Unchained - Bits + Bips: Could the LIBRA Scandal End the Memecoin Craze? - Ep. 786

Episode Date: February 19, 2025

The $LIBRA token launch was a disaster—insider trading, price manipulation, and yet another memecoin scandal. But does this mean the memecoin era is over? This week, James Seyffart, Joe McCann, Ram Ahluwalia, and Noelle Acheson break down the fallout from the $LIBRA launch, what it means for Solana and the broader market, and whether the crypto community is finally waking up to the risks of insider-driven tokens. They also dig into macro trends impacting crypto—including whether institutions are secretly loading up on bitcoin, the role of DOGE in the broader market, and why some traders are starting to position for a bounce. Plus, what’s next for SOL after weeks of bleeding? Show highlights: 2:45 - How everyone was so surprised by the $LIBRA scandal 10:40 - Why the likes of Hayden Davis are admitting to fraud 12:47 - Why Joe thinks that Solana is not affected by these debacles 15:26 - What Davis should do with the $100M in his power 20:21 - Whether the memecoin cycle is over 25:48 - The irony of people who now want regulations 33:31 - How big institutions have been loading up on bitcoin ETFs 38:20 - Why the U.S. government should modernize its technology 44:39 - Whether DOGE will have a big impact on macro 51:24 - What the Fed will do in the near future 55:29 - Why ETH outperformed this week and why the broader market tanked 1:04:33 - Why Ram believes that Solana will have to get through the “psychological damage” Sponsors: Bitwise Hosts: James Seyffart, Research Analyst at Bloomberg Intelligence Joe McCann, Founder, CEO, and CIO of Asymmetric Ram Ahluwalia, CFA, CEO and Founder of Lumida Noelle Acheson, Author of the “Crypto Is Macro Now” Newsletter  Links Learn more about your ad choices. Visit megaphone.fm/adchoices

The reality of crypto over the last 10 plus years, it's been speed running the lessons of history. So crypto learned what rehypification was. It learned what fractional reserve banking, was it? It learned what securities. It learned what leverage is. And now it's healthy in this post-Genzler area to have a learning like this relatively quickly before you have a larger mishap. Hi, everyone.

Welcome to bits and bips, exploring how crypto and macro collide, one basis point at a time. Today we'll talk about Libra scandal, and for those unfamiliar with it, we'll try to explain what happened and how it unfolded, and we'll discuss what it means for the meme coin cycle for Solana as a blockchain and much more. But first, some quick intros. I'm your host, James Safert, Tradfai Archmaister, Lord of Bloomberg's End, here with Joe McCann, Lord Commander of Asymmetric, and Master of Bonk. Hey guys, I'm finally back. Also, Noel Atchison, High Seer, and Christopher Keeper of the Crypto is Macro Now newsletter.

Hello, everyone. And Rob Alawli, Maseer of Wealth, leader of Lumida. He should be joining us a little late, but we're going to jump in here. So we're here to discuss the latest stories in the worlds of crypto and macro. Just remember that nothing we say here is investment advice. Please check unchained crypto.com slash bips, bips for more disclosures. Crypto moves fast. It's why Bitwise launched the weekly CIO memo, a jargon-free summary of what's moving

crypto markets written by one of the best in the business, CIO Matt Hogan. Get up to speed in five minutes or less. Check it out at bitwiseinvestments.com slash CIO memo. Carefully consider the extreme risks associated with crypto before investing. All right, guys. So I'll just give a little bit of TLD. And then I guess I'll pass it off to Joe and Noel to really dive in because they've gotten in a little deeper than I have on this stuff.

But on Friday, a new token was launched called Libra. It surged billions of dollars in value, particularly after an endorsement from Argentine's president, Javier Malay. He basically tweeted out on his Twitter handle that it was going to help Argentine companies and things like that. At the center of the controversy is Kelseyor Ventures Hayden Davis, an advisor to the project, who admitted that his team sniped the token launch, a practice often used to manipulate prices. blockchain analysts also link Lieber to previous insider-driven meme coins, including one associate with Melania Trump. Now Malay is facing legal trouble. He has fraud charges.

There's talks of an impeachment on the table. Meanwhile, Davis claims the crash wasn't a scam, but a plan that went wrong. I'll go to you first, Joe. You're a big meme coin kind of guy. I'm just curious. What is your initial reaction to all this stuff going down on Friday and this weekend? Wow. That's my initial reaction.

I mean, I actually didn't really participate. I didn't. I think I actually bought a little bit and totally lost money on it. Frankly, because a friend of mine had mentioned to me, I was like, oh, this looks like it's interesting. And I was like, wait a second, this is a rug. So there's something wrong here. But that is a true trench warrior story. Anybody that's been in the trenches knows what that's like.

That happens all the time. Do you still have your holding? No, no, no. I took the loss on it. I was like, this just looks crazy. So I took the loss on it. I know better than to hold on to a bag that appears to be riddled with issues. After I kind of saw that it was a rug of sorts, I kind of stopped paying attention to it because I've been in crypto a long time and rugs happen all the time.

Doesn't mean it's okay. It's just that like you can spend your energy elsewhere or you can constantly try to be pursued this type of stuff. And for me, it just wasn't a good use of my time. And since then, what it's unfolded is this has been absolutely crazy. I don't have the full details. I don't know, Noel, if you want to go into it. But I have seen videos of Hayden, or Hayden, right? That's his name.

Yep. What if I am not a lawyer, but it appears that he is admitting that he, that he conducted criminal activity, which is just crazy to me. But I never understood the point of trying to go on the internet and plead your case. It just seems like a terrible thing. because, number one, let's be super clear, the engagement models for things like Twitter are controversy and outrage, and you can never appease the internet. So if someone thinks that you are doing something nefarious, it doesn't matter what you say. You will never be viewed as, you know, right in your approach.

And so that was shocking to me to see that. It appears that he's also, or this firm is also associated with the Maloney. Lonnie a token that was also snipes. So I don't know, it was mind-blowing. The sad part, I think, and I hope this isn't come to fruition, is that, you know, the president of Argentina has radically changed and turned around their economy, at least from what I've gathered. And his political opponents are now using this as a means to potentially have him impeached or thrown in jail or fraud charges. And I think that that would be a huge loss for Argentinians. Totally agree. And he really should be taking a victory lap roundabout now,

the data that's coming out of Argentina, not just GDP growth, but inflation back down to where it does. It was just a few years ago. I mean, now's the time to not do something really stupid like that. And that raises the bigger question, Joe, you were right there as to why he fell for this. He tweeted out that it was an exciting project, it was going to help Argentine businesses. And then that was immediately reaffirmed by KIP Protocol, who were on the tokens website as the developers. And they did clarify that he's not directly involved, but we're delighted for the endorsement. By the way, we are definitely here to help Argentine businesses. And it shot up to $4 billion. Then the insiders started doing their thing. The sniper started distributing and it

crashed way back down again. Millie deleted his tweet, his original tweet, posted another one saying, I wasn't involved with that. I didn't realize that I was doing, which, of course, didn't exactly help the price movement at all. And then we did have the PR spec. of the those involved, especially Hayden, I forget his last name, Hayden actually giving a video talk, explaining what he was doing, then issuing a release in which he also sort of confessed a few crimes in the priorities. And then, of course, the interview that he gave, I think it was earlier today with Coffi Zilla, it might have been yesterday, which is we're recording on Monday. That was just spectacular. It's a reminder of how we can talk about how this sector is maturing,

how crypto is maturing, but there are pockets that are definitely far from mature. Ram, hi, you've joined us. What's going on? How's everyone doing? We were just, we just gave a rundown on our initial reactions to the Libra token stuff from this weekend. And it's pretty good that you're not here because you could, you might say something that exactly other people said.

