, I just am like, is this just going to put money out of reach for Americans who are already suffering but not do anything about the underlying things that are causing this disruption? I guess if less people are trying to buy a good or service, the price comes down. So if you get rid of the demand side, so you don't have as many people originating mortgages, you will have less competition for homes. And that's like a really peculiar environment because you have with homes a limited supply. So that's also distorted. But I guess the theory here is we're going to try to get inflation to slow down. And I see it everywhere I'm going now. People are talking about the price of things and they're adjusting their behavior accordingly.

Yeah. It assumes that the price of things is really just controlled by supply and demand, though, right? Like the price of oil and baby formula and apparently tampons is all about, is not like a, it's not a free flowing supply situation. It's like a couple of companies control that and if they screw up their factory or they decide to turn off production or, you know, now you have Biden literally being like, I guess I'll meet with MBS, even though he chops people up and I said I never would, but we need oil. Yeah. Wait a second. It looks like, yeah, NASDAQ is in the green right now. This looks like it hasn't changed the NASDAQ for the day.

The Dow was at a stronger position at the start of the day. It's come down a little bit. Yeah, it's basically flat now. So interesting. Yeah, it's not red. The only thing that's red is crude oil is down 1%. So interesting. It's going to be a lot to work through.

But let's work through the rest of this docket. Let's do it because we still have a burjillion stories, probably more than we're going to be able to get to. phone and let's get the phone yeah i think the crypto stuff everybody got to talk about crypto yeah this is just getting crazy we tried to put off the bad news but we did man here we go uh it's it is a contagion right i mean i think that's what we're seeing now is the word contagion is important because it means when things start to go bad at one company there is some kind of effect to other related companies. And I talked about this, what, three or four months ago with

the layoff contagion? We now see the layoff contagion has absolutely happened. Every company is just making the cuts. Whether they need to or not, they're like, look, everybody else is doing it, we should do it. In fact, I think Brian Armstrong kind of pointed to that. Look, everybody else is doing this. And I was on two board calls yesterday, on both board calls. We were talking about Brian Armstrong's letter. So that is a full-blown contagion. And now there's another contagion happening in crypto. So let's talk about what we saw today.

So let's start with the biggest ones. This is, I mean, talk about contagion. I would even argue that this is just an accelerating collapse at this point. There's a hedge fund calling itself three arrows capital style this 3A. According to an article published this morning from the crypto news site, The Block, 3AC had close to $10 million in crypto aspects. under management at its peak. And it may now,

due to margin calls effectively and calls on money it was holding, may be on the brink of insolvency. We've seen estimates higher and lower than the $10 billion. Three Arrow's capital had raised separate funds for venture investments in Web3 companies, somewhat like A16Z specialized crypto fund.

Its larger holdings, I am sorry to report, included Tara and Luna. which went to zero. I think went to zero, right? Yeah, I think it's insolvent is the last I checked. I know they were trying to resuscitate the corpse, but I think essentially dead. Essentially dead. Ethereum, which is down 50% over the last month.

Avalanche, which is down 57% over the last month. That's a smart contracts layer one platform that's been focused on speed. Pocodot, which is down about 39% over the last month. That's a layer that provides interoperability between different blockchains. the tweets out from 3AC have included things like in the process of figuring out how to repay lenders and other counterparties after it was liquidated by top-tier lending firms in the space. Was that by 3-AC? Sorry, that was not a tweet.

That was an article published this morning from the blog. Okay. So according to the blog, 3-AC is currently in the process of figuring out how to repay lenders and other counterparties after it was liquidated by top-tier lending firms in the space. So they must have had loans against their crypto. They did. Which is what all these folks are doing. This is like such a high risk maneuver to get levered up.

Because when things come down, so you're basically taking it for people who don't understand leverage, sometimes people will give you like twice as much money to invest. And they'll use your Bitcoin or whatever cryptocurrency you own as the collateral. So you have twice as much money to spend so you can buy twice as much Bitcoin. And if Bitcoin comes down at a certain point, they liquidate you because you always. them the money. They liquidate you. Bitcoin goes down because there's more sellers than buyers. And that might be what's happening right now is a bunch of people were levered up and now they're all getting liquidated. And that's why we saw Bitcoin just plummet to 20,000 and change. Yeah. I think that's exactly what happened. Sources, according to the block, declined to share

the names of the firms, the lending firms that liquidated on the record for fear of reprisal. But three people said the liquidation totaled at least $400 million. They added that the firm has maintained limited contact with its counterparties since being liquidated. Wow. Yeah. Yeah. Yeah, there was a long thread from an anonymous crypto crypto account. Hold kryptonite with 20 tweets.

