Iran War Weighs on Crypto

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0:45Hello again to another episode of Rec Vision. It is characteristically a bad Friday. we've had markets selling off as we speak Bitcoin hitting kind of the lows of the week right now as are most coins we have Farouk back on we had a great chat a week ago sorry, a month ago I obviously do a daily show also with Farouk so we speak all the time but great to have you on Farouk yeah, excited to get into stuff with you hell yeah, how you doing? fantastic it is weird because we literally do a weekly show we just got off Yeah, but now we are going straight into the weekly one. So I apologize if people who watch The Daily Show are probably going to hear a lot of these takes again.

1:31But we'll try and keep it different. It does feel like this is another week, although this is a crypto show, which has just been dominated by geopolitics, really. The Iran situation is kind of the main thing being spoken about at the moment. And that just hasn't really resolved. It was a situation which I think people maybe a week ago were hoping that could be a path to some form of a ceasefire. And since then, it's just kind of drifted away from that. And in fact, it feels like escalation from both sides with talks of troops potentially landing in Iran and Iran continuing to spread the strikes to various Gulf nations.

2:19the audience may not notice but you are Iranian well origin I would guess you weren't born in Iran but what is your take on all of this I know you follow it very very clearly you're monitoring the situation I definitely got my monitoring hat on I've monitored a little less in the last couple weeks because it got really exhausting like I got really over it for a moment but I'm pretty deep I mean it's all my algorithm feeds me anyways whether it's on Instagram or X I think you know similar to most Iranians. I like to think, you know, obviously very happy at the beginning. Like, okay, like, you know, they took out the Ayatollah, but now this war is stretching out.

2:56And so it's not the best thing happening for sure. I'm not too sure anymore what's going on, you know? I feel like we're in this weird phase where like, I think you and I were talking about it quickly, you know, in the chat, kind of texting back and forth about it. But, you know, on one hand, you have the propaganda in the West was like, oh, they're killing it. This war is going to be wrapped up very soon. You know, Iran's finished. You know, they got no more ships. It's in the air. They're being dominated, which is true. And then you have the Iranian propaganda on the other side. It's like, oh, no, we're surviving.

3:30We know we're shooting more missiles than ever, which is also true, right? They were shooting more missiles, I think, on day 19 than they were on day one of this war. And, of course, they've done a lot of damage. Like the Gulf countries were now also them probably getting quite tired of the war. I don't think anybody expected Iran to strike, you know, the UAE and Qatar, especially, and Saudi so much and so badly. So I don't know where we're at anymore, man, though. It's a, I think we're stuck in a weird situation. It feels like Trump needs this to stop, especially if he wants the market not to collapse.

4:02And if he wants to have, you know, any ounce of a chance at the midterms of November. But I don't know. We don't know who's leading in Iran. We don't know who the talks are with in Iran. I think nobody knows. So it's weird, right? Yeah. Yeah. I mean, they've said that the speaker is maybe the person that is being spoken to the most, but you just don't really know. It's clear that even within there, there is a government, there is a military leadership, and there is a spiritual leadership, let's say. And there's various different factions that could be speaking to different people at any one time.

4:42So yeah, it's been difficult there. And I agree. It feels as though the change from this week to last week is that Trump kind of played one of his classic escalation moves on Saturday. and it just seems somewhat hollow and it's perhaps emboldened Iran, I think, to knowing that a lot of these threats may not actually be credible given the situation in global markets. The US bond yields are going higher. US stocks are going lower. Crypto is going lower. These are all things which Trump is very cognizant of and is getting pressure from also from his allies around. So it's making, I think, negotiations painful from an economic standpoint.

5:33So Iran, I feel like I still think we get a deal in like a month, but that probability is definitely more closer to 50-50 now because if there are boots on the ground and some sort of invasion of something that would open up the Strait of Hormuz, maybe Carg Island or some of these other islands in and around the area, it feels like it would be a bit longer. So it's, and I think the markets feel that. The markets feel that right now. And we've had just not a great morning because I think people kind of know also when escalation happens, it normally happens on a Friday. It normally happens on a Friday night or a Saturday.

