The $100 TRILLION Crypto OPPORTUNITY with Kevin Follonier

30:01And that is debasement. And we've seen it with air miles. So if you tell your mother, she's like, I don't understand what you're talking about. So do you remember when you first got your air miles on Swiss Air? And, you know, if you flew to London a few times, before you know it, you could get a flight down to Marseille. Yes. And now you fly to London for a few times, what does it get you? I don't know, a pair of plastic sunglasses on their website. that's debasement. That's when you excessively issue points, rewards, money, that the value goes down. And they're doing that by 8 % a year on a globalized basis.

30:42So it means that any asset that you have needs to go up by more than that, or your future self is poorer. And there's a really important concept to introduce here, which is what you call wage deflation, right? Which most people need to understand when you are working, you're basically earning a certain salary. If your salary doesn't go up as much as the money printing, then what is the definition of retirement? Is I need to accumulate enough assets so that my assets I own, when I retire, they cover my life expense. But if there is money printing, therefore the fiat currency is worthless compared to fixed asset therefore what i work for which are is my retirement which is buying these assets right is becoming harder and harder because of wage deflation so the wage deflation if you think about how companies pay you whatever you do let's assume you don't work for a big tech company get millions of shares let's assume you just do an ordinary job, you go to work, you get paid, you work for Procter & Gamble, whoever it is.

31:56That company's P &L is driven by the economy. Your wages go up and down with economic growth. And so, well, they don't go down by economic growth. You lose your job. So you take a hiatus in your earnings for a period of time. However, the stock market goes up based on the debasement of currency. So therefore, your wages every year buy you less of a house, less of a share of the S &P 500 or whatever stock market it is, and so on and so forth. So you're getting poorer. Which I can actually see with the conversation I have with my friends who are in the early 30s. Yeah. They basically tell me, since like one or two years, even the, I would say, normal people who don't invest and don't really, let's not even talk about crypto.

32:50Let's just talk about normal investing, right? They're just saying, I don't understand. I'm working like a slave 10, 12 hours per day and I earn so little. Like my salary I'm getting, I realized already now I'm 30 or 31 that I'm never going to be able to buy a home or a flat. i started this discussion back in there was a famous piece that i did it's got like four million views now called the retirement crisis i remember that and i explained how this was going to play out which was that young people were totally fucked and that they were never going to get up the ladder and they needed a gift and back then this was 2016 i said crypto is that gift This is the only way I can see to get out.

33:35And that has continued to play out to this day. And now those same people who were 30 then are now 35 and they're having kids. So they're moving out of cities, buying houses in the country because it's cheaper. They're not going to work in the office because it's cheaper. They have to bring up their kids and they can't afford a nanny. And they're not going to work. they still can't get ahead. They've got school fees and retirement and their house. Are they renting a house? Do they own a house? Chance they don't own one yet. And they know they're fucked. Everybody knows they're fucked. And they don't know how to get out of it.

34:17And that whole idea, once you understand that people know they're fucked, it explains a lot of how the world works. It explains why we get the left and right polarity. I've got to blame somebody for why I'm fucked. Then it is, it's also the rise of the speculative economy. Why? Because I'm never going to get ahead. I have to take risk. That explains GameStop. It all came from Occupy Wall Street. It all came from the same thing. It's all the same movement of these people realizing that their future has been robbed because the baby boomers took too much debts on, because there was too many of them and the economy couldn't cope with that.

35:02So it's a long economic story that got there, but the present day is we need to take action. So how does the hardworking 35, 36 years old guy with a wife and two kids ever retire in these conditions? Well, it's not from wages. So people are doing two jobs. We all are. Bizarrely, right? We're all doing multitude of jobs. that's in itself weird, but we've kind of adjusted to it saying it's normal.

35:38Then they're having to learn how to speculate. They all became financialized. 2020 was like, that whole generation didn't care about Real Vision. There were some people who studied the masters of finance and stuff. Yeah, sure, they cared. They didn't care about markets. They didn't care about anything. They just didn't give a shit. They cared about Instagram. 2020 came and suddenly they were given money and they were at home and they were given a game to play and they saw the future and that was the largest fastest financialization of people I think in all history it was astonishing hey everyone listen if you want to unfuck your future let me help you follow this channel subscribe click the notifications and you'll get everything as soon as it comes out see you there So you talked about GME, right?

36:31GameStop.

36:35But there is other ways, right? What's the concrete solution for people in their late 20s or early or mid 30s to this seemingly insurmountable problem? And I basically split the solution in two parts so people really understand the whole framework here. The first part is understanding liquidity cycles. why should any adult who wants to unfuck their future understand the liquidity cycle you actually don't need to because you just need liquidity cycle is actually somewhat mid-curve meaning it's a over explanation for a simple thing simple thing is all you need to know is number go up the whole system is set for number go up.

37:25So therefore, just be involved in that number go up and own the asset that goes up the most. It's that simple. I mean, people understand this more and more now. But even just a few years ago, again, I'm Swiss. In Switzerland, you don't question the bankers and you don't question the lawyers, right? Like the banker, he has the nice car. He has a nice house. He has a nice suit. So I basically should listen to him. And then I was going to my parents 2018, 19 saying, this Bitcoin thing is amazing. Buy some, they bought some, but like they were like, Kevin, like the day you make a million dollars, we'll listen to you.

38:04So I was like, fuck, I need to make a million dollars as quick as possible. So they start to listen to me.

38:11So how do you, I mean, now people understand more and more, but still a lot of people will say number or grow up. It's too easy. why are all these people in the banking you know industry having jobs if number goes up is just the answer that's a very good question i mean look when i say this i say it humorously but it's true yeah right the whole system is set for number go up that's what debasement of currency does when you have an over indebted system the collateral of the system the assets can't go down because if not, you've got too much debt versus the assets. And that's what happened in 2008.

38:50So the whole system is based on that. The baby boomers are all going into retirement. You can't let the assets go down because if not, they've got all the wealth. So therefore consumption will collapse. The number can't go down. So as opposed to number go up, you could say the number can't go down. So the liquidity cycle is just an element of that. It's the actual mechanism by which it happens. If you're 30, you shouldn't give a shit about that cycle. You should just use any weakness to keep buying more number-go-up assets. For others, it then becomes a cycle to try to take some risk off the table because it's a volatile space, particularly in crypto or technology investing.

39:41Both work well. But then you come to the question is, and most people get to this, is everyone thinks, yeah, I'm going to take money off. And then you're like, and where am I going to put it? Because when, as soon as I take it off, debasement's happening again. So you might put it in stable coins for a bit. Sure, definitely cash in lifestyle chips. Buy that house. Do that thing that you want. But after that, it's difficult to think about getting out. The reason Jeff Bezos is the richest man in the world is because he didn't sell his Amazon equity. People forget that compounding returns. Bitcoin, since 2012, is up 22 million percent.

40:26It's 140 percent a year. In that, it's four down 85 percent bear markets. and it's still that solana was down 97 and a half percent last cycle or 98 and a half sorry it is still compounding at 240 returns a year

40:53yet people will fuck this up because of their ego right and like oh yeah i can uh i can out trade I can buy low, sell high. It's happening now already, and we've barely started. People are now seeing 100x in memes. And they've gone from, I've been telling people, please, play that game. Sure, do it with 10%. Keep 90 % of your allocation or 80 % if you're a total degen, just in the main tokens. Then you can't screw it up. Don't use leverage. self-custody, you'll be okay. But I can see it already. People are gravitating towards the influencers who are talking about memes. The main characters, people like Ansem in this cycle, are getting more and more attention because people are desperate to make money in the shortest period of time.

41:52And they don't realize that compounding at 150 % return, which is Bitcoin, which is the worst performing of the major assets, 150%, you don't need to be in it very long for that to compound to massive returns. But they want to make it all this time. And so I can see them losing their minds already. They're not using leverage yet. They're kind of scared of that, but they will. However much we tell them, please don't use leverage, they will use leverage. However much we tell them, please don't yield farm, in weird shit because you're getting a 60 % yield, they will do it. And I beg them, but they won't listen.

42:36You were actually very vocal last cycle about not trying to get any yield, right? Even the lower yield, 5%, 10%. You're like, oh, I don't understand the risk, so I'm not going to do that. And people will be like, yeah, but look, the yield, even if it's 5%, 10%, but my yield goes up 6x, right? Whatever. even in ETH or this amazing. And we all have this kind of FOMO and then look at the result, what happened, right? And so very often, I mean, not very often, pretty much all the time, the simpler, the more boring, the better. But people are addicted to dopamine. Maybe like they're because they're not doing anything else.

43:17Maybe they're, I don't know, they're bored in their day job. Maybe they're not having a day job and being trader is like their main thing. Maybe what they don't understand is that these influencers, their job is to get the attention and they will say anything that is required to get your attention even if they i have 100 of my portfolio and with maybe true maybe not right but i'm getting your attention that's the goal and that's how i make my money right and so the simpler and the most boring the better yeah but i i don't go for yield even that whole crazy thing where they claim that I had been involved in Luna and all of this stuff.