And it's sort of like you never know what's real and what's not. And yet at the same time, people, you know, people in the crypto space are unbelievably informed sounding about basically financial basics. Hold kryptonite claims these lenders are unful. prepared for a collapse of this size, much like Celsius was. They claim lenders will withdraw credit by recalling outstanding loans, forcing even more large liquidation of coins, and that we might see the price of Bitcoin go below 10,000. 10,000 again. Wow. There are a lot of anonymous accounts. There are always a lot of anonymous tweet threads in the crypto world. This one,

and so just in terms of like when we cover something that's anonymous on the program, if this thing has trended, then, you know, I think talking about it with the major caveat of like, this seems informed, but, and it's trending, and everybody's talking about it. But to be clear, who knows, there could be all kinds of agendas here. Like, this could be a competitor to 3AC, you know? Totally. There's all kinds of fun. But if something does rise up to going viral, now it's become a story. So you don't want to cover rumors or anonymous accounts. but you have no choice but to cover them in this new crazy world, I think.

It's not perfect. It's so hard to get information, right? It's all so opaque. And these are private companies who are also doing incredibly complicated financial maneuvering. And so sometimes you look wherever you can. Will Bitcoin go below $10,000? I don't know. Nobody knows.

Nobody knows. It's hard to imagine that. But at the same time, like, as even just this week has gone on, it's getting less and less hard to imagine anything. Yeah. Okay. So, I mean, but straight from the horse's mouth, 3AC co-founder, uh, Z-Soo, uh, he is Z-H-U-S-U if you want to follow him on Twitter.

He just says, we are on the process of communicating with relevant parties and fully committed to working this out. That is super. Yeah. Squirly. Like working what and it's like no details, but I understand like this is unprecedented times. and so this is why regulation exists in financial markets

this is why anonymity does not exist in financial markets this is why there are rules of the road this is why you know different countries have different controls in place and you know we clearly do not have enough controls in place in crypto

we knew that this could happen and here's the sad part you know who's going to get burned It's going to be retail. It's going to be people who, you know, heard about this from their cousins, brothers, sisters, roommate. They heard about a new project. It was going to the moon and, you know, they bet too much. If you were betting, you know, as I always say, you know, if you're betting 1, 2% of your net worth and you can afford to lose it, only bet what you can afford to lose, you'll be fine.

If you start betting, you know, things that are a significant portion of your net worth, you really have to think it through. And you always, of course, need to be diversified. So if your house is 50% of your, you know, if your house and your retirement account are 70% of your net worth and then 30% is in alternative stuff, you own a car that's a classic or something. You know, I think there's some logical, Molly blend of these things. The problem is people were pressured into making these investments. And this is the thing that I complained about and people gave me a hard time about it because I was like, listen, don't be toxic. Don't tell people have fun being poor. don't create 50 accounts and be Bitcoin,

you know, the Bitcoin toxicity movement, all this stuff is just too dark. And, you know. And look, these companies 100% presented themselves with a financial veneer. And a financial veneer makes people think that their money is protected. I mean, I remember having to convince, almost to the point of yelling,

a marketplace producer, that Zell isn't FDIC insured. that there is no protection for Venmo payments, that you can't get your money back if you send it to the wrong person. When something deals with money interaction, there is an expectation of protection because money is serious business. And so if you look at, you know, R slash Celsius, you see a bunch of people being like, yeah, but they're not going to be allowed to just disappear with our coins, right?

They would get sued. or I'm sure there's protection. Isn't the money insured up to some amount? Not in the hedge fund. I don't think nobody will give a hedge fund in crypto insurance, right? Like who's taking that insurance? And this is where the... I mean, I'm just talking about these users.

I'm talking about these retail users who got into this ecosystem believing this stuff is real. I think the veneer of and this, you know, polishing, making it look like a financial product, I think is one of the things that... the regulators are going to come down so hard. It's going to be a massive overcorrection now. Because you've just given the high ground to the regulators.

Crypto should have behaved itself. It should have regulated itself. It should have been cautious. It should have not used these high pressure tactics. People should have spoken up with the laser eye stuff and they have fun being poor. Because if you're pressuring people, like, they're going to miss the boat, like, yeah, you might actually succeed. You're not succeed with me or Molly, but you might succeed with your grandma, your uncle or something because you have some credibility.