6:21We all have to hope that by Sunday night, it's reversed. I don't really know. I mean, speaking to some traders who I know, who are just like, you just can't hide from this market right now. It's a market where stocks are lower, crypto is lower, bonds are lower, metals are now lower. there hasn't really been anything in the dollar that you could have been in which which would have which would have protected you here and that's kind of painful because i think a lot particularly if you like log in and want to try and make money each day because i think a lot of people are long focused and that is uh yeah uh it's not been easy to make money during this period And crypto, I think, has been outperforming versus some of these other things, particularly last week, maybe slightly less so this week.

7:19But, yeah, even if you, a lot of crypto traders I know obviously moved into a ton of different things over the last few months. And even they are kind of coming back and being like, there's nowhere to hide here. No, there's nothing, I don't even know today what's, you know what I mean? it's like I don't know what to do at this stage it's like just wait maybe that's probably the best thing to do I mean if you're there to a four year cycle theory thesis then you know I was talking to a few people in New York they seem to think you know probably recovery front run to midterms and stuff like that probably around August line up October would be a bottom I think a lot of people talk about that so probably that would be good to talk about that's a good thing to we were going to discuss the show but like you were at the digital asset summit which is the summit put on by blockworks um in new york this week one of the when we were looking for like positive serious stories there seemed to be quite a few coming out of that that conference how did you what do you feel like the term was there well first of all you know these guys put on a great conference right uh that's so i unfortunately i wanted to go to the actual conference but i had so many meetings but i guess that speaks to how good it is right like i just like like I mean, he's outside of that.

8:36That's why I went. I got to interview the chair of the CFTC as well. I'm going to post that next week. And he actually opened on the first day. And then the chair of the SEC spoke there. I think that speaks volumes to the conference and the people in crypto. It's interesting because, I think you know this, but like cryptos become like suited up. You know, like that's why you don't know. And then you'll have like ICOBs too and like, yo, crypto is dead, CT is dead and stuff. It's like, I see the feeling. It's like the old school, you know, weird crypto thing is kind of dead. And then crypto is all suits now.

9:15Like the meetings I go to, Bando, like now when I pack for a conference, like I got to pack like a shirt. I didn't do this in 2021. You know what I mean? I had to bring my nice little quarter zips, you know, skinny jeans. I was going to be straight like that guy by the baggy jean Faroq thing. Like I can't even do my thing. You know, I got to like dress up because you have to go to this night instead. Or I got to sit with the chair of the CFTC, which by the way, that's sick and it's honor. But what I mean is like, it's a different level. So my takeaway is really like, wow, crypto landscape has completely changed.

9:45It's all suited. It's all institutional. There's a ton of money flowing into crypto, like a ton. Whether it's stable coins, even the prediction markets, as you can see, I mean, this is mostly what we're in. And that's why I'm blessed to be in prediction markets because I feel like this is the only thing going on in crypto right now. And it's still very much alive and people are mega bullish, right? And obviously, like, you know, people love to slam, you know, the president and the administration, et cetera. But, dude, you have the chair of the SEC and the CFTC speaking at a panel, like at a crypto conference.

10:15That would have been impossible under another administration and also fighting to get, you know, Clarity Act, et cetera, et cetera, through, which we'll talk about in a bit as well. But my takeaway is like, it's always bullish from a founder's perspective, but from a trader's perspective, I don't know, you know? I'm just talking upon I mean obviously prediction markets are still obviously in the news a lot Calci and body market both seemingly announces and raises at 15 and 22 billion I think respectively there also has been some like mixed messages that you know the Senate was going to put forward some form of prediction market anti-prediction market bill that some of the states were going to try and repeal the ability to offer sports in the certain states.

11:02You're obviously there. The CFTC has kind of come out relatively aggressively to defend prediction markets and say kind of hands off. What was your sense when you spoke to the... The chair? Is it the head or the commissioner? Oh, the chair. The chair. The chair. It's just me and the chair doing an interview. I always sound that funny, the chair. You know, it cracks me up, that title. First of all, He just is like, and you'll see in an interview, but like just someone really motivated that genuinely loves prediction markets in crypto. So it's someone who like really, really, really loves the industry and really wants to see it thrive.