So I'm curious what your initial reaction was it, what to Libra was. I was surprised so many people participated in it after the launch. And the reason why is, you know, The Trump meme coin was like the Immaculate Conception. It's the president on inauguration day, well, first inauguration event, the day, Gensler is out the door. And that pump lasted from Friday night to Sunday 4 p.m. So any subsequent launch will have to have a half-life within that time frame. It cannot last nearly that long.

And so I was surprised people just went into this. And, you know, I think that's the other side of this. Like, I think the meme coin pump game is over. Or if you want to do it, your half-life is like two hours. It's very short. Yeah, I think, I think honestly one of the reasons, I mean, this is just my pure speculation here. But meme coin trench warfare has been really exhausted lately. A lot of meme coins have just gotten absolutely decimated in the low-val environment that we've been in for the past few weeks.

And I think people were looking for that, you know, 10, 20, 100 X thing and everybody seemed to have piled into this thing. I think, I don't know, maybe it was Kobe had a thread today or something about, you know, people are just, you know, unlike the previous kind of defy cycle or the previous bull market cycle where people were just trying to like farm yield and figure out ways of making as much money as possible, people are just like, they're just not. interested, at least this is his claim, and I'm paraphrasing, that they're not interested in really learning about decentralized finance or learning about crypto and it's utility and power and it's that. They're just trying to get rich. And I don't disagree with them. I think, you know, I've been probably on record the most saying that like, yeah, you should treat this kind of like lottery tickets or entertainment or sports betting, something to that effect. And I don't have a moral issue with people choosing how they spend their money. But when everybody is approaching it

from the same lens, like you're going to end up with these insane moves like what happened with this token. And then the insiders are going to do what they end up doing. And I mean, it's just, it's, it's textbook. And the pitchforks have come out, which makes sense. Like, if you study Renee Gerard, there's always a scapegoat in these types of situations. The irony to me is people blaming Solana. Like, I couldn't, I just couldn't make sense of that. I was like, guys, it's permissionless network. It's like, I think somebody was saying, is Google responsible for the Nigerian print scam emails that I keep getting in my Gmail inbox, right? Like, it's like the same sort of like, and that's even a controlled sort of centralized service, whereas like a permissionless service,

you know, you don't have any control over this. And the power of a permissionless network, you know, it goes both directions. You'll see the variance increase around, you know, positive and negative utility and it's going to attract these types of actors, it's not going to slow down, I don't think. I don't think it's specific to Salana. I just think it's specific to the concept of a permissionless network and what people can do on it. So your one thing thread to pull on is whether this is a symptom of or a cause of the malaise that we detect in the crypto mood these days. We've talked on this show before about how everyone's so pessimistic and we don't really see why because the fundamentals are good. And many people who said it's because it's mean coin,

It's froth. There's nothing really fundamental going on. But which is the cause and which is the effect? Yeah, I would also say, like, there's a difference between it happening on there. I think there's, like, Salon, it definitely has been leaning into it, but it's no different from anybody leaning into, like, you know, the ICO boom or NFTs on Ethereum. Like, I kind of view a lot of this. It's like in this my same, it's like, that's the way I see it, I guess. And the other thing I I would say is, Joe, you said, like, people are going out on the internet right now. And it's not just Hayden Davis. There's other things out there. about like some of these pump and dump schemes out there, just blatantly talking about stuff that like, as far, I'm, again, none of us on here are lawyers, but like, that's what they're talking about, I believe could be considered fraud, manipulation, whatever words you want to use. It reminds me of the, we were talking about before, reminds me of the Avi Eisenberg thing with Mango markets. He was out there publicly explaining what he did. He went on Laura Shins unchained and was like, this is what I did. I exploit the code. I did all this. And he's like, I can't get in trouble for it because it's just the code. And like, sure enough, he got in a lot of trouble for it.

fraud, a bunch of other types of fraud. I think there's people here that just don't understand exactly what they're doing. Like Hayden specifically talked about like ensuring sufficient volume and like volume churning is illegal. Like if you talk to certain different people, there are certain things you can do that are like clear as day not allowed to happen. I think people just don't realize what they're doing is not allowed, I guess. Well, like also this may be a symptom and I'm not by any means justifying this type of behavior.

but there's no clear regulatory framework to understand what is and is not allowed. And frankly, if someone doesn't have a securities background or a Trotify background, again, I'm not saying what they did was okay. But maybe part of the reason that they're coming out and saying something so obviously crime-ridden is because they genuinely don't know. And is that a symptom of the fact that there isn't clear regulatory guidelines around this type of stuff? I would say, look, fraud is fraud. always was still is and the new SEC chair has said they won't pursue enforcement actions except against fraud and a fraud is willful deception or misrepresentation and that's the law

so you know question for you Joe so look I agree look you can't blame Solana that's the permissionless network but this does remind me of 2017 ICO craze we had a lot of these kind of one-off pops and a lot of people got burned and there was a knock on injury to Ethereum token itself, the coin itself. Do you think that we're going to have a similar effect on Solana, just the sentiment around Solana? Because, you know, one of the drivers to be on Solana is to participate in these opportunities. We had high-quality opportunities last year, as you know, from Bonk to Gito. And now here we are. Is this an ETH-ICO replay for Salana? I mean, obviously, I'm biased, right?

But if we try to zoom out a little bit and go, okay, so if you look at the sole Eath chart today as we're recording this, you know, it's up 7% or something like that. It's also a U.S. holiday spot volumes are at like the lowest they've been in a long time. At the money, VAL and Bitcoin is at like the 16th percentile. Like we're talking about a very benign environment to begin with. And you just gave crypto Twitter the utmost amount of firepower to dunk on anything. because everybody's upset. I still fundamentally believe that the structural challenges that face the Ethereum ecosystem

are still prevalent today, irrespective of, you know, hey, Salana enables this thing. Well, it's like, remember, base was trying to get meme coins on there too, right? So like, oh, what if this would have happened on base? Or what happens when it does happen on base, right? Because it's inevitable going to happen across anywhere where you could do meme coins of this size and scale. I just look fundamentally at where Salana sits today. And the number of, I would say, consumer-based applications that are getting built, teams that are actually building stuff because the infrastructure has been tested by things like

meanloins suggests that the fundamentals for Salon are still incredibly strong. Now, I'll defer to my ETFs on the Salana ETCs that are likely going to get approved. But, you know, the institutional adoption also tends to feel like there's going to be to be an additional tailwind behind there. We're in a really crab sideways market right now. So, you know, I think it's easy to pick on probably something like Solana and people try to get short into it. But I'm looking at it going like fundamentally, the technology behind this chain is just enabling all kinds of experimentation and innovation that simply isn't possible, at least currently, on a lot of these other chains. So also I want, so before we even move on from

the Lieber stuff, Laura had the opportunity to, interviewed Dio Ciceres, which like anyone involved in crypto or who has read any books about the early days of Bitcoin, Wences Cesaris is one of the very early guys from Argentina who got involved. This is his son. And he talked about this whole, and I'll just give you some of the cliff notes if you haven't listened to Laura's interview. But one, he said he had heard that Hayden had been telling others that he could get official partnerships with the government and heavily implied like other things were going on, potential bribery, things like that. He also pointed out, obviously, which should be common for everyone to know, is that most people who got wrecked

appear to be crypto people, not everyday Argentines. That said, the Argentinian stock market is down five point something percent right now. And we just talked about at the beginning, the fact that now there's talk of impeachment and fraud charges against Malay, which as Joe kind of hinted, I really hope that's not the case. And this seems like completely overdone and just political maneuvering. But he also kind of talked about the fact that Hayden was taking a lot of liquidity out the liquidity pool over 100 million, and he was managing the pool functioning, taking $100 million, providing one-sided liquidity, which is literally just a sell order. So he thinks it exhausted all.