And yeah, you 10 extra money or you 100 extra money. If you look at the book I wrote, I'm not putting a plug in here, but I was very, very, very careful to explain to people like, make the smallest, if you choose to do this and you're an accredited investor, make the smallest bets possible on your first 20 investments. If you can put $500 into each startup or $1,000, do that. And in fact, when we run the syndicate or when I had the syndicate on Angelus, we moved it to the syndicate.com, we kept the minimum investment very low. Other people put the minimum investment at 10K, 25K per startup. I said originally it was 1K, then 2K, then 4K.

And the reason we made a 4K is you can only have 250 people in it, you know, per deal. So we needed to have a minimum. But if people ask, like, hey, can I put $1,000 or $2,000 into this? I'm just getting started. We'll actually say, sure. If there's room, we'll let you have one of the slots. And so, God, I'm just so upset that people took advantage of the public. And they just made this entire shadow economy with no rules.

And, you know, now people are going to get burned. And they were d'hs about it. Like, you could say that I can't. But these guys were jerks about it. They were jerks about it. And look, when I, if I, like, come into a space and I see, where all the jerks are, I don't like to go there. And so there is going to be even more Chadenfreude and there's going to be even more crackdown because the arrogance, the abusiveness,

the kind of like Ponzi scheme for toxic men situation, the bullying of it. Like, no one is going to want to help you. Yes. Well, and that's how you're seeing now. The Shoudenfroida, did I pronounce that correct? Yeah, Shodden Freud. Shadden Freud is now coming on hard. And this clip keeps going viral and I've been tweeting about it as well because well I mean it's just micro strategy CEO Michael Saylor oh I'm sorry you're talking about the micro strategies clip I was like talking about the onion article that just popped up who that was a visual oh what's the onion article that was a visual disconnect I just washed wishes several thousand more people have warned him well played onion well played the onion this is from April on B guy these days

but I'll give the onion credit when they hit one That's a great one. Thousands of people warned them. If only a thousand or even a few hundred more friends had told me about the risk of putting my entire savings into Bitcoin, I might not be where I am today, said Branton. I love the onion. So I saw this clip with Michael Saller, and it's him doing an interview with Angelo Robles, who is the CEO of something called Family Office Association. Family offices are rich families. They typically have 100 million in net worth for the family, and they have to manage multi-generations, you know, having access to this money.

And this has been, this has been clipped maybe unfairly to Michael, but it's important people know, Micro Strategy CEO Michael Saylor has like a software company that then he started, he got Bitcoin religion, he started buying Bitcoin from this company Micro Strategy, which had nothing to do with Bitcoin, took out a bunch of loans to buy a ton of Bitcoin and then essentially created a backdoor ETF, right? An exchange-created fund because Micro Strategy's main asset is their Bitcoin holding. So that, I don't know, I don't want to say that's Fugazi, but it certainly was notably strange. And he started buying a lot of Bitcoin.

And, you know, he was one of these people who was super vocal. Now, was he toxic or was he just absurdly enthusiastic? But, you know, I think people are reporting now he's lost a billion dollars because he has some average price in the 30,000, you know, Bitcoin price. And because as a public company, people know a lot of these details. They're down, market strategy, micro strategy is down 70% year to date, 74% over 52 weeks. And I thought we'd present this clip in full. And then we'll do the numbers.

So I want to just play this because I've watched various versions of those clips going around and people are editing it. But I think you have to be very careful when giving financial advice. And we, you know, I talk about financial stuff all the time on this pod about angel investing. I teach a course, angel. I wrote a book about angel investing. I've got 11,000 people in the syndicate. I take it super seriously.

I'm very careful. I'm super careful to say, only bet what you can afford to lose. And if you're an accredited investor, which means you're the top 6% of the country, Molly, I say, go as slow as possible, be as informed as possible, try to be diversified.

And if it was my brother, sister, cousin, a great friend, I would tell them, start at 1% of your, net worth. And if you love it and you're enjoying it, maybe you go to two, you know, after a couple of years and then if you get really good at it, you can raise a fund, but just be, there's no race here, right? You get rich slowly is always my advice. Let's start this clip. Every dollar is not invested in Bitcoin is dilutive to your opportunity. And every dollar

that's not being the S&P is dilutive to your wealth. And so if you really want to maximize your opportunity, you want to move as much of your liquid. would capital as close to Bitcoin or the Bitcoin network as possible because it is this monetary network that's going from a trillion. And presumably it could be worth 100 trillion or more because the sum total of all money in the world is maybe $400 trillion worth of stocks, real estate, bonds and the like. Half of that is looking for a store value. And the other half honestly, truly wants to be invested in stocks or bonds or real estate. We've lost price discovery in the financial universe. So the single most accretive way to use money or time is invest in Bitcoin

because you've got a once in a lifetime, once in 50 years, you know, transformation where all of this $200 trillion of money sitting in analog fiat instruments is being encrypted and converted into a digital instrument, which is thermodynamically superior, right? That's the first observation. Time is money. Convert your money into Bitcoin or something as close to it as you can. And the second of time...