11:40He was comparing what's happening in prediction markets now and what you just mentioned to kind of like crypto 2021 under like Gensler, where like we were getting wealth notices left and right, getting sued left and right, getting attacked left and right, and similar happening with prediction markets now with regards to like the States, right? So he was pretty disappointed actually in the States coming after prediction markets, but can you blame them? I mean, the state of Connecticut, in Massachusetts, Nevada, I mean, they make a lot of their money in gambling, right? In sports betting, et cetera.

12:06And if you check the top donor of Adam Schiff, who's the person that's put that bill forward that you're talking about, his main donor is$450 ,000 in the Indian crypto casino. So not crypto casino, a casino. So a lot of these people are also financially motivated to get those bills through on a sports level. But for my conversations with the chair of the CFTC, et cetera, is these people are really going to do everything they can in order to protect the crypto industry and the space as a whole. And these are people that are there because thanks to President Trump. Now, whatever people think of him in his term thus far, it's fine.

12:41But we wouldn't have this if it wasn't for this administration, right? Sure, price of crypto is down. But I'm a four-year cycle maxi, dude. Like, you know, I believe in it, though I didn't trade that four-year cycle, unfortunately. but the market would have been down no matter what at this point in time. But when you talk to them, you see that they really want to protect and defend, you know, Cal sheet, Polymarket, et cetera. And they really want it to work because what's going to happen, and we talked about it at length, companies are going to offshore again. And the only way to onshore these companies, these giants is by, you know, letting them operate, right.

13:16And by, you know, helping them when it comes to legislations, et cetera. Like the biggest thing that Polymarket and Cal sheet get attacked for is inside of trading. not even the sports betting thing they both came out with a strong stance against inside of trading both kalshi and polymarket on the same day last week um then the sports stuff etc but you know i think that's more of a game of like oh you know the big sports books are just not happy that someone's taking their you know taking their lunch pretty aggressively actually so it's you know there's always an agenda in this of course u.s politics is like that right It's very intertwined with money.

13:51And I think crypto does that too. We obviously have our own packs working for various different crypto causes. But yeah, it does feel as though you're right in that terminology that the production markets feel like crypto did a few years ago in that you don't really know where you stand. You feel like you're maybe constantly going to be in some sort of battle with the local laws. And I think that's just going to be resolved over the next few months, or years even. But this is definitely, I would consider, quite a bullish response, I think, from the CFTC that they're going to be defending. And them showing up to these sort of conferences is quite a big deal.

14:35We never really had that. It's interesting that David Sachs is actually leaving his post, it seems, as the crypto czar. It's something to do with the idea you're only allowed a certain number of days officially to be a special advisor on a topic. So he's kind of moving within the government to kind of something else. But you bring up a point there, which is he oversaw maybe the last year or so of crypto policy. There's been some wins. Obviously, we have seen a softening of the CFTC and the SEC to crypto in general. We didn't get the Clarity Act, which I think some people were hoping for him to get during his time.

15:20We saw the price of crypto, Bitcoin at least, go all the way up to$125K roughly. But it's since down a lot. We've seen that a lot of people are annoyed about the Trump's self-dealing, essentially. And they came on TV, I think Eric Trump this week or last week, and said they'd made over a billion dollars from crypto. What would you give a rating out of 10, do you think, for David Sachs in that role? I love that. We did the same thing with Tyler earlier. It was so funny. We settled for a B. If I go with a report card, we give him a B. Chad GPT and Claude give him a B minus. I would settle for that.

16:05I think, so you're right. So I think also Twitter loves to take things too far. It's like, oh, he stepped down. Thanks for nothing. There's a 130-day rule. Like you said, so the difference is Elon did it all in a row. That's why he ended earlier. It's like days that you actually spend in Washington, right? So you could do 130 weeks. You could go once a week for 130 times, right? So there's that. I would say that he's done a great job in terms of like bringing the right people to the White House, trying to get the, you know, the president surrounded by the right folks, et cetera. There was a Genius Act also that kind of went into, went pushed through during that time.