43:54No, no, I know. I know. Like, we'll talk about that later, actually, in a third part where things are taken out of context. Yeah. But my point was always, I was a macro guy who bought call options or put options and I never sold them because I don't like that risk. And when I saw blowups, I would see in macro land, people taking huge bets. They went wrong. They blew up. I'm like, fine. But then I would see these yield guys, and they would be clipping 2%, 2%, 2%, 2%, 2 % a month, and then they'd be down 50. And it was that risk. If you've got a natural order of volatility in a fund, that's okay.

44:42But when you've got this perfect non-volatility, and then that, it's catastrophic. You'll lose all the investors, you'll lose everything. And that's what yield does to people. and that's where your background in traditional finance basically was massively helpful because you you've seen it multiple times and even in when you compare it you know the the risk asset the risk curve like you're just basically saying hey look it's all the same nothing is new in crypto nothing no we're humans and we we value things in certain ways and i've seen it every time so i was lucky enough to be involved in, there was the oldest bank in England, Bering Brothers, blew up from Nick Leeson based in Singapore, who was rogue trading.

45:27It became a film called Rogue Trader. That was him selling volatility on the Nikkei. And he sold so much, it eventually blew up. It was basically yield through a different way. Then cut through to 1998, the big blow up, long-term capital. Again, they were looking, using stupid leverage to get small returns. When something goes wrong, that leverage goes the wrong way. So all of that, 2008 was that all over again. The history is littered with excess leverage to juice yields. That combination is the killer. And maybe an additional point to that in crypto is you don't even need to use stupid leverage to get wrecked right you can be in march 2020 i was levered two or three x on eath and i got wrecked like so basically it's so volatile crypto that even the non-stupid leverage is too much already i mean i even i often run the numbers through my head and i'm like you know maybe i should leverage my soul bet i don't really like leverage i did when i was running a hedge fund, I'd use a lot of leverage.

46:39I've used a lot of leverage in the past. But when you do the maths, you're like, what is a normal drawdown in Solana? Well, 30 % is like, that can happen four times a year. Okay. So that means I can't be three times levered. Can a 50 % drawdown happen? Yeah, you might get one of those in a bull market. So I can't be two times levered. so I can't take leverage I just can't unless you're really short on trading but I just that's not the game so I can't do it and then I start thinking well do you just buy the deep in the money call options on Deribit and use those because then you can't lose more than you buy in premium but in the end I just stop myself and just say don't fuck this up just don't fuck it up I just don't want to fuck this up because it matters to me i've got a lot of money wealth ego everything riding on this thing like we all have yeah just don't want to fuck it up the simpler the more boring the better because again if you think about the five percent yield or the ten percent yield people are fighting for i'm going to do this and swap to that and then i've got this bridge and i'm getting 12 percent yield over there i'm like solana moves 12 in a day how's this compensating you for risk taking it's just not worth it absolutely and if you think about there's all these points or these airdrops in crypto right it's just to make you do something to make you lose your crypto like that's it like you're gonna lose them you're gonna get hacked like just don't freaking do anything right you don't need to i but I don't do any of that.

48:24No farming for points or drops or anything. But you stake your soul? Nope. Don't stake, okay. I don't even stake. Okay. Now, it's probably stupid, but I'm like, I don't need the 5%. I just put it in my ledger or I store it in a multi-sig and I don't need to worry about it. That's why I got into this in the first place was realizing that you didn't own your assets in a financial system. I'm not going to make the same mistake and give somebody my assets or give somebody control of my assets or give somebody a share of my assets. The beauty of crypto is self-custody. It's so magical. And people don't yet understand that.

49:09They will. And the moment you are farming points or farming airdrops or even staking, you're actually kind of lending your assets or giving it to someone else as responsibility. and therefore the basic principle of crypto is not applied anymore. Exactly. Yeah. Exactly. And just never lose control of your crypto because numbers go up, right? And the whole game is to throw you off. That one magic thing is just hold or hodl. You know, that thing is real.

49:47So solution part one, liquidity cycle. Solution part two, we talked about crypto a lot. I wrote NASDAQ and crypto. I could have written crypto and crypto. We'll get there, but NASDAQ and crypto. Nothing else than NASDAQ and crypto have outperformed the central bank's balance sheet, money printing, plus inflation. So the 12 % since 2008, which means basically that if you own real estate, you're getting poorer. If you own gold, you're getting poorer. If you own S &P 500, you're flat. despite S &P 500 being up 6.5 % 6.5x, sorry since the great financial crisis lows in 2009 so everyone was like I should buy a house in early 30s maybe I have to think differently why are Nasdaq and crypto the only asset classes that outperformed the 12 % hurdle rate?

50:41This is a really important point is everything is easier when you're riding a secular trend? Why was my career successful? I rode two trends. One was the rise of the derivative market. Gigantic. That's a$1.4 quadrillion market now. That was one. The other was the rise of hedge funds. So at the biggest customer base and the biggest product, you can't help but make money. That's a secular trend. you want to be in places with a secular you want to live in a country where the economy's growing on a secular basis it's like one of the reasons why spain is difficult to live in most of europe is like a museum now it's beautiful but it's not a place to be an entrepreneur because the economy is not growing same with japan and china's gone kind of x growth india's the fastest growing economy, the Middle East.

51:44But there's two trends that are easily investable that are in a secular trend. Every day, and it's all the same trend, every day is more digital than the previous day. It's as simple as that. And therefore, this whole trend of digitalization of everything, including human intellect, including human labor, that's robots and AI, including money, everything is going to outperform. So just ride that trend and don't overthink it. I see so many people wanting to trade commodities here and this cycle there. And I'm like, you're wasting your time. You don't need to do all of that stuff. I've been guilty of all of that stuff, but I've realized that you don't need to do any of it.

52:36you said both nasdaq and crypto have outperformed the central bank's money printing since 2008 but you're all in crypto and not in nasdaq why

52:52because all assets are correlated to this the business cycle and the everything code cycle It's all a debt-refi cycle. So if everything is correlated, then diversification doesn't work. So if diversification doesn't work, then you want to own the asset with the best risk-adjusted returns. Now, this is where people get weird. They're like, yeah, but crypto goes down 80 % every four years. On a risk-adjusted basis, it is an alien asset class. The reward so far outweighs the risk that people can't get their heads around an asset that goes down 98 % like Solana and still compounds at 250 % a year.

53:38So when I take a chart of everything, I just compare one asset to another. And I look at the chart of NASDAQ. Looks amazing. It's a log, secular, exponential trend. Divided by the price of Bitcoin to see relatively how it's done, it's down 97.9%. I think it's 99.92. 99.92, that's right. I mean, that's like, okay, so... There's no second best. There is no second best. Making another investment decision is suboptimal if you've got the right time horizon. You know, it doesn't work if you choose too short a time horizon, but choose a five-year, five-year, 10-year time horizon. It's ludicrous, the difference, that you kick yourself.

54:31If you went, oh, I had choice of the orange pill or the blue pill, and I took the blue pill and it's gone up, but I've made 99 % less than I would have if I'd taken the orange pill. Yeah. and we've never seen anything like this before. So this is super unusual. People can't get their heads around this. And you're talking about NASDAQ here. We're not even talking about gold. I have a friend of mine, he runs a gold business, but he's actually pretty much all in crypto. And I'm like, bro, like, yeah, but you can own both. But like, why? Ah, because when things go to shit, gold holds better. And the problem is, it's the same as in investing in general, right?

55:14if you're 25 or 30 or 22 the best thing you can do is to take an excel spreadsheet and calculate a compound interest if i invest 500 bucks every month in s &p 500 we start with that if we're going to bitcoin because it is going to look too crazy right for normal people then you understand how exponentiality do we say that exponentiality works right The brain is not built to think in exponential terms. And so you're like, oh yeah, but look, I could have bought Bitcoin at 69K three years ago or two years, whatever, when it was. I'm flat. You know, they don't think exponentially. And so that's one of the big problems in normal investing.

55:59And then you apply that to crypto and people who don't even understand exponential growth for S &P 500, they will take you for a mad person. Because like, hey, look, just take Bitcoin, 130 % annualized after five, 10 years. Look at the result. And then they still want to do it. So they do it. And then they just fuck it up and they lose everything. Because it's just suddenly they become obsessed. It becomes my precious. It's like from the Lord of the Rings. It's like, oh my God, money, I can make money. And then it's like 100 % of years, not enough. I need to do more. And it's like, wow, come on, guys.

56:41It doesn't come that easily. Actually, I heard that a lot. I helped some people get into crypto last year. Just Bitcoin, ETH, and SOL. And they're like, oh, man, it's up only 3x. I'm like, what? What world do you live in? Exactly. I'm going to pour you another glass. Thank you. Actually, I was about to do the same. How is the wine? It's good. It feels like it could age a bit longer. But it's got a bored ape on the front. Hang wine. in 2014 it can last longer than this the other bottle is 2010 so

57:21so what we just discussed right now is essentially what you call the supermassive black hole right yeah crypto supermassive black hole yeah it's like it's I see everybody go down this journey and it's really funny to watch often people go into the space, buck it up, go, whoa, this is too crazy for me. They then absorb a bit. They come with a bit of humility. They come back to the space and slowly it becomes everything. I've seen all my macro friends do this. I've watched them all. My peer group, the people I grew up with in the industry, one by one, just go to the black hole and jump into the abyss and never come back.