Let's pause there for a second. Mm-hmm. So he keeps saying, convert your money into Bitcoin or something that is as close to possible, right? He's talking about micro strategy, I think, has publicly traded stock. Because at the time, or even to this day, it's easier to buy a publicly traded stock than it is to get a wallet and cold store or whatever and to buy your own Bitcoin, right? So he's promoting buy Bitcoin or something as close to the network as possible.

I think, you know, I can't say for sure, but I think if an attorney in a class action suit was going to watch something, the fact that it keeps saying that, if you could rewind it just maybe five seconds, I don't know if that's possible. and let's just play it one more time and we'll keep commenting. Start your money into Bitcoin or something as close to it as you can and the second of time well any time you're spending analyzing it's like it's like go to Venezuela

analyze every company every piece of real estate every bond index in Venezuela and figure out which ones you want to invest in and the answer Angela is it's all a waste of time right everything you're doing if you're analyzing frequency of a minute a day, a week, a month, that's a waste of time. If I told you, I know how it all ends, right? Once you know how it all ends, the only use of time is, how do I buy more Bitcoin?

But take all your money, buy Bitcoin, then take all your time, figure out how to borrow more money to buy more Bitcoin, then take all your time and figure out what you can sell to buy Bitcoin. And if you absolutely love the thing that you don't want to sell it, go mortgage your house and buy Bitcoin with it. And if you've got a business that you love because your family works for the business, it's in your family for 37 years and you can't bear to sell it, mortgage it, finance it, and convert the proceeds into the hardest money on earth, which is Bitcoin. So what I would say is use all your time to acquire Bitcoin, finance entities and weaker currencies to buy Bitcoin, or educate yourself on why this makes sense if you're not sure. And then educate everybody around you, you know, if you're working. Okay, let's pause. Yeah, let's pause.

Okay. So go ahead, for context, I want to say, the question that was asked here is how do you prioritize your time in a 24-hour? day. And then the answer was, use all your time to buy Bitcoin. Okay. Micro Strategy holds 129,218 Bitcoin. Wow. That's a lot of Bitcoin. In all, the firm has spent $3.97 billion on Bitcoins. 4,800 of those were purchased for an average price of $44,645. They were bought over, you know, various periods. And as of right now, according to the street today, as we're taping this,

Michael Saylor's bet on Bitcoin now presents a loss of at least $1.2 billion. That at least is, you know, that's his publicly traded company. And so if you were an investor in micro strategy, that was the bet that you made. But I want to underscore again that he's talking to a family office association, a bunch of investors. And this is the advice that he's giving right now. Spend all of your time figuring out.

out how to buy more Bitcoin and nothing but. It's classic finding, you know, if you would, if you were to find a Ponzi scheme as finding more people to buy into it. Right. This will be looked at historically. If Bitcoin goes to a million dollars a coin, he'll be looked as profit. And that was what he was thinking. Because you got to remember, in context, when he made these remarks in March of 2021,

Bitcoin was trading, you know, 59, 60,000. And so he was riding a high. bought in, I think as you said, like an average of 44,000, and then he had bought more before that at the lower price. So, you know, if you're in a year, you know, doubling your money, you all of a sudden feel pretty, pretty confident, right? You got in before everybody. Well, how do you continue to keep this Ponzi scheme going if you take the most uncharitable

version of this? Well, you get more people involved. and telling people that the problem with this is he's so enthusiastic, he is in fact very charismatic. This is a multi-decade publicly traded CEO. He did have an SEC enforcement against him previously. Let's put that aside and given the benefit of the doubt here. This is an incredibly sophisticated public market CEO and founder. And he is telling people to mortgage their house and a bunch of family office people,

if they own a family business, which is how they want to have in a family office, like it could be the lumber company, you know, from Canada or the, you know, people own a bunch of cuckoos in Texas or something. And he's telling them to take their existing business,

stop working on it, but all you're talking about to Bitcoin and mortgage that business to buy Bitcoin. You, the audacity to give financial advice, unsolicited financial advice, I might add. So this is financial advice,

When you have a horse in the race, when you directly benefit from the advice you're giving. All the horses. You have all the horses in the race. I don't know what percentage of active Bitcoin he owns, but it's got to be a pretty good percentage, right? Of like, he's got a not insignificant. Yeah, 150,000 out of what is going to be a lifetime total of 21 million Bitcoin. I mean, he's got a lot. He's got a lot.