The buy pressure left very liquidity and, like, things obviously just collapse and unraveled, like rather quickly. We're talking 90 plus percent down. So I guess, like, do you guys see any longer term impacts of this? And then supposedly there's like $100 million out there between Hayden and Kelsier? like what do you think they should do with that money? I have virtually no thoughts on this. It's kind of way out there, but I'll go to Noel thought.

Do you have any thoughts on what I just said that are out of the box? Obviously, Hayden should be redistributing the money to those that were affected, but legally it's not clear he can. If indeed the lawsuits are about to start flying and it looks like they probably will, then everything sort of has to stop until things get unraveled through the proper channels, whatever they may be. It's not clear what they are going to be because it's not clear where this falls. Does this even fall in U.S. jurisdiction? Is this something that the SEC can get involved in? But I'll leave a bigger question is what even is this thing? It's not a meme coin because it did

claim to have a purpose and meme coins. They don't have a purpose. That's part of the beauty of it. But because this is being called a meme coin in all of the mainstream media and on crypto-tritter as well, because it did behave like one, does this mean that mean coin, the mean coin craze is finally over? In other words, is there silver lining here? Yeah, and I'll just add that I think, James, the thing that you mentioned that stood out to me is like, what should he do with that money? Should he return it and make people whole? This gets back to my original point of like, you literally cannot appease the internet.

It is impossible. He could literally make every single person whole and give them interest on top. of it and the internet still would not be happy. And frankly, like, again, I'm not a lawyer, but to Noel's point, with these lawsuits coming, you probably want to lock that stuff down so that you have, you know, at least that in your leverage available to you for a Mia culpable of sorts to potentially like negotiate your way to a lower sentence, assuming this is criminal activity. What makes it complicated is that if you give back the proceeds from the sales, you need to attach it to a release of liability as well. That's what here's the

lawyers would be saying to him right now and how the hell do you do that on a permissionless chain. So if you do distribute the proceeds and you don't have release of liability, you're going to get sued anyway. And then you can't pay for the legal bills. So they're in a pile of issues. It's not even clear he actually has a lawyer because your lawyer would not let you behave, like he's behave, does that? Another thing we do have to be. It's like, yeah, it's like it's literally a way. I don't need a lawyer. I've done nothing wrong.

You remember a better guy's a lawyer, sorry. That's the lawyer he has, right? The better call it's all securities exchange lawyer, right? And something to appreciate is just how fast the forensics was unraveled here. I mean, over the space of a weekend, less than 48 hours, we knew what had happened. And now scams happen in traditional world all the time, and most of them never even go detected, let alone unraveled. This was detected and unwravelled. This was detected and unraveled fast. Yeah, I mean, that's actually a really great point, Noelle. I mean, on the one hand, there's a level of transparency because it's a public blockchain that just doesn't exist in, you know, other industries when fraud and scams occur. But then also you've got the

hive mind of the internet behind it. And a lot of people upset. And also the folks that figured out the fastest claim the engagement clout on places like Twitter to gain additional following, et cetera, it becomes this virtuous feedback loop. Right. And I think, Noel, the earlier question you asked is this meme coin cycle over? Look, I think the answer is yes. This reminds me of 2021, 2021 spacks, right? Like, when people get burned on new issues, then they stop buying and they retract and

they withdraw. So I think we've seen that. And there's this spicy post from Travis Kling, where you can't. goes through all these celebrities. Caitlin Jenner, Iggy. Joe, you were part of that. That was the successful launch. In the early days, early days in crypto is like nine months ago.

So two generations ago. Andrew Tate, Waka, Flaka, Trump, Haktua, now Javier. So it seems to me that this cycle, the meme coin cycle is done. Meaning specifically the launch of new meme coins where you can make a lot of money a short period of time, maybe there's an occasional one-off, but I don't think it's a reliable strategy to sit and snipe on these tokens. Joe, what's your take? I mean, I respectfully disagree. So look, one, prior to this token launch that was botched for myriad reasons, you just had an enormous number of tokens being launched every single day. And as a, as a

bunch of new liquidity chase, the Trump meme coin, you know, since then, it kind of marked the top for, I would say, alts in general. In my latest market update, I actually pointed this out that in the month of January, the others index, if you guys are familiar with this, it's basically all the tokens, not in the top 10 by market cap, was actually negative for the months of January. And you can pinpoint when it happened the day or the night, I should say, that Trump launched is meme coin. And why was that the case? It's because a ton of liquidity was basically pulled out of everything else to chase Trump, right, and run that thing up to whatever it ended up going to, right? I don't think that the speculative nature of people is going to slow down because of this.

I think, you know, from the kind of myopic view that we have on crypto Twitter and these trench warriors that are, you know, trying to find the next 100x coin on pump. Fun, like, I don't know. I just don't I just don't, I think it's, maybe it's a problem. Maybe it's entertainment. Maybe, you know, people are chasing that next, you know, big win, which is very consistent with what happens in the stock market, that happens with sports gambling, that happens with casinos and casino gaming. And I just don't think that that part of human nature is going to stop.

What I would think from maybe like a more refined perspective is that even though the Mulei token had this catastrophic, you know, event, I think to James's point, like, the majority of them are crypto-native people. And so what are the things that historically have driven Dogecoin to new highs, pepe to new highs, bonk to new highs, it's retail. And it's rarely the crypto-natives that are actually say, think, you know, buying some particular meme coin. So I would actually argue that once the market starts to bounce, maybe we start to approach new all-time highs in Bitcoin. some additional liquidity, starting to enter the market through various means, you will likely see retail chase meme coins in some capacity. Are they chasing the latest thing on Pump.

That fund? Probably not. Are they chasing the thing that's on Coinbase? Probably. Yeah, I'll jump in real quick and say like, I think these predatory meme coin launches, like this, this frenzy that we've seen over the last few months or whatever you want to call it, I think, I think we've passed the peak. I mean, I'll, you know, I could be wrong. I tend to fall in Rams camp there. But I'm with Joe in the sense that like, this isn't going to go away. The other reason why I think we completely pass the peak of this is part of the drive towards

meme coins and these type of tokens that people were launching was that like you literally, specifically in the U.S. and many other cases, you couldn't do anything else. Like you couldn't launch a utility token because the SEC was saying it's a security. So people were like, all right, we're just going to launch it. these meme coins. So I don't know what percentage of the interest in these meme coins was driven by the fact that you couldn't actually build and launch useful things that were like tokens and stuff on chain because the SEC was saying there was for securities. They wouldn't like no matter what you did, you basically were screwed. So they, the SEC kind of forced things in the way that they forced everything offshore over the last few years of probably help cause what happened with FTX and other things. They've kind of also pushed all this retail capital into meme coins, which has zero utility. It's PVP. And that's what we ended up with. So I think we're going to see a huge drop off and interest in these things. I don't, it's not going away.

I mean, NFTs, for example, they're down 90%. Maybe these things don't go down 90% from like as far as interest and trading volume. But there's still some trading going on in these things. There's still a lot of interest in NFTs. It's just a fraction of what it was. I don't know how small that fraction is going to be for meme coins. But I'm, I'm of the camp that I think we've passed the peak interest here. I don't know.