58:09People like Alan Howard, legend of our space. We launched hedge funds at the same time. Alan was always a better trader than me and was famous as one of the greatest traders around. I mean, he's all crypto. Dan Tapiero, Dan Moorhead. Just one after the other, they get there and they never come back because the returns on a risk-adjusted basis are so ridiculous that they realize this is the, if there's one trade to dedicate your life to, this is the trade. This is the big one. The biggest trade mankind has ever been given. Now, that sounds hubristic, but it's proven. No other asset has ever done 22.5 million percent returns in 12 years.

59:05You said diversification is dead. It's all one fucking trend, which is the economy is stupid. This goes against what any wealth manager or banker would tell his and her clients. Why is concentrated risk-taking in the greatest macroeconomic trend of all time the best play, as long as you do it intelligently? So true wealth is made from a concentrated bet. That's Jeff Bezos. Elon Musk is actually, it's one concentration, which is one mission to Mars, but it's multiple businesses. Most true wealth is generated from one big bet. In markets, that's certainly the case. I don't know many people who run broad, diversified portfolios who end up becoming wealthy.

59:56Even Warren Buffett's portfolio is pretty concentrated. So concentrated bets really are the way, but that's very hard to do. Because, you know, you're trying to take the, you know, the big bet over the mortgage crisis and stuff like that. They're hard to take. But here, we've got a bet that has everything going for it. It is driven by behavioral economics. So I number go up means that more people come into the network, which means number go up. More the number go up, the more money's in this new digital economy that creates the applications layer, businesses being built on it. The more businesses being built on it, the more use of the blockchain, the more the number go up.

1:00:45The more the number go up, the more people come in. Before you know what the finance industry wants, it is a super massive black hole. of it's like the greatest behavioral scheme of all time. So it's genius for that. And it attracts people. Then you've got the debasement of currency. Then you've got the non-fit for purpose of the financial system that exists. Then you've got the fact that this is just digitizing value settlements and everything else, you know, all of contracts. So you've got a ludicrous amount of megatrends all in one point. It's liquid. it trades 24 7 it's accessible to almost every single human on the planet it's like come on guys this is the fucking big one there is nothing ever going to be bigger than this

1:01:37diversification is dead. and you walk the talk, you're all in crypto, but within crypto, you are pretty much all in one crypto, Solana. Because there is no diversification. Which is the absolute antithesis of diversification. Why did you go all in Solana last year? So if we apply that thesis that there is no diversification, everything's correlated, you want to own the best risk reward asset. If you go too far out the risk curve, you're early stage, you don't have network adoption effects yet. So then it becomes more VC bet as opposed to a growth bet. That's a different bet. So I have made a lot of money in the last cycle by switching from Bitcoin into ETH and got a lot of hatred for it in that bizarre world that is Bitcoin maxi.

1:02:32I had switched because I saw network effects of ETH were growing fast. It was NFTs that really ramped it up plus DeFi. And so an earlier token with less adoption that's gaining adoption goes up faster in price. That's just how it works. So I thought I was going to be all ETH this cycle. I had a bit of sauna and I had observed a couple of things. This space is about narratives first, primarily about the narrative. I was at an event, just the start of the bear market, March 2022, at some very fancy ski resort in Utah by a boutique investment bank. and the room was just billionaires plus the heads of every media company.

1:03:28You know, it was just an incredible group of people. And I was hosting the Web3 sessions and it was myself, Beeple, Elon Musk's brother Kimball, Adam who runs Instagram, Natalie who ran Yuga Labs at the time. Totally. I didn't know him for shit. I owned some salon. I didn't really know who he was. I didn't know anything really, right? Because he's a nice guy, but he's not the character, right?

1:04:02But, and I can't name the people, but some very well-known people, very well-known, had come up to me and said, what's with these Solano people? I've been talking to them. And I was like, wow, okay, these are big music industry people. These were Instagram, the head of Instagram. There's all of these people. I'm like, this kind of weird Russian guy knows all of these people. And so I just realized that they understood that their tech was great to be the consumer or retail chain. Even their logo, the name, everything about it smelt of mass adoption. But it was a bear market. So I walked away. I always process these things after I've seen them.

1:04:48So I was on my flight home. I'm like, something weird was going on there. So I marked it down and like, yeah, there's something Solana. So Solana collapsed over the next three months. And so I started buying in June when ETH bottomed. I bought ETH based on liquidity analysis. I bought ETH in June, July 2022 and Solana. I was too early in Solana, got the ETH low, you know, very, very close. and then I kind of left those positions and just continued to run them, and they all bounced, and everything was great. And ETH didn't bounce. I mean, Solana had the next leg lower. ETH didn't confirm it, which was really interesting to me as well, and I just kept adding in Solana.

1:05:37But I was still kind of like 30 % Solana, 70 % ETH at that point, and it was not until I had been then watching the chart of the Solana ETH cross in the same way I do the NASDAQ Bitcoin charts. It's like, what's the relative bet? And it was basing. And I'm like, you know, this could break out. And I've got a thesis. This is the retail chain. And then I was in New York at Mainnet and Colleen Sullivan from Brevin Howard, who's somebody I really respect, was on stage talking and she just dropped. Yeah, and obviously Firedance, which is going to be a game changer on Solana, blah, blah, blah. I'm like, I don't know what she's talking about.

1:06:23Next up was Toli. So Anatoly comes up, starts talking, and then drops a bomb, which was like, yeah, well, Jump think they've got this thing to be running at between 600 ,000 and 1.2 million TPS. And I didn't process it at the time. I was on the flight home. like 1.2 million TPS. That's 20X Solana's theoretical TPS of 160 ,000. I'm like, okay, this is a step change. And that weekend, I was writing Global Macro Investor over in Little Cayman. I looked at the chart, just started breaking out. I went on Twitter and said, who knows about Fired Answer? Silence. I asked totally publicly I said when's this out he goes I think it'll be out on testnet by the end of the year so it was a public not on wasn't something I I knew no secret information I'm like that was it I did the switch I didn't have my ledger that device over that weekend Julian bloody Battelle did and he was doing his switch before I and it moved like crazy over that weekend and I got back home to my house and Gran came in on Monday and just literally switched everything so at the 0.0 one sold ETH, right?

1:07:43Which was very similar to what you did in 2020 with ETH DC. The same playbook. I basically copied you on both, to be honest. I copied you on both. And there will be soon, if you remember the last cycle, it was Luna, Avalanche, Polygon, and Solana. Those were the chosen four. One didn't survive, and one was king or crown prince let's call it something will happen this cycle that will give us that bet again that bet's incredibly rewarding but hard to do because there's a lot of things that look like they're going to last and they don't i have my thoughts on that but we're going to discuss that later because obviously i have to talk about that right but essentially the framework because the the kind of bigger picture bigger learning here is what you've done with e-thing 2020, 2021, and what you've done with Solana 2023, 2024, anyone could have done.

1:08:46Yes. And that's - No inside information, no special knowledge, no technical knowledge, no nothing. And in my very humble opinion, that's the way to make money in crypto, which is, we're not VCs, right? We don't have like maybe a very technical understanding. Exactly. we understand that most of these shit coins are pure gambling so what's the real game here it's probably to find the e4 flash cycle second largest coin by market cap okay covid crash went down to 80 or 90 but then it did like a 50x liquid for the second largest coin which is like an absolutely amazing risk adjusted bet right for that anyone could have taken and we get given this bet every cycle absolutely you get a 10 to 50x every cycle from buying one of the biggest coins yeah the hard thing is people get stuck in a narrative there are people stuck in and i you know i'm gonna get hated for this but people are stuck in kadana people are stuck in xrp they're stuck in stuff from the past doesn't mean they're bad projects but if your game is to make the most money, then you have to drop all of your allegiances from the previous cycle.

1:10:08All of the things that you had taught yourself to believe, like ETH is the only thing. That was what you had to believe last cycle. And now you have to believe that Solana is the fastest, cheapest, best. And that narrative will get shattered next cycle. And you have to accept that. That's okay. It's very hard to do. It's really hard. Yeah. Yeah. Regarding Solana, I mean, you said you have people who thank you every day, right? So there's a thank you from me because you were one of the three reasons. I switched 80 % of my portfolio at$17 to$20 last year in Solana. The first one was Chris Berniski.

1:10:47Yeah. Who was very bullish. When I was always saying before FTX happened, I was like, Solana, I'm probably going to put like a good amount of money between 10 and 15 if it goes down there and then if this happens it goes lower than 10 i'm like it's fucked even i can't do this it's fucked right so i'm like oh and then people calling for one or you know like i'm like oh man i should do it now but i can't like it's the the thing i have to accept that the thing is probably fucked right then it's not kind of like goes sideways between whatever 15 and 25 or 10 and 20 it was the vitalik statement actually Exactly.