A lot. If there's 21 million, then 210,000 is 1%. Right. So he's almost 1% of Bitcoin. But the number of Bitcoin's out there, like, there's a, Some of these people say like a third of them are dead and in dead wallet so nobody can ever recover them. So maybe there's, I don't know. And all 21 million have not been minted yet or something.

A couple of million left, yeah. So let's just say there's 15 million, you know, that are actively circulating. You know, he's got 1% of them. Yeah. So he's talking his own book. But the level of advice he's giving is so dramatic. He could have said Bitcoin is brand new. It is high risk.

I've gone all in. Right. I'm convinced for these reasons, should you do this is a question you have to ask yourself and you have to do a ton of research. And you should do that research yourself and come to your own conclusion. And perhaps if I was talking to a friend and they done their research, if they put 1% of their net worth into this and they could afford to lose it, you know, I could understand them making that bet. I've made a much larger bet. But I am a high risk taker and you need to make your own decision. If you see any videos of me on the internet talking about angel investing, I give a disclaimer

like that all the time, every time. But he does something so sinister in this video, which he actually tells you to not do research because it's a waste of time. Yep. You go to Venezuela and you can study all the companies and then place bets and you realize it's a whole waste of time. He's literally saying, do not. do research on the thing that I bought before you, and when you buy it, I benefit.

This to me feels like this video is going to launch when it goes viral, because it's only gone viral amongst us, but this video will go viral when Bitcoin hits 10K or whatever the bottoming out here is. Yeah. And it's going to result in a class size you can lawsuit, lawsuit, because all of a, uh, uh, an ambulance chasing lawyer needs to do is find one person who saw that video and bought Bitcoin at $60,000 to launch that class action suit. And, you know, this is just disastrous. It's disastrous.

And it's, and I'll be honest, it's unnecessary and gross. You don't need to be this toxic with people. Well, this is religion. Right. It feels like, yeah. It's deranged. This is not even, right. This is not advice.

This is no longer financial. I mean, if you look at his Twitter feed, it's clear that, This is really, like, fundamentally religious. I mean, the pinned tweet alone. Bitcoin is a swarm of cyber hornets serving the goddess of wisdom, feeding on the fire of truth, exponentially growing ever smarter, faster and stronger, behind a wall of encrypted energy. Okay.

I don't know what he smoked when he wrote that. Look his profile picture. Pull up the profile picture. Yeah, it's beyond laser eyes. He's now gone full like. Yeah. Listen, I get that it's a bit, but it's a bit with 150,000 Bitcoin bet behind it combined with giving financial advice, right?

So if he said, I believe this, you have to come to your own conclusion. I, this is religion to me. I believe that this is going to change the world forever. I get it. I'm totally fine with that. It's just that when you start giving this kind of detailed financial advice, don't do research, buy some Bitcoin or something close to it. Uh, micro strategy.

He doesn't say it. So he's kind of leaning you're towards it in my interpretation. I could be wrong. Maybe he means something else. But this giving out like cult like vibes. Yeah. And Ponzi scheme like vibes. And that's fine if it's going up.

He looked like a genius when it's going up. And we don't know. The story is not told. It could become a global reserve currency. It could become worth a million dollars a coin. But that doesn't forgive this level of behavior. And, you know, this is something that a regulator, the SEC, class action folks are going to have a field day with in the event of a collapse. And, you know, is this a collapse?

It's a correction for Bitcoin, but it kind of feels like we're teetering on complete collapse here. Yeah, it really does. Drawdowns happen. 90% drawdowns happen. Talk to Peloton shareholders. Yeah. Yep. And I mean, liquidation events are happening in near constant real time at this point.

This feels like, yeah, go ahead. I feel like this person is like, just, God, how do I say this? I don't want to diagnose somebody from afar. But this feels like he's manic. Right? I know people who have had manic episodes and it feels like a mania when he speaks, right? Like it's so intense and it's so convincing

that a person who wants to be part of something, I could see, you know, five or 10% of people who watch this video actually getting convinced. And it's just when you start having any level of notoriety or power, you've got to be careful. Just got to be careful with this stuff. And this feels like he's directing people

to make a bet that benefits him to not do research, all this stuff put together. Yeah, I mean, I think leaving, it's hard to leave aside the, it's hard to leave aside the fact that if you are predisposed to kind of this cult-like thinking

for whatever reason, that this is exactly the thing that's going to draw you in, especially, and this is important to point out, that at the time that he was talking, Bitcoin was at $60,000. That had gone from... It was racing. literally zero did not exist to an asset in which a single digital coin was worth $60,000.