I wouldn't put this on the SEC. Look, with freedom comes responsibility. this is how this is how it works welcome you don't want to credit investor rules this you have you know if you don't have disclosures buyer beware well isn't that funny how you know people have been crying for so long that like we don't have rules and regulations and then like they don't want rules and regulations and now they want rules and regulations because they got screwed it's like you know at the end of the day i mean i had i had this interview the other day where they were like i think it was the financial Times or something, it was like, should investors invest in meme coins? And I'm like, should investors

invest in anything? Right? Like, you need the state to nanny you around what you're investing in. Maybe you shouldn't invest. And is it even, is it investing or is it gambling? I mean, and there's nothing wrong with gambling. Gambling. Gambling is perfect legal. But let's face it, casinos have rules. That's right. But Noel, I mean, look, it was a guy in a blue suit on CNBC that's Gold bullion and I believe him and trust it. I think it's a bigger question. It's really around the role of government. And you're right.

You know, on the one hand, people are saying, we need clarity. On the other hand, they're saying, hey, get the government out of the way. And then you have, hey, where's the government? And look, I mean, the reality of crypto over the last 10 plus years, it's been speed running the lessons of history. Right. So crypto learned what rehypification was. It learned what fractional reserve banking was it? It learned what security.

It learned what leverage. It learned what leverage is. And now it's healthy in this post-Gensler area to have a learning like this relatively quickly before you have a larger mishap. So if there's a silver lining, I think that's it. Yeah. I'll say this real quick. Like I've said this many, many times on here. One, people want regulatory clarity, and there's going to be a lot of people in the space do not like the clarity that they're given.

I think it looks like it's going to be pretty good, but there are things on there that people, particularly the libertarian cipherpunk side of this industry, they're not going to be fans of it. But it is what it is. That's what's probably coming in this country. The other thing I would say is, like you talked about like accredited investor stuff. This goes back to kind of the Libra launch. This whole thing with Dave Portnoy, who is the CEO of Barstall Sports, basically. came out and said he like got all his money refunded like should rich insiders who lose money on these tokens be getting their money back it seems a little more complicated than that because he's basically

like they told him you can't tell him we gave you this tokens and he was like i'm not taking that like i'm going to tell people what happened i'm being honest so like there's a lot of weird things that can happen but like it just shows there's a lot of this weird stuff going in the back end also in the interview we talked about with coffee zilla hayden basically said he had heard again this is complete rumor, but this was in the interview, that people were offered the ability to buy in the Trump token beforehand at a $500 million market cap, which like, I had never heard that before. So I don't know how much BS that is. But like also, this kind of goes back to like this whole insider thing. And I see a lot of these like younger influencers on crypto talking about like being an

insider and why it's a good thing. And then talking about things that I'm like, that sounds somewhat illegal. I mean, I don't know. Do you guys have any like larger thoughts on like what was some of those things that we saw happen as it relates to the mean coin cycle? I mean, look, I'm not an expert historian on traditional finance, but the way that, you know, insider trading rules, and again, I'm not a lawyer, but it's tied to publicly traded securities. That's one thing. But I think more importantly, when these rules were drafted, the internet didn't really exist, right? Like, and the idea that we have in alternative financials, system through cryptocurrency, coupled with the speed of light propagating information around the

world, you know, I'll give you another example to kind of prove my point, right? When SVB kind of had their issues in 2023, they got dedos by withdrawal, a distributed denial of service of withdrawal, because the way that the banks were originally set up was that people had to physically go into a bank to withdraw their money and they could slow down a bankrupt, right? What happens when everybody's doing it on their phone at the same time. It's the same sort of concept here is that there's myriad chat rooms that I'm sure we are all in Telegram and discords and Twitter and all of these things where information is flowing all over the place whether you like it or not. I mean, I have people send me stuff that I just completely ignore because I'm like, first

all, I don't know what you're talking about. And secondly, I really don't want to know any of this information, right? But it happens throughout the industry. And it's likely a symptom. of the immaturity of the industry, but coupled with the advancements of the technology for this alternative financial system that currently exists, which is if we take rules from, say, the analog world from the 1930s and try to apply them or shoehorn them into this new system, it's likely not going to work. But also the opposite is true. If there's just no guidelines or, you know, I'm sure that people can have a moral compass, but good luck trying to convince everybody to have the same one, you know, that's, there's going to be some.

value, I think, in identifying and outlining these types of things. Will the Trump administration do this with their crypto counsel? I have no idea, but it's likely not going to slow down anytime soon, especially because the media loves to point out headlines of 17-year-old kid made $2 million on chill guy, right? Like that, those people have so much traffic, just like the same headline of school bus driver wins the lottery, right? Like, it just, it's never going to end. I remember the thing when I lost my train of thought, which goes back to what Rahm was saying about like learning the things of the past. Repeatedly, this has been happening for at least five years for me.

Talking with people in both sides makes me realize that people just don't understand a lot. Like all of us here kind of straddled this line between the traditional financial side and the defy new crypto side. But sometimes you talk to people that are solely in crypto and they just like have no concept of like they think they're discovering new things that have been like, you learn about that in Econ 101, right? And then you talk to people in TradFi and they talk about stuff in crypto and you realize they haven't done a lick of research into how this stuff works. And there's like this, these people are so siloed and they, I don't know, it's just fascinating.

And I kind of thought it would stop by now, but it really, it shows no time, no sign of a baiting. That's the opportunity. Hi, I'm Matt Hogan, CIO of crypto asset manager Bitwise. Look, crypto can be confusing. There's so much noise and the space changes so quickly. That's why, every week, I write a five-minute memo on the biggest stories impacting crypto. In plain English. Why is Bitcoin up or down?

What are people missing? Where should investors look next? Get the lowdown every week. Sign up to get the weekly CIO memo delivered straight to your inbox. Go to bitwiseinvestments.com slash CIO memo. That's bitwiseinvestments.com slash CIO memo. carefully consider the extreme risks associated with crypto before investing. James, what did you think about these 13F filings?

I know you and James cover ETS. And, you know, we saw Wisconsin buy Bitcoin via Ibit. Abu Dhabi, you know, home to Dubai, UA, home to Abu Dhabi and Dubai bought Bitcoin. Thoughts? Any other notable institutions buying? Yeah, I mean, Mubidala, which is that, yeah, that's the, you know, sovereign wealth fund of it's one of them

they have six it's the second largest we have more than one sovereign wealth fund by the yeah they've got they've got six and that's the second largest and it has a it has a whopping I was actually compiling a list for the newsletter of all the recent institutions that one's notable another really notable one is brevin Howard a new holding of 1.4 billion dollars worth of iBit

which is huge Goldman Sachs increased its iBit holding to 1.3 billion, up 88% from the end of Q3. Interesting, there was a Hong Kong-based fund called Avenir. Hong Kong has its own ETS, but whatever, Hong Kong-based fund Avernear increased its Ibit holding to $600, 600 million from like $22 million, which is virtually nothing. And what are the other ones? Tudor Investment, the Paul Tudor Jones Fund. That increased its disclosed Ibit holding in Q4. to almost 430 million, again up 80 more, up more than 80% in terms of number of shares from Q3. In other words, these are just a lot of increased institutional holdings over Q4. And that's as of the end of December. Wouldn't be surprised to hear they've been accumulating since then also.