1:11:22Vitalik. Yeah. That was really key. He's like, he's basically said, before you drive this thing down to zero, this is a real project with really skilled people and a vibrant community. That Chris, myself, there weren't many others who at the time were saying, you know what? This is maybe the biggest gift we've been given. Yeah. for me it was chris i'm like okay this dude is saying this thing is not dead and he's like super bullish and he's super smart because i was listening to him since years because of kathy wood and everything yeah then i met akshay who you met last night right who is basically working for solana and he was previous uber uh built uber in india right arm of balaji is doing the network state conference with balaji yeah like he's very close to balaji very close to nasdaily I'm like, this guy's working full-time for Solana.

1:12:20I met him. I talked to him. I'm like, this guy's super smart. Chris is super bullish. This guy is on the field who are mega smart. We're all in Solana. And then there's Raul with his Sol ETH 0.01, which is the same as freaking ETH BTC 3, 4 years ago. No brainer. I need to do it, right? And so you're definitely part of it. So thank you. Basically. Exactly. It's weird because I look back and I sort of can't remember getting that call so right. But I know because everyone knows me for that call. But it's weird because it was, I was so hated at the time. I was really fighting just because the market was so awful.

1:13:05People were so awful. And to stand up again and make another prediction was hard. yeah absolutely and also like uh in september october last year i had geordie alexander co-founder of selenium capital good friend of mine now uh he was very right about luna yeah super right and i remember he got kind of known for being one of the few ones who were basically saying out loud luna i think it was on bankless before luna crashed not saying luna is shit just saying hey this might happen be careful so he was very right about luna which i I got massively wrecked in, right? And then he's last September, October on the podcast in your seat.

1:13:48And I'm like, I knew he didn't like Solana. Or at least he was not very bullish on Solana. He said, the ecosystem is great, but the token is kind of like a meme coin because there's no fees, the fees are too low, et cetera. So it's not accruing. So I'm there, just switch like a couple of, two, three months before, like I switched 80 % of my portfolio in Solana. I have this guy in front of me. I'm like, what do you think about Solana? And I knew we would clip that and people would go, would be angry, right? Against him, the Solana community. So I'm like, what do you think? And he's like, yeah, you know, like I think this is a great ecosystem, great tech, but the token doesn't really make sense.

1:14:25And I'm there, like I didn't, I know the guy was massively right about Luna where I got so fucked. And then I have like 80 % of my portfolio on Solana. I'm like, okay, Chris, Raul, actually, Chris, Raul. Like I didn't do anything and like then, I mean, sometimes it's very hard because you always have some very smart people with different opinions, right? And you need to take them on board. Yeah. You know, it's hard when you have full conviction on the trade. Yeah. Your job is to be paranoid after that. Yeah. That's good, actually. That's a good learning from, I mean, I'd say from Luna, definitely.

1:15:04It's anytime there's someone who says something really bad about your bag, take them seriously. try to understand why it doesn't mean change your mind but it means like take into account the fact that your work it all leads to you taking the bet you've now taken the bet you don't need to confirm to yourself all the time that I'm so right I'm so right you need to confirm that you're not wrong it's a very different mindset what could make you change your mind on soul this cycle

1:15:44The only thing I think is if ETH continues to outperform, or not continues, it hasn't done so, but let's say it does. ETF flows. There's a new application that yet again ratchets up ETH's use case. maybe it's the real world assets trade, whatever it is. Other than that, everything goes up. Solana's earlier stage, it should go up more. It's a standard risk cycle. There's limited risk in Solana now. There's much more risk when you go to earlier stage tokens because you just don't know if they're going to get adoption. So it's really, have I got my money in the wrong bed? I mean, what happens if Bitcoin beats everybody this cycle?

1:16:34It's possible. Of course it's possible. My job is to be paranoid of I've got the wrong asset allocation. You said before, if you are 30 years old, you should keep your money in crypto and add in the weak moments, right? And actually, you're not 30 years old, but that's kind of your plan, right? Yeah. what does that mean concretely if you're mostly in sol do you de-risk into eth or bitcoin as we transition into macro fall season in 2025 or you just say like you've done last cycle the bet was i keep my eth and let next cycle i will have seen the two or three token solunavax that went crazy and i'll switch into that um that's what i did was that the right answer probably would have done marginally better if I switch into Bitcoin.

1:17:32In the end, I don't think it matters. Just don't leave the space. If you do, do it for lifestyle. What's really hard, what I've learned is I've gone through this before because I've been involved in this space for a very long time. I've held through cycles. I've traded cycles. and I figured out if I just held my original bet, which was much smaller, I would have been five times better off. If I'd have just added every time we had a bear market and assumed I missed the bear market low by 30 or 40%, I'd make 25 times as much money. So this time around, I added furiously between June and October, those two dates in 2022.

1:18:19and I was at all-time highs in my P &L well before markets were. That's what it means when you compound. And just do that one thing and it'll change your life. But most people can't. They've been taught that the drawdown is a terrible thing. But if you're not going to take the money out and you don't need it for school fees or the house, don't take the money out. The other thing is, let's say you've turned your 10 grand and it's now worth 250 grand. Okay. When you take it out, let's say you're a genius, you get the high. The market falls 90%. You will not put the same amount of money back because you're now, you have that mindset that you had with Solana.

1:19:07It's now, fuck it, it might go to zero, right? That is so pervasive that you will only put a smaller bet in. You can't do it. and people think they can oh i'll just take my 250 grand and i'll just buy it at the bottom and i'm going to be the richest person in the world no no no won't happen that way i mean the assumption here obviously is people have a daily job that provides them with enough money to survive or they have a business this crypto thing didn't become their entire life or way to dream to make it in the short term which is actually the case for a lot of people right a lot of people i think more than we probably want to admit.

1:19:49This thing becomes their life, right? And they might even quit their job. Like this kind of classic moment where you start to say, maybe it's starting to become a bit risky is when people say, I left my job to trade crypto. Actually, two weeks ago, I met a woman and she said, oh, my husband. Now he left his DevOps engineering job to trade Sol full-time. I'm like, okay, maybe it's still early, but like i'm just gonna this is a little marker exactly like because more and more of this is gonna happen right and that's when people start to make the wrong decisions and uh whereas and fuck this up because they're too they're too involved too too all in and don't realize i need to have something to cover my life expense if i want to have this 10 your view and compound but i've seen the power of this thing my sister-in-law she had a 401k and it was in 2020 she's like what do i do with this doesn't go anywhere and i'm like just put it all in crypto she did and now suddenly she's got a really quite decent sum of money for her.

1:21:04I mean, you know, several times her annual salary. Now in this, that's amazing. I was speaking to somebody who used to work at Real Vision and she just dropped in, you know, how, how much money her and her husband had made. I mean, he was a science teacher and they were, they had made really quite a lot of money, you know, in ordinary person terms. And I'm like, you can understand why people become obsessed because it belittles everything you've ever done beforehand, all the work you've ever done. And then you start thinking about all of how much work can I do to put money into this bet? Because it's the best bet of all time.

1:21:50It's probably what happened also to this gentleman you met yesterday evening who thanked you. Now, I don't know whether that's a sign of hubris that he's kind of semi-retired. He didn't say, I was going to trade crypto. My guess is he paid off his house and he could do whatever he wants to do. Maybe he could be a private tutor, whatever it was, but he didn't have to do his job. That's really enabling. But I never forget, I was on holiday in 2000, and I was in, I can't remember, somewhere in the Caribbean. And I met this guy at the airport, and we were taking a bus to the hotel. And I'm like, what do you do?

1:22:27and he was like, he was a AT &T cable fitter, something like that, you know, when they were laying broadband. And he's like, yeah, but really what I do is I day trade stocks. And he goes, I've just put in my 50 grand kitchen. That back in 2000, 50 grand kitchen was an expensive kitchen. You know, that's probably like 150 grand kitchen. I'm like, really? He's like, yeah, I make all my money doing that. And then I started to realize, okay, this is now insane. where the guy fitting cables is trading. And it's going to happen again. Of course it will. And again. Of course it will. Again. And again.

1:23:06In financial markets, just like in life, everything is a cycle. We talked about liquidity cycles before. Cycles apply to crypto too. I had Meow, the founder of Jupiter, on this podcast a few weeks ago, and he said - I think I'm meeting him tomorrow, actually. Exactly, yeah. Tomorrow morning, 7 a.m. Well, you know this already. You're stalking me. Because I'm going to be there. Oh, yeah. I'm going to be there. He said, fuck the super cycle thesis is the most toxic shit in the space. In late 2021, we had the Fed increasing rates and then the subsequent blowups of Luna, Celsius, BlockFi, FTX, and many other actors in the space.

1:23:48What do you think is likely to create the top in this current cycle? It's always the same thing. and where do you think the subsequent blowups will come from? It is always the same thing. It's the liquidity cycle, stupid. When the Fed start taking liquidity, or the ECB, or the Chinese, or the Japanese, that's when you've got to get out of the water, if you want to. Or you just accept it's all going to go down, you'd start saving as much cash as possible to buy that dip. So it's always the same thing. What Meow says there was the Fed kind of came in earlier in the cycle than we thought. And that's what truncated the cycle.