So like there had not been a historical reason to think that it was going to do anything but that. And I do think that when you look at, even when you look at Jack Dorsey and the look on his face when he talks about decentralization, right? Like there is a Venn diagram of wanting to believe in a whole new thing and the power of invention and innovation and this, you know, arrival of this potentially earth-shattering technology like that draw that I think draws you and it makes you lose your mind. It's just like it becomes dangerous when you're leading a public company in that direction, when you become the false profit for, you know, these family offices that controls, what is it, $6 trillion globally. Yeah. I mean, knows how many of them are there.

It gets real. Family offices are, he's going to a family office conference. These are people who place $10 million bets, $100 million bets. These are people who place those bets. These are the people who will put money into a venture fund. Like Archegos is that, you know, when Argegos collapsed, we saw the size of the family office industry, which is largely unregulated. And they're bringing in like David Koresh to tell them to put everything in a Bitcoin.

It's a little scary. Yeah. It's intense. I wouldn't call it manic if it if there was some consideration here or some disclaimers. Right. But he is nothing. There's not only there's nothing, he is egging people on to mortgage their homes and mortgage their businesses.

You know? And listen, I get it. Like, it's fun to buy NFTs and all this stuff. But like, you just got to use some common sense here. And I am a big fan of people. being able to do what they want with their money. I think the accreditation law should be changed. They're in the process of being changed.

I've been very public about this. You should have a test. And if there was a test that you took that was, you know, 75 questions and, you know, they had to do with diversification and Ponzi schemes and, you know, what bonds are and what, you know, equities were, how equities were. And you just had to take a test and maybe it was, you know, twice as hard as a driver's license, you know, something in that range. Maybe what a gun test should be,

something where you really have to show that you read the book, like a scuba diving test, right? Are you Patty certified, Molly? No. Okay. So I did Patty certification. You got to read a book. You got to do like three or four open water dives because you could die.

Because you're underwater. You know, this could be, the risk of ruin is here for family. So why not let people take a test, get a financial driver's license or like a Patty certification to be a diver? And then when somebody comes out like Michael Saylor does here and is egging people on to make a bet on an untested, unregulated, distributed fad like Bitcoin, that could turn out to be something very real in a great investment. You at least have some backstop, right? I mean, you should just, oh, the basics never change.

And that's, I also think I don't blame the retail investors who got sucked into this and now are astonished, right? who watched these videos and were like, these are the smartest people in the world who control tons and tons of wealth. Why would I not believe them implicitly? Because it is very hard to hold on to fundamentals in, you know, a hurricane, which is what this was.

Yeah. And who knows? Bitcoin could recover. It could go to $100,000, and he'll look like a genius. And this video clip will look like, oh, my God, we didn't get it. Yeah. I freely admit, you know,

Bitcoin could go to a million dollars. I own Bitcoin. Definitely. I'm, I'm holding a little. Bitcoin. I do think that it's a real technology, but, man, this is just so it got, gross.

It turned in, at any time anything turns into a cult, be wary. Yeah. Be wary. And people talk their books, you know, like, I'm always very careful. I'm like, listen, I still believe in Uber. I still believe in Robin Hood. I still own the shares. I tell people. And if I were to liquidate my positions, I would tell you, right? So when I say,

hey, listen, I think Uber's undervalue. I think Robin Hood's going to be a great company. I'm holding for 10 years. I tell people that. And I say, you can look at my replies. People like, oh, what about Robin Hood? I'm like, I plan on holding Robin Hood for a decade. I'm not going to bow on a company, I think, is incredible. And just because, you know, they have some things to work out or whatever, they didn't get to 20 million users by accident.

I still believe in the company. I still believe in management. I still holding the shares. Haven't sold a share there. I did liquid a part of my Uber position a while ago with Mesa early on. I am keeping the rest of my position because I believe in the company. But I'm not telling you to buy it. Or mortgage your home for it?

Or more, I mean, come on. And if I did tell, listen, if somebody asked me like, do I think Uber's undervalued? I say, yes, I think Uber's undervalued. Do I think it's going to be worth 10 times as much? Yes, that's why I'm holding it. You should do your own research. You should take an Uber. You should use the product or service.