The one caveat I would put in there, a lot of these are hedge funds. So they can be very fast and quick. There's a lot of window dressing around these 13F reporting periods. I think the Mubudal one is the real big one in my mind. They're the seventh. largest holder now of iBit on record. But again, those hedge funds, they often, they seem to be using Ibit a lot for that cash and carry trade. Basically, they short the futures and go along the ETF and just basically get a virtually, I don't want to say fully, but it's almost like a risk-free like double-digit return by doing that. So I wouldn't be surprised if that's a bunch of this hedge fund side of things, aside from Tudor Jones, because he's been, you know, specifically pro-crypto,

pro-gold. Some of this is definitely people leading into hard assets or potentially hard assets in gold. So those are my views on it. But the banks and Goldman, those are all surprised. And they could be market makers in some regard, but it doesn't matter. I mean, no matter how you slice it, whatever reason they're buying, they're buying. Where Goldman is housing is to be interesting. Obviously, they can't be doing it proprietary capital. Market making doesn't need that much inventory, but they'll have some there. They'll do some market making, right? But I imagine it's their asset management, their wealth management clients are... Yeah, they've been traditionally, and I mean, their head of wealth asset management

has traditionally been very anti-Bitcoin. Yeah, the only way, so I don't know this for sure. So again, this is just my understanding of the situation. They are relatively anti. But for the most part, most of these platforms, like the Goldman Private Wealth, the JPMorgan private wealth, those people, they can't recommend to their investors, their people, their clients that you buy Bitcoin. But if I'm a client of Goldman and I'm a billionaire or a cent a millionaire and I'm like,

I want a couple million of Bitcoin in my portfolio, they're probably already greenlit to do that for clients, just not necessarily recommend it. So there could be just high net worth individuals that want exposure to the asset class that are telling their advisors to do it. Because from what I understand, most of these big banks, wirehouses, wealth platforms, still haven't fully greenlit this for advisors to recommend it in their portfolios as an allocation, even if it's one or two percent, it's still not greenlit to do that. So this could just be, you know, their end clients being like, we want this. I agree. It's after retention.

There's two things that when you first started talking about this that stood out to me. First, yes, the basis trade is very real. One of the things that we track in asymmetric is when the annualized basis goes above 10 percent, you start to see a lot of people pile back into that trade. It's around 8 percent annualized right now. And this is one of the reasons why you see an open interest on the CME drop off pretty significantly. But the bigger and more important, interesting aspect of what you said was that these are 13S files

from Q4 and that hedge funds can train in and out of these things. It's almost like there should be a real-time, transparent database for where these things sit so we can audit them in real time to know what these actually are. Does anybody have an idea of what that could be? Well said.

I mean, that's the reason we kind of know what happened with Libra so damn quickly. It's, we said this already, but it is fascinating how quickly this stuff gets found out. You have these on-chain sluice that I think are going to be worth a lot of money in the future, the likes of Zach XPT on Twitter that are able, like, I'm personally not able to do this. It's somebody who like tangentially kind of looks on-chain and looks at stuff. It's not, I'm not like an expert.

But looking at these other guys, they're just, it's really impressive how easily and quickly it is to track people with on-chain movements, which, again, it's another strength. of the blockchain as far as I'm concerned. Data is power, and on a blockchain, we all have access. Right on. You'll see the tweet from Elon Musk where they're going through the payment system of the Treasury and they're finding people getting Social Security payments that are older than 200 years old.

And there's some people that are older than the entire state of the Union, the entire United States. And, you know, they're going through, who knows, like what, Cobal Code or whatever else? Yeah, there could be wonky stuff happening in there, but who knows? Yeah, yeah, yeah. Right. And we just need to get to a world where all government payments are on chain. So you have accountability, you have transparency.

Sunlight is the best disinfectant. Yeah, totally agree. But can you imagine Congress agreeing on something like that? Why not? I don't see why not. I mean, Congress should be for reducing waste and fraud and abuse. At the very least, mistakes, there's no justification. Who are these 300-year-old vampires in our population?

Either that or you have a major disclosure event that's going to happen from the homeland. One or the other. There's something interesting that's going to. It's the UFO, the UAP phenomenon. Which one is it? Choose your thing. If you ask the average American, you know, what's your experience like using a government website? 99% of the time they're going to be like, it's horrible, right?

And if you see the private sector applications that we use every single day, they're not like that. Now, this is a kind of like a gross analogy or generalization, but that is consistent with how the tech infrastructure for the U.S. government has been, and it's intentionally designed that way. So when I ran my last software company, we tried to sell into Department of Defense and a handful of other government agencies. And it was an absolute nightmare. And we had customers with like Goldman Sachs and Citadel and Visa and Delta Airlines. It wasn't like we couldn't close large corporates, but the incumbency that's in the government for these IT contracts, it's just next to impossible to get a wedge into them.

And so, you know, I for one have been the most bullish on the U.S. government, I think since I've been alive given what's happening because even if, you know, only a fraction of what has been surfacing from Doge and other forms of accountability across these agencies forces them to actually upgrade their systems, please make that happen. It's going to be interesting because, you know, the government does rely on private contractors for infrastructure and systems like Booz Allen Hamilton, like Accenture, like Palantir, and AWS, too. And AWS.

So, you know, how do you modernize the government when the government's already relying on private, firms to advance the ball. There could be a mix shift. Palantir is going to be a winner. I just saw earlier that Marjorie Taylor Green bought Palantir a few hours ago, and she's on the Homeland Security Committee. Pretty sure Palantir won some contracts. Obviously part of the Peter Teal Mafia.

So it's an interesting question, but at the very least, shining a light on, you know, the abuse and the waste and the fraud. I agree, Joe, it is so needy. know, I started my crew actually management consulting, and we would go in and just identify ways to cut costs. We called that reengineering. We're like one of those consultants on that movie office space. We're the two people, one of those guys. And we would find like tens of millions of dollars expenses to cut. And these are well-run organizations like American Express and Discover and MB&A and other very well-run organizations. But you find opportunities to cut costs.

for sure you're going to find hundreds of billions of dollars of waste at the U.S. federal government. No doubt. It's going to get cleaned out. So, yeah, I'm looking forward to that. I think they will find a good amount. I have a story to chime in there. I know somebody who's at one of those Mag 7 names or Fangstocks, whatever you want to call

them, those big names. And he runs it. He's like part of a team that like their whole job is to go across different departments and look for where there's synergies and when they can use like machine learning and AI to like limit like costs and stuff. And he's like every quarter we save like 30, 40 mil. Like it's just like, it's like lifting up a rock and like, oh, there's like there's 50 million dollars that we can save and like just stuff like that left and right. And so like I hear stuff like that at big companies who are some of the most efficient companies in the world like you

were saying, Rahm. And I'm like everyone like freaking about Doge. Like I get it. There's some issues here. And I'm not going to poo pooh the people's concerns around that front, whatever. But like knowing what I know about some of the most efficient companies, most valuable companies in the world from people who have worked at them. And this is the example I'm talking about. Like, just understanding negotiating tactics from your suppliers that are like you save so much money. And I find it so hard to believe that there isn't literally tens, if not hundreds of billions of dollars potentially into the trillions like they're talking about that can be saved by doing some of the stuff. I just don't know how if we're actually ever going to do it. There's a big pushback.

Do you think the DNC got the message and you think they're reading the room correctly? Like, let me frame it up for you. So two weeks ago, we saw an image of a guy outside, I think it was a CFPB, and he was confronted with like a phalanx of members from Congress like Maxine Waters and others dressed up in nice furry coats. And this guy's got like a Band-Aid on his neck and just trying to do his job. And I looked at that and I said, wow, they really didn't get the memo. I don't think they really understand where the public is on this. And the point of view on coming from is Well, their base isn't on that side, though. It was one thing I would push back. The base is on their side. I think the progressive base isn't on their side. I think federal workers are not

on their side, of course. That's the special interest. But it's in the interest, you know, for the United States to have a competitive two-party system to bring the best out. But I don't think the DNC got the message? I thought maybe for two days after the election, I saw some commentary where they seem to have recognized. They had a recognition. I don't think they, I don't think they've got the message. The big question is what impact are these cuts in spending, but also in employment, federal employment going to have on the broader economy. I was reading an article this morning about house prices in the D.C. area have plummeted like 30% over the past two months. That obviously is going to affect bank balance sheets as well. And is this going to ripple across

the country, in which case is what we saw in retail sales last week, a very painful surprise to the downside. Is that just the beginning? Yeah, just to throw in the numbers here, I'm looking at them right now. Retail sales, they were just released that Noelle's talking about. The survey, the expectations were for down 0.2% month over month, and it was down 0.9%. I mean, some of that is definitely seasonal as far as I can tell. And like what I'm looking at, I don't know how much of but it's definitely part of it. But I'll go back to ROM or Joe if they have any thoughts on the macro side from the downstream impacts here.