1:24:34So I just think it's liquidity stupid. The moment they say, hey, we want to take some drinks away from the party, get out of the party.

1:24:47Where is the blow up happening in the space? That's a question I think about a lot. and when I say these things now, they're not because I think they're going to happen. I'm saying them because I acknowledge them to be risks. I look at the restaking yields, the Athena and the EtherFi and all of these.

1:25:17Most people say, yeah, but it's in the smart contract. It's fine. I'm like, I always worry about where the yield comes from. Who is facilitating that yield? And why will they blow up? So almost at every point, things blow up because there's one borrower who's too big. Long-term capital management. Three arrows capital, right? And you don't know. everybody's so busy borrowing from them that they don't realize that it's all one customer so there's that and we don't know who that is going to be the one weak point that i look at the market because i think people just kind of understand this somebody in the restaking liquid staking cycle will blow up right lido's concerns me I know, generally speaking, it's pretty safe.

1:26:23But pretty safe is not good enough, considering it's got 20 % of all ETH, right? So that would be, I would be paranoid about that. Even though it might be the best run business, it's got diversification of validators, everything. The one that scares the shit out of me, that I absolutely love, is Deribit. Why? It's 90 % of the entire option market. The concentration of options in that Panamanian exchange, right? They're good people. They don't run a bad business. But if somebody somewhere blows up and that exchange's insurance fund and all the other stuff somehow fails, we've got a fuck ton of a mess.

1:27:19everybody lays off their risk there. And this is not the Chicago border trade. Is it the reason why you're not buying call options on Solana or one of the reasons? No. The reason I'm not buying call options on Solana is because if I buy out-of-the-money calls and they end up out of the money, I'll have lost money. and if I just stick it in Solana, I won't lose money. Yeah. You know, it's like... So simple. It's so simple. It's a learning from 2021. And at the end of the cycle, I might well switch all my Solana for call options. And then you can only lose the premium. But at this point in the cycle, I know somebody will nail it with call options and make 10 times as much money as I've made out of the trade.

1:28:11I just don't want to lose my soul because it matters. it's super interesting the part about dairy bit because that's what we need right we need people who think because the more we print money out of thin air in crypto like this crazy pnl the more we forget about all this stuff right so when you speak to the athena people we're actually releasing a guy from athena this week i spoke to a guy the other day yeah great guy super smart financial markets. I had this conversation with him. I'm like, your job is to be absolutely paranoid because people are getting the yield from the options premiums. Yeah.

1:28:54And it's, again, it's not going to be Dina's fault or Etherfi's fault or whoever's fault. There'll be connections we didn't see. That's always the case. And then before you know it, it's bringing down something bigger than you ever imagined. And it will happen somewhere. It will happen. It will happen. Because every time you build leverage on a 70 % volatility asset, you'll blow up all of the leverage. And what's annoying is people don't learn this. The builders don't learn this. And they're going to blow up retail again. And people are going to say, see, this space cannot be controlled because they're making a fundamental mistake of trying to build leverage on a 70 vol asset.

1:29:41And also, if you think about the essence of a bull market, I mean, these cycles, it's that. A bull market is some people becoming optimistic more and more, people taking on more and more leverage. Businesses taking on more and more leverage, everything going ballistic. And at some point, there is too much leverage in the system. And then we have a deleveraging event, right? And it's happening all the time. And it's going to happen again. It's that. And you try and warn people. You try to talk to people. I try and advise these people when I speak to them. I've seen this shit for 35 years. It always works the same way.

1:30:16I beg them. I beg people not to get involved. They won't listen. Yeah. Learning by doing, learning by getting wrecked. At the end of the day, that's what happens. If you don't have previous track fly experience, it's going to happen to you. Yeah. it will I know don't fuck this up don't fuck this up but everybody is trying their best to fuck it up yeah and they don't realize it but the industry is also built in a way for people to fuck it up again I would say airdrops points leverage it's just like a gamification of everything for people to but also the capsule cycle is so fast so brutal that we clean up messes very fast and we move on So there is an ability to fail fast, even fail big, and the space learns every time and moves forward.

1:31:17It still makes mistakes, but it adapts and learns every time. So it's pretty clever in how fast the capital cycle is. But as an individual, your job is, you still need to have some chips to play the game, right? If you get completely wrecked, you're out of the game and you can never come back. And you're going to hate this industry and you're going to miss out on this amazing... So you see it with Coinbase accounts. So Coinbase had a peak 109 million accounts. There were at the bottom 9 million actives. So it's 90 % drop in active users. I don't know where it is now. I'm guessing it's about 12 million.

1:32:02So you can see the rect ratio. Those people will come back. And once we start to see more than 50 % active accounts, then we need to worry again that we've got too many people into the space. The overall number of accounts will increase, but it's the active account. Yeah, people talk about the Coinbase app. I was about to ask right now. It can't happen because 110 million people have already downloaded it. Yeah. So it's going to be the number of active accounts. That's, I think, the real measure here. what's your biggest learnings and lessons from the 2020-21 crypto cycle?

1:32:50I still didn't realize, even though I was pretty much all in, I still hadn't realized how powerful this thing was going to be.

1:33:06Even though I've talked about this being the largest macro trend since 2013, the longer I spend looking at it, the more I learn. The whole everything code thesis didn't come until 2022, 23, 23, March 2023. the whole debasement thing only came in 20 end of 2021 so i realized how little i know when i still know a reasonable amount i mean i've been around this space for a very long time and the more i the more i learn um i've also learned well i knew this was going to be the case anyway i didn't learn it but the publicness of me

1:33:58is a really difficult thing. I have a part on that actually.

1:34:11There are lots of upsides to have a strong personal brand and being famous but it also comes with a fair share of downside. One of them is FUD, fear, uncertainty, and doubts. When you're wrong or worse, when some elements are taken out of context because FUD creates a lot of attention and for the FUDers and the online world, it's all about competing for attention, right? So some guys call you rug pal online. You're not thinking about it. It's good because of your ETH price targets last cycle. There was also, we talked about that before. There was also the Luna mess that you weren't directly exposed to, but that's your ex-business partner, Remy, was on this podcast a couple of years ago, got hurt pretty badly.

1:35:00And as I said, for the record, I had Dokun on the podcast. I was a big Luna bull and I got massively wrecked on Luna. So the question is obviously not about being right or wrong, because we all will be wrong sometimes. My question is about FUD. fear uncertainty and doubts how do you deal with fud whether it's justified or not when you built a massive influence in crypto and in your investing space i didn't intend to i i just didn't go out of my way to create this i didn't want to do this but i just found that just happened to be one of the clearest communicators Maybe it's the English accent. I don't know what it is.

1:35:49And so it just happened. And it happened over time. You know, if you look at my Twitter following over time, it grew over time. When I sold out of Bitcoin in 2017, I got a lot of hatred. I went back and checked some of the tweets from that period. I mean, there were some real angry people. And I wasn't that much of an influence then, but Twitter was smaller then. And I never expected this or wanted this, but it's where I find myself. And so I try and explain to people I'm not a guru, that I am fallible. But at the heart of 2023, 22 and 23, there was some people who were truly awful, particularly some people from the macro world.

1:36:44some of them have subsequently blown up. I don't ever call these people out. I don't ever say anything. I just kind of absorb it and try and distance myself from it. So when it gets really bad, I'm not in there fighting because that gives them the one thing they want, attention. So I refuse to give them attention. but yeah 2020 early 2023 was just it was awful awful um how do you deal with that concretely every day right for example meow from jupiter they launched jupiter i don't remember two three months ago 10 plus billion valuation massive thud it got destroyed completely um and we talked about that he gave like a kind of like three things he's doing but one of them was like man you just go to sleep like concretely when there's this massive the first thing i do i go to sleep what what do what did you do i go to sleep easily but i wake up at 3 a.m and then you're alone with your own horrors um i learned with the horrors the best thing to do is realize that your most irrational self is the three o 'clock in the morning self.

1:38:08So I go and write it down, go and have a cup of chamomile tea or something, try and calm down, write it down, get out of your head the crazy thoughts. You can go back to bed. You generally can get back to sleep. But December, no, January, my wife was climbing mountains. I was on my own and I was stressed out in my brains and I was being attacked and everything else. a friend of mine who lived in spain uh did yoga with her every morning and i was cancelling all my yoga classes and i do it over zoom she's like what's going on i'm like oh just it's a shit show she's like right i'm gonna get on a plane tomorrow and i'm gonna sort your life out forced me to do yoga every day every morning um you know kind of massage stuff different stuff she's you know and two weeks of just getting back on that got me back on track um so it's it's going back to some sort of routine even though it's the hardest bloody thing or going to nature is the way that you can get away from it because you realize that that's just all electronic noise of those weird people on that small little screen screaming and shouting at you um also just going out meeting people helps you know particularly when you've got real hatred from some just terrible people online and then you go to others and they're like oh no you've really helped me i'm like so i'm not the worst person in the world and taking you on this terrible journey and you're all wrecked and you're all they're like find me those people it's like find me the actual people who didn't understand that you brought calls on ETH.