16:38The fact that we didn't get the Clarity Act is not great. and it looks like that's not coming out soon. I'm sure we'll talk about that. And there hasn't been some insane legislation. Mind you, it's crypto and AI. I don't know enough about the AI side to speak on that. I'm not too sure, but it does seem like the USA has a strong hold again on AI when it comes to Claw, Chet, GPT, et cetera, versus China, DeepSeek, and all those companies. So I don't know. I think a strong B, B -. Sounds like a fair assessment to me. What do you think? I, it's difficult because you have to separate out the price almost from the outcome.

17:18I am somewhat annoyed that there has not been a Clarity Act push through because it, like you said, you really just had this 18 months before the midterms. And yeah, it just hasn't happened. Now that may change, but that's been the one thing I think people are pressing because people are waiting for proper regulation on crypto. And at the moment, we just kind of have a softening of enforcement rather than clear guidance. It's like, right, don't worry, we're not going to come after you, CFTC and SEC. But that doesn't necessarily protect you in the medium term. And I think for the US, it needs some form of regulation to know the playing field.

18:02And that may not have been his fault. but I felt like there was enough of a mandate that that could have potentially been done. How much power did he have is my question, right? It's like how much, and you're right, the Clary Act stuff is really bothersome. Again, I guess I'm not really counting his own performance. I'm just talking about the performance of the outcomes rather than like how much he tried. Do you know what I mean? The outcomes of this are slightly disappointing on that front. and I can see why the outcomes mainly or the most public outcomes being World Liberty Financial and American Bitcoin, all this sort of stuff, look a lot larger when you look at the outcomes of what's actually been achieved.

18:47It doesn't yet feel like if somebody else was to come in here, including the Democrats or a more anti-crypto, even Republican, that this is put to bed. Crypto in the US, there's been some better regulation. Obviously, like we had last week, the SEC and the CFTC, I agreed between themselves what is a commodity and what is a security. That's a win. But you don't necessarily have the clear rules around other pretty prominent crypto practices. And that, I think we need that. I think we need that. It would be a real shame if that doesn't get done. with this current administration. So I think I would put him, I think B-minus is probably okay for where we are so far.

19:38Crypto being down is slightly separate to that.

19:45And that feel, I mean, I don't know if I really blame that on Trump or the current administration that much. I think I more blame that on the four-year cycle. potentially even like it becoming a bit more corporate which like everyone was clamoring for has slightly backfired with the non-stable coin bit of crypto let me put it that way and i think quite naturally there was just kind of like a when we decided to add tokenization and rwas suddenly a lot of altcoins are being left by the wayside i don't see that as an issue though if i'm honest like i genuinely don't i think i think the tokenization of assets and that hurting crypto if crypto can't stand its own two feet against other assets then it says a lot so i think it just kind of it exposes pumped up valuations rather than that being unnecessarily an issue um yeah and then was was there any other uh like strong take i mean the other thing this week obviously we had the clarity act seemingly moving forward moving forward moving forward and then we got news out today or late yesterday that coinbase were not going to be behind this, and they were seen as the main, them and some of the banks really, not coming together a couple months ago, was seen as the main issue.

21:21It feels as though, obviously, it's around this yield issue, that stablecoins, the banks are saying that these stablecoins cannot issue yield.

21:32And apart from calling it rewards, which is going to be kind of this broad-based thing that maybe there is a loophole for, and Coinbase saying, we can't have that. It's kind of gotten to the point where if Coinbase, because they are behind, or the leader behind some of the crypto packs as well, don't really get behind it, this bill probably doesn't happen. And I don't know, was there a sense from you about whether this Clarity Act was going to get done? No, not in my case. So when I was at Mar-a-Lago last month for the World Liberty Five Forum, there was a sense in the room that this is going to pass.

22:16As a matter of fact, Brian Armstrong and Zach Wyckoff were on stage talking about it. And after they spoke, remember, the polling market spiked to like 74 % or so on that panel. So back then, there was quite a feeling that it's going to go through. it did not come up in one of my conversations. I did come up with the chair during the conversation saying that they're trying and hopefully that passes. But no, honestly, the only two things people talk about are stable coins and prediction markets. I sound like a broken record. I'm sorry, but it's the only two things going on in crypto right now in this cycle as a whole.