Yeah, I mean, it's always helpful to cherry pick data when it fits your narrative. So I'll just do that now. So yes, there were fires and yes, there were snow. That definitely affected some things. But I think if you dig into the details, you notice autos were actually the things that were down the most. And so why is that the case? not really sure, but the market seemed to shrug it off. And last week, I mean, you kind of had a hot

CPI, at least headline level, right? You know, PPI was high, but even if you dug in the details, really portfolio management that shows any positive increase, all the other pieces were pretty much negative. Market continued to shrug it off. The equities markets, I should say, right? And markets tend to bat, you know, if they can bottom on bad news, if not let alone make all-time highs, like what regime are we in right now as it relates to risk? And why hasn't crypto been participating? You know, the dollar, the DXY index is down. I mean, it's like 106 this morning, if I remember correctly, but yet Bitcoin hasn't rallied on that. Normally it would.

Well, you know, and this is interesting is that, you know, I'm a big fan of the global liquidity narrative and meme. And there is a lot of credence to that. But in Q4 of last year, global liquidity actually detracted a bit. But we had Bitcoin hit new all-time highs. Why? The election, right, is obvious. The idiosyncrasy came into the market and said, we don't care about your correlation. We're just going higher.

And we're starting to see some of that happen again in the opposite direction, whereas, like, well, the dollar has now peaked. Rates have likely peaked on, you know, on U.S. treasuries. And yet, Bitcoin's just kind of like doing this sideways choppy dance. usually that's a sign of consolidation underneath a level of resistance before the next like higher. The question then is obvious, well, what is the catalyst? And if you look at the headlines since even before Trump got an office, I mean, I don't know if you could have dreamed of a series of positive headlines for crypto, like what we've

received in the past few weeks, and price just isn't reacted. If your observations, like one is I don't think the cut in the federal labor force is going to have an impact on the economy because it's offset by Americans rallying for that to happen. It's juicing their animal spirits. And we see that in various sentiment surveys like small business confidence survey. You see it obviously in the stock market too. So people are getting more excited. And then you got tax cuts in the back half of the year.

So they're looking at that and saying cut that waste and they're investing more in spending on the CPI print. There's a seasonal component here. There's a chart, I think it actually came from Bloomberg, James, where they looked at the CPI print, and there is a seasonal hot print in January. So look at January of last year. It was also hot. So I believe the market just read through that and said, hey, this is a one-off. But we'll see what's going to unfold, obviously.

I think it's another aspect, Ram, that I think tends to go unnoticed that a lot of the government. job creation is really at the state and local level. It's very rarely at the federal. And so I agree with you. I don't think there's going to be like some. I mean, it's great for the media to spin up people about all these people that are getting fired. But the net impact, I don't think is going to be really that big. But a bigger component from the macro side that I've been tracking for quite some time. And I've had this view for months now. I think oil is actually going a lot lower. Hard to have a reacceleration of inflation with oil trading like 45, 50 bucks a barrel. It's obviously not there yet. But a lot. Wow, that's pretty low. Well, look, I mean, I saw today, I saw, you know, a Wall Street Journal article suggesting that a Ukraine-Russia peace deal drops Brent crude by $10, right? I don't think it's going higher. It's a fair point. And OPEC, I saw something that's the point OPEC are thinking about pushing out their production hikes even further.

Yeah, they want to deal with Trump as well. I would say, look, this is the stated policy of Scott Bessent and Trump, and they've said it again and again. they want to increase energy production and drop the cost of oil because they know it's going to help Americans at the gas pump. That's right. They want to drop the cost of housing. They're looking at building homes on federal land. It's kind of incredible what they're doing.

Like, no one's thought about that. It kind of makes sense, too, right? So, yeah, no, I think it's, that's obviously bullish too. If you can get lower oil prices, oil prices are bullish for markets. The other thing I would add about people getting fired, I mean, they were, they're also getting like, I think the number is eight months pay and benefits. So it's not like they're being like left out in the cold, but like that's what it seems like from some areas. But I mean, honestly, there's a reason there's so many people taking these like job offers despite most. It seems like you talk to, you see anything from like these lawyers or these unions.

They're like, don't take them. And then like it's still like so many people are taking them because it's like here's eight months pay and benefits. And you could go out into the world and find a job in the private sector. I mean, honestly, if you're in that position, I'd consider it. Like, you'd be crazy not to consider that. Eight months, pay? How many were duly employed? Yeah.

Are we going to find that out? And that's fraud. And, you know, you hear stories on Reddit of people working the last two days of the month and the first two days of the next month, and they show up in office to their minimum attendance criteria. And they get a second job. They're going to keep the second job because that second job is not going to offer eight months of severance.

So they'll quit the federal job. take the eight months of severance and then keep their other job. So, I mean, look, it's good riddance. They're supposed to be public servants, and it's actually a public grift. That's right. I agree. All right. I guess real quick, I'll just point out where rates are since we're talking on macro. And then let's get into a little bit more on what happened with the crypto markets pricing.

But I guess right now markets are pricing for one cut some point between July and September of this year. and then pricing another cut, not until, like, potentially in the middle of 26, but really, like, we've really pushed it out. Like, the market is not expecting any cuts anymore. You even hear some people talking about hikes again. Obviously, with the CPI inflation print, if things start heating up, people worry that the Fed's going to start hiking again. I can't, if that's what happens, one, I don't hope, I really don't want that to happen

personally. But, like, also at the same time, it'll be fascinating to watch Trump's interaction with Powell if we see like a reacceleration of inflation and him basically telling, fighting with Powell as he hikes rates. I think it also kind of hints that this might be more fiscally driven than necessary monetarily driven, which we've talked about on here. I don't know if you guys have any thoughts on that before we get into crypto market action over the last couple days.

It would also depend on the employment data. I mean, again, if we're going to see unemployment start to take up, that politically is going to be very sensitive, even though economically it might not make much difference. But you're certainly can't raise rates if unemployment is ticking up. I mean, I think we also learned that it's a lot. it's a lot more politically dangerous to have hot inflation than it is higher unemployment because unemployment only, I mean, granted, it's awfully, it's going to be horrible for anyone

who gets unemployed and loses their job. But like, that's a smaller subset of the population. Yes, the economy tends to slow down. But it feels everyone I know was people who have no idea how finance works. I have people who thought like, you know, everyone was saying inflation was transitory. Obviously, that was pretty wrong. But I have like friends who don't know this who just assumed. that meant that prices were going to go back down to where they were.

Like, they just didn't understand what inflation actually is. They just expected, like, a return to the old price levels. And, like, that still seems to be a thing. So there's, like, this common misconception that I think, like, politically speaking, obviously this isn't how the Fed thinks. Like, inflation is definitely worse than ticking up a couple points in unemployment. Yeah, I'll just add that, you know, I actually think that the most asymmetric trade right now is actually the Fed Fund's futures where people are just not pricing it in cuts, except for,

I think December at this point. Now, this is not financial advice, of course, but like, all it takes is a little bit of, you know, soft data, and those things are coming right back into the market. And right now, they just keep getting pushed out. I think it's a totally fair observation. Like, my view is on the macro, I'm in the hot landing camp, right? You've got a couple different camps. You've got the no landing camp.