1:39:51And when you find out who they are, and people have even shown me the kind of, the circles of who these people were, they weren't even involved in my world. There were people looking for somebody to bring the fad on. Did you try any Ayurvedic thing or TCM or other things? because you said like there's this woman who like is into yoga, she probably brought some, hey, you can do some Reiki or some acupuncture. Yeah, I did all of that kind of stuff. Meditation, walking is what really works for me. Walking a beach in bare feet. It's a bare feet thing on the beach. Yeah, it's a huge thing. And doing that every day, every morning, or walk in the park, whatever, it doesn't matter.

1:40:44those things Ashwagandha which is Indian which is super helpful for sleep for me that was a game changer for me

1:40:56on the flip side drink too much wine in the evening to try and switch by that's an interesting one but the problem is it wakes me up so I go to sleep then it wakes me up because the wine is we're drinking wine here yeah we all love like a good uh red wine you love wine but there is a thin line between hey i'm doing that because i enjoy it or hey i'm doing that because it makes me forget things right at the end of the day right yeah which you can very easily fall into because it feels good well if you think of the end of the day you're kind of spiky you have a couple glasses of wine and like you're kind of softened.

1:41:46And as you say, you know, you see other people go down that slope where it's, if you're not careful, it becomes an issue. But yeah, but you know, it is a great thing. What self-polices me is if I drink too much, I wake up in the middle of the night. So, and that's even worse. So it's a fine balance.

1:42:13you understand the leverage of media for your company since 2014, but you also understand the personal branding game since a long time. And you even, you know, despite all this kind of thought that happened and you feeling really bad early 2023, you decided to double down on this everything code thesis and on the personal branding journey with the YouTube channel called the Raul Pal, the journey man, like much more active on Instagram everywhere. Right. It's not only a Twitter thing. It's an everything thing. Right. Why do you focus so much on personal brand? It wasn't a choice. It was a real vision member.

1:42:58It was a global macro investor subscriber. Who came to see me in the Cayman Islands. he happened to be just a small amount yeah yeah it's strong wine

1:43:18he happened to be from Silicon Valley I don't want to dox him one of the biggest firms running innovation and growth amazing guy so I'm like come to one of our board meetings just come and talk to us so anyway he dropped The thing I didn't expect, I expect him to talk about AI applications and other stuff and where to go to the platform. He's like, listen, your problem is top of funnel. The top of funnel is you. The sooner you realize that, the better it is. I'm like, really? He's like, yes. I said, well, what does that mean? He goes, you need to start your own YouTube channel. Part of Real Vision, but people want to find you.

1:44:02and we fought for two hours over dinner over it i'm like no i don't want to do this he's like well for the sake of real vision for the sake of the people you're trying to help it's the best way so i just did it so and then i realized i had to do it and it's it's what's hard is where does real vision finish and where do i begin i don't like that pollution it's not like I own 100 % of Real Vision, but it's what it is. But that's the 2024 world that we live in, right? People follow thought leaders. Yeah. And then you have a business in the back, in the back end to kind of capitalize on the personal brand and everything, right?

1:44:44But we can, can a business be massively successful today without one of the leaders or the leaders building a big personal brand? Yes. If the product is essential. For example? I mean, who are the people who built Slack? I don't know. I don't really care. It's a product that we all use at work or whatever it may be, right? So it's not necessarily about founders, but it helps because every company is a media company And attention is everything. It is upstream of every single thing. Attention is what creates religions and governments and humans and love and everything. So attention is upstream of everything.

1:45:41And in this day and age, the largest attention capture on earth is YouTube. Absolutely. Why YouTube versus Instagram or TikTok? people don't realize is Instagram and TikTok are fleeting moments of attention. On YouTube, I can go on Tom Bilio's podcast and get 3 million people to listen to everything. 3 million. And it's going to be there in five years. So there's going to be many more people who maybe don't know you yet, who can just get back to that later on. whereas on Instagram or Twitter they will never see the content you posted today in two years it's lost in the mix although AI is going to change some of that like I use Grok on Twitter it's actually pretty useful most people underuse it I just use it as my kind of Twitter search news search it's actually really good so that's how I found my tweets back in 2017 interesting it's super quick at doing that so yeah it's actually AI is going to help us sort out the world okay i'm always going down the feed like fuck man yeah i know okay go to grok okay okay sorts it out attention is everything yeah let's talk about the raw memes that are not so we talked about unfucking your future before we talked about the crypto supermassive black hole yeah there's two other raw memes that are not oh hold on i also i was the one who started pristine collateral.

1:47:17Yeah. The dollar wrecking bull. Buy bonds, wear diamonds. All of these that are now in common language, like dollar wrecking bull, common language. Pristine collateral. All the Bitcoin maxis use this. I came up with that in 2020. So before we go into a bunch of like the memes that are not, why are memes so important in today's world?

1:47:45Mimetics is just storytelling. Storytelling is everything. Humans tell each other stories. But what memes have done is that bell curve distribution. A meme, number go up. Money printer go burr. They're so magical. they're like one of these ai models that can compress down on your mobile phone but has all of the world's internet on it how but that's what a meme of that sort does it can tell you the answer it doesn't have to tell you that it's analyzed the entire internet or all of the analysis of all of crypto business cycle analysis the history of money the history of society everything that falls into this space that gets you to reach the conclusion, the number go up or money printer go burr.

1:48:39That's the power of a meme. If it's a true meme, particularly in this space, it is a shrunken file of an enormous amount of information that you don't need to see. It's like a zero-knowledge proof. You don't need to see what's behind it, but you know it's for real.

1:49:03So I have two additional Raul memes that I would like to talk about. The first one is written on your T-shirt. Don't fuck this up. Yeah.

1:49:16What does that mean?

1:49:21So I had learned from the last cycle that even if you're vaguely vague about how to navigate the space, people will A, get it wrong, fuck it up so badly, and then they'll blame me for it. There's a bit of self-preservation in this. So I'm like, okay, I'm going to make it a meme that is super fucking clear. I'm going to launch an NFT that you put in your Solana wallet that looks at you and says there's a little video file of me saying, don't fuck this up. And it's basically, don't use leverage, don't FOMO, self-custody, and keep most of your assets in the major tokens. Just simple rules of thumb that don't lose your crypto, don't lose your crypto, don't lose your crypto, don't lose your crypto.

1:50:23You know, if the mega trend is going from 2.5 trillion to 100 trillion, honestly, you betting on some random meme coin is not the best way to capture that trend. You might be able to get a bit of that right. Capture the fucking trend first. Then you can trade around it a bit. But if you do not capture that trend, you will have done the opposite of the message. If I keep telling people, and again this is this means a lot it's like this is the biggest opportunity don't come to me and tell me they made money and you didn't literally there are thousands of high quality people into this space trying to help none of us have all the answers don't expect us to be gurus but we are trying to help we want everybody to come with us it's also self-interested because The more people that come with us, the more people succeed, the more the space is valuable.

1:51:26So we're all incentivized. So we want people not to fail. And I don't want people to come to us and say, well, you guys got it all right. I've given you every tool. I've given you literally thousands of hours of video. I've shown you where I've got it wrong. I've shown you where I've got it right. Just be part of that trend. to two and a half trillion, a hundred trillion. Don't get thrown off. How do we get to a hundred trillion for the crypto asset class when the S &P 500 is 50 trillion today?

1:52:07So this is a unique asset class because it's money. It's the rails for money. It's probably the rails for the financial system, like equities should be tokenized, more efficient use of better technology, efficient capital. So that's equities, bonds, derivatives. What are derivatives? Particularly OTC derivatives, they're just unique contracts. Well, that's NFTs. Okay, so the financial system clear. Okay, well, the derivative market is 1.4 quadrillion. Now, it doesn't mean it's 1.4 quadrillion usage of the underlying token you'd need, but that's a lot of value and volume that's going to happen.

1:52:54So that's the real world asset side of the equation. Then there's the culture side. We talked about memes. Memes are valuable. What is the value of the culture of Disney? Disney is what,$100,$200 billion company? The value of Disney culturally, trillion,$2 trillion. It's gigantic. The value of pop stars, the value of all sorts of things, sports teams. We haven't known how to realize these. These are intangibles. So those kind of things. Then there's just the simple use cases for things like ticketing.

1:53:33Straightforward, all tickets should be NFTs, particularly hotel rooms, you know, plane tickets, all of that kind of stuff. people it's really interesting i watch a lot of people particularly the finance people who who get crypto they're like yeah real world assets that's the big thing i'm like yeah it's huge i get it add together all of the financial services companies in the western world all of them and add together all of the culture companies and for that that's google because of youtube and WhatsApp. That's Meta. X. You could add LVMH. You can add, you know, the Disneys, the media companies, the sports teams, the music, everything else.