You should watch interviews. Do your research. And he's telling people don't do research. Yeah. That's the part that makes me super pissed off about Michael Seller. Yeah. Because I told people to not do research into Morgan their homes. So anyway, it's important.

You all see that. The Celsius Network withdrawals are still paused. These are the people who are giving some huge amount of interest on crypto deposit. So you give them your crypto. They give you 18% or something crazy like that. We could never figure out who was paying the 18%. The company had 1.7 million users before it paused withdrawals. Who knows what's going to happen with them?

$12 billion in assets. Managing almost $12 billion in assets and no one knows what's going to going to happen. They are apparently seeking, uh, talking to bankruptcy lawyers. Was I think the last I saw trying to figure out how to restructure. Yeah. Um, we're taking on a strategic investment.

Who's making that bet? Right. So they, this is according to the Wall Street Journal as of today, has hired restructuring attorneys from law firm Aiken, Gumpstrasse, Howard, and Feld, LLP to advise on possible solutions for its mounting financial problems, according to people familiar with the matter. Yeah. Crazy. Massive, massive.

But listen, this could all end up being moot. Yeah. Because the aliens are here. Did you see this story today? I saw this story last night. And I was, you know, you know when you're going to bed and you're trying to get off the doom scrolling? Yeah. And then the simulation.

Because we're in a simulation. I'm convinced now. Oh, 100%. It's just obviously a simulation. 100%. Because right as I'm ready to go to bed. I got a massage yesterday. My wife forced me to get a massage because she's thought of it.

I was under a little stress. And so I was like, okay, I'll get the massage. And it was lovely. And I'm not even into that. And then I'm like, on the bed, I'm like, just, I was watching that show on HBO, Hacks. I'm enjoying the show HACs. Oh, yeah, that shows funny.

Yeah. So I'm on season three of Hax. It's just lovely, these two comedians and one's older, one's younger. It's just great. It's really under, I think it's underrated. Rated. Underrated show, Hacks, season three. I highly recommend it.

So I get through two or three episodes with that. I got Obi-1 tonight. I'm about to fall asleep. And then I see China finds aliens. And I'm like, really? Simulation? We're done here. Can I get any bed?

Can I get any sleep? And you know what? I refuse to double click on it. Then I get to our chat in the morning. I see the producers. It's in Bloomberg. Because I started on some Fugazi website. It's in USA Today.

It's ever my kid. Of course, came running upstairs. He was like, now we have aliens like we're doomed. So this is the only reason this is in the lineup. Make me smart. Exactly. There are two reasons this is in the lineup. Because one, if it turns out to be true, we do not want to be the show that walk by it.

Okay. Like, we're not buying it. But two, really interesting technology story. Okay, so the story is China's science ministry said that its giant telescope and China apparently has the world's largest radio telescope, which I did not know, said its giant telescope may have found signals from alien civilizations. The signals were identified this year by its 500 meter aperture spherical radio telescope known as sky eye. The narrow band electromagnetic signals detected by Sky Eye are different from ones previously captured. And this team is still investigating them. According to Bloomberg, though, the report then had been posted on the website of the Science and Technology Daily,

the official newspaper of China's Science and Ministry, technology ministry. And then it was removed. Kind of like, COVID. Yeah. I mean, I was talking about this earlier. I'm just not walking by it. Like, I just want to put this, plant this steak right here. it'd be like, yeah, we saw it.

So that when it turns out to be aliens on the way, I think this is worth investing in. I'll be totally honest. Like, I know we got a lot of problems on Earth, but we're not going to be here much longer, Molly. You and I are on the back, you know, nine. We're on the down swing here. I have no illusions about the fact that I got between one.

We look great. We're looking great. But we're healthy, all that stuff. But we have between one day. and, you know, whatever, 30, 40 years, 50 years, you know, it could be good. But this satellite, this China, you know, dish here looks pretty good. I think we need to build one that's 10 times bigger. Because before I die, I sincerely want to know where the aliens are.

And the clock is ticking. So I know it's a waste of money and we got like a lot of other things to work on. But I think we should be going all out to find, all in on finding more. of these aliens. I want to find out. And even if we never know, the fact that we know there's somebody sending a signal, to me, that would be lovely. I think it would change humanity's view of the world, right?

Give us some purpose. Like, okay, there are other alien life forms out there. We can meet them, you know, and there could be a lot of upside in that. Or they could fry us and eat us. Yeah, I'm 100% on the Stephen Hawking train here. And I love, love, love that trilogy, the dark, the three body. problem trilogy by Sheeson-Loo. And the book, my son and I were talking about this actually when I took him to work this morning, the idea of the dark forest.