I think the pivot camp is done. The hot landing camp says the U.S. economy is strong, is stronger than people think. And as a consequence of that, you will have hotter inflation than people think. Now, I don't think that's actually bad because I expect that the Fed will tolerate the higher inflation, just like we're going to be.

Whatever their logic is, it might be to preserve the independence of the Fed. They might actually preserve the dependence of the Fed by not hiking rates. So therefore, they don't get interference from Trump. And their message, Powell's message is, we're not going to raise rates. He reiterated that message last Wednesday. So if the Fed doesn't bring the hammer out, then I think it's okay. and the fact that the inflation is driven by a stronger economy, that's good for earnings,

for corporates, for consumers, for spending. So I think it's actually okay. You know, you probably will have sell-offs on these hot CPI prints, but they should be viable sell-offs. Totally agree. So let's go to real quick before we wrap up here. I don't know if anyone else says on any other topics, but I just want to talk about like basically there was one do you does anyone know what happened this morning around 9 a m like

markets just kind of like went in one direction it was like almost like an unwinding of the the long soul short eth position so i mean basically today like today's we're recording this monday evening um salana's down four to five percent throughout the day um but ethereum on the flip side was up three to four percent so like i guess i'll go to you joe as the salonable here like do you see this is just people kind of unwinding some of those trades after what happened here. Do you think it matters anything long term? Like what happened at 9 a.m. this morning.

You have any thoughts? Yeah, I mean, the simple answer, there were more sellers than buyers. But look, like I think I talked about this a little bit earlier. Like the markets are incredibly thin right now. It does not take much to push something in one direction or the other. I can tell you this from my own experience. And sure, give short sellers a reason to push salona in a direction. because they're catching a lot of flack because they're the blockchain that enabled this,

you know, scam over the weekend. Like, I can see that totally happening, especially on a day when equities aren't trading and you don't have any ETF flows, right? To me, this is just par for the course for any market, really. There's just very thin liquidity across the board. And you can just see people pushing things around in the directions that they really want. I mean, even Bitcoin at one point, the relative move on like a five-minute candle today was like pretty pronounced,

but the volume was just not there. And so, you know, is this a bigger issue as it relates to liquidity that market makers are providing in the markets or not? I don't really see evidence of that. I saw a little bit of that in late December, but I saw a lot of that start to come back in the new year. So it's just, you know, it's a benign trading environment. you know, it's not great for people that prefer volatility like myself.

So you just got to sit and wait and be patient. You don't think $250 to $180 on sole is volatility, Joe? $2.95. $295. Okay. That's a volatility. $2.95 during the Trump mania, yeah. Not enough volatility.

Well, believe me, I sold that volatility when it was when I think the balls that I was getting from dealers were around $150 at that point. So I definitely wasn't buying it. Gotcha. So last week, you know, Alex and I were talking about the record short position in ETH futures. I can put on the screen there, James, if you see it. So not only are people doing the basis trade between Bitcoin Spahn Bitcoin and Bitcoin Futures, people also short ETH and long Bitcoin or long Solana.

So this relationship just got overextended. And in a thin market where you've got an event like Argentina, Solana, meme coin issues, it's not hard for this to come unwound. And And therefore I'd expect some Eiff our performance just for that technical consideration. I think that's what's playing out here. And also Alex said he like he thinks ETH is very overowned. And I was thinking about that afterwards after the call. And I was like it might make sense that people like if you're a long term holder of ETH, right, a lot of people obviously hold ETH that's been an asset, big asset in the space since at least

2016, 2017, right? Like one way to just like hedge the current exposure rather than completely sell and bet on the current market trends might just to be a go short CME futures, right? Like, that's an easy way for somebody who has a bag of ETH to, like, say that maybe they're bullish long term, but they're worried about it short term. So I think that also can be attributed to it. But I'm with you, Rahm. I think this was kind of an unwinding of like, you know, the long soul, long, everything else, short Eith. And it was just a quick pop. And I don't have any thoughts on where that trend is going in the near term. But it just felt like sentiment was so bad for Ethereum for the last couple of weeks.

Like, you'd have been crazy not to bet on some sort of pop at some point in the price of the area. It's been that sentiment has been so bad for so long. I mean, look, if you look at the EFBTC chart, it is in a downward channel for years. And so many people have been trying to call the bottom on this thing. And it's a sentiment is so bad. And yet it just keeps making lower lows. I'll say this. There's a difference now in that sentiment is so bad everywhere.

Except maybe Bitcoin. Bitcoin is the least worst sentiment, like democracy, I guess. But everywhere the sentiment is just horrid. Look at the crypto miners. The sentiment also is poor there. I've got a screen here of Wolf, which is a crypto miner. They're trying to pivot into like an AI play. It's got a well-run math.

Yeah, high-performance compute stuff, right? Right. I don't own it. But now I'm actually finding this stuff interesting. Because I've come back to the 200-day moving average. across Bitcoin and other spaces, implied volatility is low again. So I think actually, and I've been, as you guys know, I've been bearish on digital assets since mid-December.

Now I'm actually like, huh, I think there's some interesting moves to make now, at least for a tactical bounce. You know, tactical bounce meaning a couple weeks, maybe two months, something like that. Yeah, I mean, look, Solana, as we say here today, day and there's still about an hour change till the close, it's below its 200 day moving average for the first time in a very long time. And it could close below there. As long as on its, it's Monday, but it's on its fifth potential red week in a row, which is just wild to think given what's happened over the course of the past month plus. And a lot of other

assets are deeply oversold. Bitcoin is kind of hanging in there. But if you're looking for like, a tactical entry point. If it's not now, it's probably soon when, you know, sentiment is kind of like people on suicide watch and things are deeply oversold, getting to levels that like a lot of, you know, momentum traders will want to actually buy a tactical balance. I completely agree with you on that, Ron. Noel, any thoughts on what's going on in crypto price action? Agree, disagree with these guys? I don't have deep thoughts, to be honest, because I basically follow Bitcoin, Eath, I haven't been following many of the others, but I totally agree that sentiment is bewilderingly negative. And I would argue even for Bitcoin, given the headlines, given the

tailwinds, given the macro scenario, it's range bound. It is really crazy that we have that many positive headlines for Bitcoin and it's still around 96,000. So whales are dumping. That's the only explanation, right? Wales are dumping in the spot market. There are sellers, which in a way is optimistic also because eventually the sellers will get exhausted. That is how this works. We need the buyers to keep buying at the rate that they are to exhaust the sellers. Have you got seen that David Goggins running video at the David Goggins meme? The sellers are like, the sellers are exhausted and David Goggins looks at I'm the seller. Then again, there's an argument to be made that the buyers are not really even just getting started yet.

What we've seen is the tip of the iceberg. I mean, also, I mean, Laura Shin just, who'd she have on? I listened to the podcast this weekend where they were talking about this divergence and sentiment. And like, it's weird. That was Jeff Dorman. It was a really good debate. Yes, Jeff Dorman. I'm more in his camp.

They're both right, right? Like the cause is definitely this, those others category that Joe was talking about, these meme coins and these other things that are down real bad. I mean, we talked about this last week, down 80, 90%. And I think, Rahm, you said this. It's late comers to the party, right? They're coming in late. They're jumping in.