1:54:25Dwarfs the finance industry. Kills it. Just the number of ads that are served on social media, which is just attention monetization. Hundreds of billions of dollars a day.

1:54:41and there is a lot of today's unrealized gross domestic product because you're saying in the attention economy that's right it's huge so it's not captured yet by any financial mean but even if it is it's not captured by you and i it goes to other people but a lot of this is not captured so we we've seen and again maybe a good example maybe a bad example we don't know I'm passing judgment but is he Iggy Azalea yeah is it her? building the mother yeah it's not her it's not her it's basically Caitlyn Jenner yeah then there is Iggy Iggy but what's the surname there's two different Azalea or Izalea yeah she's yeah that is tokenized culture hmm Does it last?

1:55:36We don't know. Does hers last? I don't know. But if Taylor Swift tokenized her economy, how big is that? Crazy. Her economy is so big, it moved the US economy when she was touring. It added to GDP measurably.

1:55:56Two things One is like a shout out anywhere else in Asia, which is pretty crazy and shows how forward thinking the goal is. Like, the other thing was a few years ago, you talked with Yatsu on your podcast, which I also had on the podcast a couple of weeks ago. And you talked about Universal Basic Equity. We talked about that, but you also talked about I have a blank. Social Tokens. Yes. What we're seeing now with these meme coins is kind of that, but not really what was expected, right? Do you think these kind of like meme coins, celebrity meme coins are

1:56:52a version of that? Yes. Or even might be that? This is the start. This is the experimentation. This is the Wild West. This is where people try stuff. Like we saw with NFTs last cycle. We don't know where these are going to lead to. All of these are going to come together in culture. And what we're seeing is pioneers, scammers, frontier people testing it. So I think it's real. We're not there yet. But I know that social tokens and having tokenized economies and being able to earn income in an AI world from participating in communities is the most human thing you can possibly do. you just mentioned nfts i think i saw a tweet yesterday from ansem was asking are nfts dead and then there was basically two choice that you could say no they're not they're coming back or something like meme coin super cycle or like everything's about meme coin right now right and actually the answers were interesting 55 or 60 were thinking meme coin so basically nfts are dead 40 45 thinking no they're coming back it's actually very bullish nft right because people are trying to not believe in them anymore you called nfts trophy assets what's a trophy asset and what does that mean for all the people who thinks who think that nfts are dead so firstly on the broad trend of nfts it was culture being tokenized creating communities right that was a test case for can we have an identity for a community that is unique to us 99 of those projects go to zero let's see what happens to bored apes or punks or a bunch of these things right pudgy penguins pudgy penguins yeah but let's see right it's interesting yeah what we can do with those nfts the cultural stuff and the trading speculation has now gone to memes will memes outperform NFTs this cycle for sure, because it's captured everybody's attention.

1:59:06Doesn't mean that they're going away. It just means they're going to morph into the next thing and we will see. But what I realized, again, it's these moments I'm really lucky. I get to meet people. I get invited to stuff and I learned something I didn't think I was going to learn. So I got invited to a private event at Beeple Studio in January. I'd always owned NFTs, but I hadn't really gone all in. And I was at Beeple Studio and I was presenting why NFTs are macro. Because there's a bunch of artists who are feeling shit about themselves because the NFT price is down. I then showed them the prices versus fine wines, Rolex watches, the business cycle, all of this.

1:59:58And they're like, oh, it's not me being a moron. It's actually part of a cycle. And I'm like, yeah, and here's the Bitcoin. ETH Cross should start outperforming at some point this year. Everything will be fine. Don't worry. Just keep doing what you do. And they were very thankful for me explaining this because they weren't sure. But I was there observing them and the people there. There was only 30 people or so. And there was Sotheby's and Christie's and MoMA and just like the players of the art industry. And I can see that these people were the chosen ones. And I could also see, because I'd seen this previously, is that the space is incredibly small.

2:00:47Everybody knows everybody. And it's magic. your one degree of separation from a cultural movement of a quantum size during the largest, fastest generation of wealth in all history.

2:01:07And they're literally in front of you. You speak to them on Twitter every day. They're looking for your validation. I'm like, wow, this is like being around Warhol's factory. this is like being in england in the early 2000 late 90s early 2000 where every music band and damien hurst and tracy emin and dance music everything was happening came from england it's like i realized it and then i just stilled it all down and i'm like okay what are the what matters here there's like the generative artists and there's the cultural artists and these guys hadn't really organized themselves in this way. And I'm like, okay.

2:01:52So I'm speaking to Beeple, Mike Winkleman, and he always talks about X-Copy and how X-Copy got him into the space. I'm like, okay, so X-Copy is the OG. Speak to everybody, X-Copy is the OG, the unknown guy from London. And Beeple became the famous one. So you've got the most culturally relevant artist in the world, X-Copy, and Beeple, all their prices had collapsed and then there's the generative artists which are more for art history you know how ai in works with art fidenzas and ringers and stuff like that i'm just like i love cultural movements culture and money and revolution when they come together are valuable there's two main points here the first one is it's a cycle and you compare it to a luxury wines and rolexes or patecs yeah meaning it comes later in the cycle correct it's going to be performing well which is why all these artists are like oh thank god we're not we're in pain but it's going to be okay normally it takes the eth economy to be a new all-time highs like same with fine wines and all of that people need to have excess money yeah excess money you put them into trophy assets the other thing is and it's so right Like when you said you're one degree of connection, like I've been thinking like that every freaking day since the last year.

2:03:19Because even me, a nobody, I'm doing this podcast. I mean, now the network is great and everything, but I'm like, for example, Pudgy Penguin. I know you own a Bored Ape and a Krippopunk, right? And a rent guy and an MFer and a bunch of culturally relevant stuff. So last year I have Luca Nets on the podcast. Pudgy Penguin is for ETH. and he's there and he's like telling me oh we have I mean now it's 20 billion views on Giphy and we're building this business we're selling all these toys and all these plushies and then we're doing all these things and I'm like think about that exactly I have this guy in front of me Pudgy was the the the the NFT was for ETH I think I'm like mega bullish on the dude and I'm like Kevin take a step back.

2:04:11If you don't go home now and buy some pudgy penguins, you had the guy in front of you. It's not even a degree of foundation, he's in front of you. And then I'm thinking, all the other people I had on the podcast, big people who are based here, they all have pudgy penguins profile pictures or something like, sometimes it's just so in front of you that you don't even see it. Right. And that's the crazy chance that we have in this industry, which is we have access whether it's someone who is already big like you or is someone who is much smaller like me if you're trying to do something good you have access to the people who are building this thing right and they're in front of you and they're telling you everything and it's your choice to make not only listen but to take action on it and it's so underrated it's crazy it's crazy it's crazy and this will not persist this is magic it won't happen in 10 years time Everyone will have made too much money, will be too important, be too diversified, there'll be too many people.

2:05:12I can't express the magic of this moment in time. It's like, why do people love the music of the 70s? Because in the same year, you'll have seen the Stones, Led Zeppelin, Fleetwood Mac, the Eagles, blah, blah, all tour at the same time. This is what we've got going on. And it won't happen again. And it's part of the, you know, just don't fuck up this. It's all in front of you. And people remember these times for the rest of their lives. They honestly will. And they will want mementos from that. I have on my bathroom wall my program from Live Aid. I was at Live Aid in 1985. probably the single most important concert in history.

2:06:06I was there. That program is priceless for me. The X copies, the Beeples, they're going to be priceless to people. You know, Beeple, every fucking day, finishes the day with the internet comments of the day. that's how you need to see him. We're in Asia, so you get it first thing in the morning. Like I saw the one last night and it was like, I think it was called Big Balls. Yeah, it's a cat with the balls. I just saw it before. Roaring Kitty. Exactly. He's got a headband on with a massive pair of balls and a bunch of rats in front. And he does that every single day. He ties the bow on the internet for the day and says, good night, everyone.

2:06:59This is the internet for the day. That's legendary. And he's there every day. You can chat to him on Twitter. He's the nicest guy in the world. And you can just send a comment and he'll reply to you if he's not too busy. It's crazy. But sometimes it's really hard because we're so not used to that, right? Just thinking like, we're thinking these people are kind of out of reach and everything, but this is really where, we were talking about that before. It's not crypto going mainstream, is mainstream coming into crypto. And crypto is that space where if you have a platform, that's where you build some social proof, these celebrities or people will come to you or you'll have a chance to talk to them or have them on your podcast or whatever just because you're in crypto.

2:07:46It couldn't happen nowhere else. I can't publicly talk about, but some of the people I have met that I got introduced to, I mean, the world's most famous people. Yeah, yeah. And they come saying, okay tell me about this there's one guy famous musician i have i set up a whole series of educational talks with over zoom i'm like okay i'm gonna get up to speed and his whole team up to speed and so it's very cool the last uh real meme that is not that i'd like to talk about is we have it on this table it's the banana it's the banana exactly we're about here this is the point we're about here so you not only started a meme but you actually became the meme right and you're embracing it what's the banana zone and why did you come up with the banana zone meme so julian pittella myself are writing global macro investor and we were looking at q4 2023 and we're like pre-election cycle years liquidity everything means that generally things should go bananas in Q4.