Like if you're in a dark forest and you don't know what's out there, but you assume there are probably things that are out there that can kill you, are you going to light a fire and be like, I'm right here. Yeah. Or are you going to shut the hell up? Yes. And try not to die. Yeah. And Stephen Hawking was of the opinion that we need to shut the hell up and try not to die. because if there are aliens marauding

out there in the world, it's most likely universe, it's most likely because they're looking for resources. Yeah. That's what we did as a species. Sure, it makes sense. When we expanded across the globe, it was usually because we're like,

oh, we need this and we need that and we'll kill whatever is there and take it. It's not, shut the hell on. But if you be a here's your hold on, I have a counter argument to that. I don't know the whole body of science out there and I only got into the second three body problem audiobooks.

I got to pick it back up. But here's the thing. If you are that scientifically advanced to get across the universe, it would follow that you would have the ability to create resources because it's going to take a heck of a lot of resources to get across the universe. And we're already at the point of not being resource constrained on this planet. Like fusion, you know, renewables, water, like desalinization. I mean, we are talking about mining the moon because we need some metals and minerals. We're having a hard time finding here. Yeah, it feels opportunistic.

It doesn't feel like, but I mean, if we could get to another planet like ours, another Goldilocks planet. Yeah. The amount of resources it takes to get there by definition would mean that we have unlimited resources, I think. So I'm going to go with the, we're good. You're optimistic guy. I like that. I'm optimistic. We're good.

Yes. And if I'm not, like, you know, it is what it is. Okay. If we're not, then go in the first wave. All right. So we'll wrap on that. There's either good news or the Chinese are lying again or it's the end of days. Or like both maybe?

Or the simulation is just, you know, whatever 12-year-old girl is like running this simulation. She's not tired right now. She's not tired. She's having the time of her life. She has a lot more ideas. She's got a lot of ideas to. She's like, let's see if a reality star could run everything. Oh, how about a hundred-year pandemic?

Let's crash the market. let's make an imaginary currency. It's just like, please stop. I liked it better when it didn't move. She's, I mean, she's literally going to be like,

what if Russia and China both started a war in the same year? Like, this Taiwan stuff, like, oh, anyway, stay focused, everybody and we'll be here for you

every day at 10 a.m. YouTube.com slash this weekend. And, we'll see you tomorrow. We've got a lot of fun things going on. We got a lot of new guests coming on. We're going to be booking, having some interesting interviews

coming up on this weekend. startup soon. We do. And then, of course, don't forget about this Angel University. Ah, yes, Angel University is happening.

Go to Angel. Dot University. It's happening in two weeks. So if you want to learn how to Angel invest in startups and do it with like a real good methodology and not mortgage your house.

Yeah. I'm going to be there. I'm going to be there. Oh, you're going to go. Great. Awesome. Absolutely. Yeah, maybe you can help us with the Q&A at the end. Angel.

Dot University. All proceeds. to go to charity. On the angel. That university site, we have a list of all the charities we've given money to. And I think it's over 150 or 175,000 we've donated.

So all the proceeds, we don't make any profit from this. We just pour the profit into donations, but we do like people to pay for a ticket so that they don't burn the seat at the Zoom call. So it's virtual as well. We'll probably do them in person at some point.

And as we wrap here, we had the breaking news of the 0.75 interest rate. Yeah. Yeah, happened today. Markets were all over the place as we were talking, but the Fed is being super aggressive.

And then there's an updated estimate Wednesday from the Atlanta Fed. Okay. On whether we are or are not in a recession. Of recession, of course, being defined as two straight quarters of negative growth right now. The Atlanta Fed is saying Q2 is flat, not negative. Oh, so we may have just dodged a bullet, maybe technically. And they usually use, you know, I hear some people saying a recession also has to be that we don't have jobs or people are losing jobs and there's an employment issue. But I've never heard anybody give a specific definition of that.

Like, you know, unemployment is above X percent or, you know, the number of available jobs is below X percent. So if somebody can inform me about that definition of a recession or that caveat to a recession, please email us, producers at this week and start. I keep hearing people on CNBC talk about unemployment in relation to the definition of a recession but that is

something we knew was a possibility that it could be a flat quarter in terms of GDP so that would actually be good news yeah I'll take it markets are green as we wrap

so we better go goodbye we'll see everybody tomorrow bye bye bye