They're not. They're like Bitcoins, too. old school. Like, I'm not getting involved in that. And like, I think there's just this complete disconnect from like the fundamentals of some of these. I know fundamentals and crypto is kind of crazy, but some of the fundamental like things backing this, some of the headlines that were happening and like things aren't moving. And it's like we talk before like the tradfi world and the defy world. And it's like in the tradify world, people are like finally starting to take this seriously and look at like the positive

catalyst that are coming the way of crypto. And then you look to like defy it. It's just like a bunch of people like ripping each other's hair out. It's like the, there's a meme out there where there's people fighting. There's a dude just like smoking a bong in the back. And it's like, that's what it feels like people are just paying attention and watching what's happening. And they're just like fighting with each other in the trenches, all over this stuff that a lot of tokens that are like barely being used. There's probably some really cool tech in there. But like the stats and the fundamentals don't back them up. And still people are just like, no, this is the token that's going to win. And meanwhile, like, there's so bullish. The noise to signal ratios off the charts. And this

brings us back to sort of what we started talking about, which is probably a good place to start wrapping up on. And that is the noise is in the meme coins. The noise is in some of the defies, and they are a very small percentage of the crypto market. That's right. Let's close with this question then. So obviously, Solana has leaned in on the meme coin hype cycle more than any other chain by far. Others have tried to get into it. I think particularly like Ethereum was known for some of the other stuff, NFTs, ICOs and things along those lines in the past. One, how much of Salana's metrics are like based off of this huge hype inflow of meme coins? Do you, I know what Joe will say, but I'm just curious, like, is it's so overpriced if

like all the meme coin activity disappears the way that we were kind of talking about? I know, I mean, nobody thinks it's going to completely go away. But it's like, are some of those fundamentals that are arguably competing with some of the Ethereum fundamentals? Are they juice by the meme coins and mean coins going away? What does that mean? I'll go to Rom first because I know Joe's itching to talk. But, Ram, what are your thoughts on that thought process there for Solana's valuation? And I'm putting my fingers up in quotations. Yeah, look, I go back to that ETH ICO analogy. I think you had a lot of burned investors. And it'll take some time for Solana kind of work through the psychological damage of that buyer base. I think we'll get through it. Look, if you think

the beta for crypto assets is positive, Solana's the fast source, it's got the momentum. That's supposed to be the correct answer to what you own. It's a momentum masterclass. Own what has the highest momentum. That said, you've got this kind of hangover from the meme coins. And we need to see how long it'll take to work through that kind of damage, that emotional damage. There's another meme for you there that's weighing on people.

Yeah, I mean, my thoughts on this are obviously I've been in Solana for a really long time. And, you know, I remember, mold enough to remember when people hated on Salonica's, they weren't generating any revenue. And now they're hating on Salonicas, they're generating too much revenue. It's more the revenue source. They're hating on it for the revenue source. I don't care. And so, you know, like, if you look about a year ago, a little less than a year ago, right after,

yeah, actually right around this time, right when the Super Bowl ended, you started to see a massive spike of activity on meme coins on Solana. And then it kind of fizzled out. People said it's over. I know some ETH heavy VCs that were very much loviating on Twitter about how it was officially over. And wow, that couldn't have been more wrong. Could this be a turning point?

Absolutely, it could be a turning point. But I don't think that all of a sudden you're going to see activity go to zero. It may, it should start to normalize to a more reasonable level that isn't just meme coin frenzy driven by things like the Trump launch, et cetera, which ultimately jacked, you know, Solana to a new all-time high. I don't necessarily think that the mean point activity is going to be the thing that determined the long-term value of Solana. And the reason I say that is even when there were reliability issues with Solana, I was a proponent

of saying, like, we should be testing the network, period. We should be trying to throw as much activity at it as possible. And so the longer term view that I have had for Salana for a long time is pressure test this system as hard as you can so that when these types of breakout applications, and I'm not talking about meme coins, start to land on this chain, whether it's through a mobile device or otherwise, it's ready. Memecoins just happened to be the thing that tested the network and have continued to test the network in a way that no other chain has been tested.

And to me, it's really hard to be bearish fundamentally on that chain, even if the activity of meme coins starts to drop. Noelle, thoughts? Nothing to add, though. What you said made a lot of sense. Doesn't Bitcoin have the relative strength, then, you got the marginal buyer that you can identify the 13Fs? You got Paul Tudor Jones.

You got sovereigns buying. Oh, the majority of my portfolio's spot delta equivalent is Bitcoin at this point, right? Like I have been on record for a long time, much to the dismay of crypto Twitter that I don't think there's an alt season anytime soon, right? I don't think Bitcoin dominance is anywhere close to- We're all in agreement on that. I think Alex is also an agreement on that too. So, yeah, I think Bitcoin has the relative strength, it's got the sovereign adoption.

If they don't find gold in Fort Knox, Bitcoin's going to go up. That's the event that you guys want to trade ahead of? I'll short that thesis. I think the gold will be there, but it's kind of hard to... What about the gold, the Bank of England? That's... Well, you want to double-click on that? Noelle? That was quite revealing or... Exactly. And there is now a theory going around that so much gold is rushing out of the Bank of England to the extent that there's now an eight-week waiting list because the gold isn't in the U.S. where it should be. Yeah, conspiracy theories. I guess we'll find out. Maybe we'll find out I was wrong to call a conspiracy theory.

I'll short that one for now. It is astonishing, though, the inefficiencies that are coming to light in physical gold. And let's face it, for sovereignty, you want your physical gold. And the demand for gold is global. And many central banks, as well as institutions, as well as savers around the world, have been stocking up. But it's the inefficiency of the gold market. Normally, the U.S. is very derivative heavy. It doesn't actually settle physically very much.

But that's changed because of demand and because a lot of traders are now actually unwinding short positions. and neither rise they didn't have the gold, so they're shipping it over from the Bank of England. Turns out the Bank of England isn't very good at that. It's not set up for massive physical deliveries. They don't have the right parking deals. They don't have the right kind. They don't have as many trucks as they would need. And get this.

There's a limit on how many gold bars you can put on a plane, not for weight reasons, for insurance reasons. Almost like we need a digital version of gold or something. What if there was a way to get the gold anywhere in the world? in a verifiably transparent way. And this is even before we start grappling with the fact that we don't know how much gold is in the Bank of England. We don't know how much gold is in Fort Knox. We don't know how much gold is under Wall Street. We don't know how much gold is in the ground waiting to be unearthed, whereas we do know how much Bitcoin there is in circulation and will be. It's a powerful way to conclude. Yeah, gold's knocking on all-time highs. It's knocking on that three

level. So it's also interesting there. Bitcoin and gold, both pretty much knocking right around all-time highs. Except gold, and I don't remember this happening before, gold has outperformed Bitcoin so far this year. Yep. Yes. It has. It's very much. My last comments, I'll just say I agree with Joe's take probably on Solana. I think the mean coin stuff went to Solana solely because it was the fastest horse at the time, take it or leave it. What's their phrase? Reduce bandwidth, increase, decrease, or increased bandwidth, decreased latency or whatever it is. It seems to be working out in the markets. I mean, we'll see if it keeps going, going forward. But that seems to be, like, whatever the next hot trend is going to be, whatever it may be, it's going to go to the

fastest, most easily UX available chain. And in this most recent cycle, it was Salana for better or for worst to those listening in your bags. Does anyone have any final thoughts before I I'd be a bearish goal along Bitcoin? I would do the inverse of what's happened to date. I think there's an ETF out that's going to do that in battle shares form, but we don't need to go there. All right. Thanks for joining us for this episode of bits and bits. We'll be back in one week to discuss more about how the worlds of crypto and macro are colliding. Until then, everyone.