2:09:01So we wrote a article and we said, we called it the banana zone because things go bananas. Cut to, I don't know, by about March, June, March, April, maybe March, we had started applying it to say, okay, we've got, that was the banana zone for that quarter, but we've got the actual banana zone. which is when liquidity drives everything crazy. And then you start seeing those wonderful charts of Bitcoin each cycle. They kind of do this, they do this, and then they do this. It happens to be that. And it's when things go bananas and people fuck this up because they lose their minds. They FOMO into everything.

2:09:52It's when no laws apply anymore. The law of the banana rules all. and it always happens after the halving, which is kind of here. There's a bit of chopping around and as we start heading into the US election, between June and August, prices start going vertical. Doesn't mean we don't get these sharp corrections in the middle, but things go vertical and we will lose our minds. If we are having this conversation in nine months' time, we will be fighting with ourselves to try and maintain the discipline that we've been trying to teach ourselves because the banana zone will be happening. And it just caught everybody's attention because, A, it explains a lot, right?

2:10:39That explains my entire macro thesis that I spent two and a half hours explaining and I could have spent six hours explaining is all in that chart. It is also, he says, phallically, everybody's hopes and dreams. And it's about to happen. I fucking hope so. Because I will never be allowed on the internet again.

2:11:06Fair enough. You know, yeah, God forbid if I'm wrong. Oh, the horror. But I have told people to not take any leverage. But anyway. It's going to require a few additional bottles of wine if it doesn't happen. A lot more walking on the beach.

2:11:27Yeah, that is the issue. It's become everybody's hopes and dreams. That's why it caught on so fast. So you're king of memes now. Now that we understood why memes are so important, what's your view on coins attached to memes, or so-called meme coins?

2:11:51I flip around on this. I see the value. I don't have an issue with a meme having value. I kind of prefer NFTs for some of this. Because you can have distinct imagery around certain memes. I think it's a blunt tool for some of this. So I don't think the meme coin cycle will be as big next cycle. Very interesting. I do think that some memes survive and they can create value by getting enough attention that then people want to build on the network. So Bonk, they're trying to build on that network. Doge, there's always the fact that Elon will build on the network. Shiba Inu, they're building on the network.

2:12:39So if you value a network by the number of active users, this is how I broke it down to create Metcalfe's law to understand how to value crypto protocols or tokens. number of active users, value transacted. So you can have some tokens like Solana, lots of small transactions, but a lot of them. So the total value is high. Or Bitcoin, much less transactions, larger in volume. That and active, that's all you need to know in this space. That's what adoption looks like. Memes only have one side. So if retail leaves, it goes to zero. If retail stays, it maintains value. Doge, retail stayed. If you build on it, you have a potential chance of using that attention and moving it into something of more value.

2:13:29That's how I think about it. Now, you're right when you talk about social tokens. This is the experimentation in how to create tokenized economies. There's a lot in this. Before we talked about your ETH trade of last cycle and your SOUL trade of this cycle. Do you still have water? No. more.

2:13:55Thanks.

2:14:02So we talked about ETH trade of last cycle, SOL trade of this cycle, right? Which you both nailed. But you actually said, this one is the easy one. the hard one is to find the 2020-21 Solunavax or Matic, right? Polygon that you also call the next Sol, right?

2:14:27There is a reason why I didn't talk about that before but I talk about now when we talk about memes. What new projects have a shot at being these cycles 500 to 1000x? And so my question, because we're talking about meme Could this cycle Solunavax be a frog, Pepe, a dog, Wheef, and a cat, Popcat? And the reason why I'm saying that is I've heard you and many people talk about the new Layer 1s, Mona. We actually also had Keoni on this podcast or maybe some Layer 2s or, right? the problem is there have been a lot of conversations which make sense about the VC game which is this kind of a low float high FDV game right which prices out a lot of the upside for the retail so if a monad launches at I don't know 10 20 30 billion what's the upside on that that retail can have whereas my thinking obviously it's a very humble thinking is what are the ones that this cycle started at a low market cap and that gave a chance to everyone.

2:15:41And the last cycle, Solana was also, Solana, you could do 500X liquid, right? I think it was 50 cents for after, two months after the COVID March crash, 50 cents for some time. And then it went to$250, right? So instead, my thinking is, we're thinking about something similar, layer one, et cetera. But like there is a different game with the VC game. Well, no, that's the risk curve. some of those will absolutely wildly outperform everything. Why? Because they're further out the risk curve. That was Punks last time. There was a bunch of those that did stupid returns on top of ETH's returns, don't forget.

2:16:25I mean, I think Punks did 22 ,000 % returns on top of ETH's returns. This is la-la land. So that will happen again. What I'm talking about is what is going to be anointed in the blockchains, the serious blockchains. I'm still not sure about this whole FDV thing. I'm not sure it matters. I think anybody can grow out of a valuation if you've got adoption. If you haven't, you'll be crushed by it. The game is all about adoption. If one of these high FDV coins, I'm on the foundation of SUI. Scott, it's that high FDV problem.

2:17:27if they create traction. As Solana had a higher FDV than Ethereum beforehand, it's a function of where we are as you get more adoption. I just think we think about, well, where could a new layer one go? We think, well, ETH's here, SOL's here. this is the it's all wrong they're all going up 5 or 10x from here we're all wrong because we're thinking in linear terms so the next layer one will have a three four hundred billion dollar valuation maybe 500 billion there's plenty of money for everybody to have so 50x from 10 billion basically can still do yeah Yeah. And it'll probably still go down 95 % in the next bear market.

2:18:28But then out of those, we'll find from the ashes, who's going to be the phoenix.

2:18:35And I don't know who is going to be the anointed ones. We don't know. There's five, six, seven, eight out there that could be. I don't know. I have no idea. You talk about Xcopy and Beepo on the NFT side. What are your two or three favorite projects or teams in the space and why? And obviously I'm not asking for coins or price predictions, but more about some teams that you believe have a shot to actually have a massive impact on the adoption of crypto in the next few years.

2:19:16I don't know. VC's not my thing. I just wish everybody luck. Somebody will crack something big. I don't know. Everything always looks good to me, or all the things I don't understand tend to do really well. I don't do VC at all, because literally everything that looks amazing, to me, generally tends to be terrible projects, and everything that I think I don't understand, that makes no sense at all, tends to be really good. It's just not my thing. So when you ask me what teams, I don't know. I just hope, I just wish well for everybody. Just, you know, everyone's hustling, doing what they can do.

2:19:55And that's great. And I'm grateful for them. You mentioned your wife before.

2:20:03Do you have kids? No. Why?

2:20:12I value freedom. I mentioned it before. I can move country. I can travel. There's something that makes me shudder about suburban life. Maybe the friends I grew up with who I love dearly, just seeing how their lives never changed. I've moved countries and I've done this, I've done that. doesn't make me better than them. But I shudder when I think of suburban England, even country living in a nice country house in England, the life I was supposed to have, it honestly makes me feel sick. And so there's something about taking the kids to school in the morning and to the football game on the weekends and you go on your two-week holiday to XYZ and you do this and you do that.

2:21:04It's like, that's not me. It's not me. You mentioned the suburb life in England, but you could do the same in Cayman Island, I guess. Yeah. And Grand Cayman, I kept away from Grand Cayman for a while because it's more suburban. But it's still a tropical island. It still takes a slightly weird person to go and live in an island like that. So it is a bit suburban for me. It's not my ideal place. Little Cayman, very different. Little Cayman where I've got my other house is super wild, remote, weird.

2:21:38yeah I don't don't like Zimbabwe what's your biggest prediction for the next 12 months

2:21:55a picture is worth a thousand words I don't need I don't have to say anything else no need to say anything

2:22:08Raul thank you so much thank you for taking almost two hours and a half of your precious time for doing this and thank you for spending so much time educating all of us and putting so much invaluable content out there for free there's an entire generation that I am part of that can now see hope and take action to unfuck themselves and you're playing a huge part in this and we're all super grateful to you and your amazing event. Thank you. I really appreciate it. And I appreciate everything you're doing for this space as well. We're all trying our best to try and help as many people and also capture the opportunity for ourselves.

2:22:46Well done, you as well. Thank you.

2:22:55Okay, I hope you enjoyed that. It was quite a revealing interview. I really tried to give more of myself for Cross, how I think about the world, the things that matter to me, how I've been affected by things. I think it was an honest, truthful interview that hopefully you got a lot out of. And hopefully, we know that everybody's hopes and dreams are in the banana zone. And I don't take that lightly. And I know that I've been talking about it a lot. And while you're watching this, the crypto markets have been sideways and annoying. But zoom out, take time, and understand that over time, network adoption effects in technologies play out.

2:23:38And this technology has a huge adoption. Anyway, see you next time. Don't forget to sign up to the channel here on YouTube, or come across to Real Vision, realvision.com. It's free. It'll honestly change your life. It's set up to help you unfuck your future. Anyway, see you around next time.

2:24:23Thank you.