22:57It was besides meme coins, but that's kind of like its own thing. There's nothing else going on, man, though. So a quick break in your regular programming. If you're serious about your future, grab my free report called Prepare for 2030. I think you've got five years to make as much money as possible. And this guide will help you navigate what's coming. The link is in the description. Download it now. Well, I think people are trying to time the bottom in Bitcoin. That's what I've been trying to do. Where's the bottom, Mando? I don't know. I've been long in breakouts recently. And this is the third breakout in a row.

23:32I'm with you. You both. Me and you both. It's been painful. I think I said it on the show the other day. I bought it at 71, went all the way up to 75, and then mucked it up, exited at 70, lost money there. Bought it again at 71, I think, and then it went all the way up to 78, and cut it at 70 again. And then this time I bought it at 69, and went all the way up to 72, I think. And then it's now cut it at 68 this morning. I was just like, this is starting to annoy me. Like three times in a row. Luckily, one thing I did on the second breakout was hype. I didn't really buy that much Bitcoin. So that's been my main trade.

24:24And that has basically been not flat, it's just up. but like there's it's also about more than 10 percent from where i'm for it is right now and i didn't really exit it so i just kind of felt like we were going back to 80k i was in the 80k before 60k camp and now a lot of people are in the i think it's above 60 chance now that we hit 60k um before 80k yeah well people are talking about an invasion of iran this weekend yeah i'm seeing this right now on the timeline.

25:02I mean, the odds of that spiked. Like the odds of a ceasefire, just like double digit went down like 25%. The odds of like an invasion went up to like 30%. It wouldn't be like Iran, Iran. It would probably be the islands, right? I think that probably counts, doesn't it? No, it counts. No, I'm saying it counts. Like I'm just saying like about Iran mainland or whatever you want to call it. I don't see any of this aging well. Like look, I hate the regime. Like when Ayatollah Khomeini got assassinated, eliminated, I was fucking celebrating, dude. I was blasting radio music at home. I was calling my mom and shit.

25:35So I'm in that camp. But this regime, man, they're not giving the U.S. an easy fight, you know? But also what people fail to understand is they've been preparing for this for 20 years. You're talking about people that have been, like Iran has been self-sufficient for 20 plus years, dude. There's been embargoes on this country for 47 years, you know? So they've been ready for this moment. They were waiting for this moment. You can bring up the list of all the people they eliminate all you want. You can compare it to Afghanistan and Iraq and people all you want. It's just, it's much more powerful, much stronger, much bigger, much more resourceful, much bigger allies.

26:15So I don't know, man. I hope we don't go down the ground invasion route, dude, for the sake of all of us, for the sake of the USA, for the sake of the Gulf countries, for the sake of Iran, Like, it's really bad for, I think, the global economy if we go down that route. Yeah. Yeah, it's an interesting one because I think we spoke about it, just me and you, and I was like, it is more of a dead man's switch. Like, if the U.S. decide to, like, really go after Iran, it's more that Iran can take down so many different things and people with it. And they will. and then i kind of go down the route of okay the u.s like as much as i respect us two i don't think we're like the top geopolitical experts in the world so i think that's probably crossed their mind that iran will go down that route and then i kind of go down the down the route of maybe the u.s doesn't actually mind because they are energy independent somewhat this affects mainly other people more than the US, although obviously the AI trade gets hurt by this, the idea that industries would halt necessarily is less in the US than let's say is in Asia.

27:26And if this is really a chance for the US to get relatively stronger, if you know what I mean, I think this could hurt China potentially more. And then you kind of get into this world, well, maybe Trump doesn't mind. you know maybe he's seeing through two three years here and just thinking right i'm just going to do this now and this is going to cause a lot of disruption which is not what my this is why i said it was like 50 50 that i thought they'd come to a deal i'm i'm now kind of going through the motions of maybe it's it's kind of we don't really mind what happens in any scenario yeah You know, what people don't realize is America's got enough oil and gas.