Is Risk Appetite Returning to Crypto?

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0:52Hey guys, thank you again for joining us for another episode of WreckVision. We're slightly late to time. Sorry, that was my traveling, getting in the way of stuff. But we've got G Money back on the show. Thanks a lot for coming on, G Money. We've got a lot to talk about, I think, since the last time you came on. Yeah, thanks for having me. I'm excited. Where was the market when you last came on? Where was? I don't really remember. Now, the way I think about things for both you and me is pre-synthetics trading competition and post-synthetics. Of course. That was pre. That was the pre-synthetics trading competition.

1:28So congratulations on winning season two. And you too. I don't know if we even spoke about that. Maybe I was in the midst of season two, I think, last time we spoke. But yes, viewers, it's a great honor, I think, for you because you have two synthetics trading champions on this show right now. Season one, G-Money. G-Money won a lot more money than I did. G-Money got a million dollars, actually, for winning season one. And I won season two. I won 250 grand. They haven't done a season three, or have they? I don't think they have, but it was fun. Yeah, I love that. I thought it was good. Anyway, it has felt like a bit of a market where macro has dominated again this week.

2:12Crypto has slightly outperformed, I would say. There was a moment in time where it felt like we had a breakout, the ATK coming, which was the second breakout more recently which also got kind of semi-rejected what what's your take on the market though here um i mean i just think that everything right now is just obviously revolved around iran right and it's just kind of like risk on risk off really based off of what the headline is around the iran war and i think that's kind of where we're at at the moment right like i I just think that even like, you know, trades that you think are going to work maybe longer term or, you know, people are just taking risk off.

2:55Right. And when you take a look at it and you take a step back, you know, outside of crypto, pretty much all assets are pretty close to their highs. So, you know, if like if you had a lot of risk on, then like it kind of makes sense to trim, especially with a lot of uncertainty. And, you know, one day we'll get a headline like the war is about to be over. And then the next, you know, you know, I think like today we got a headline that we're about to put troops on the ground. So, you know, I think it's just really macro driven at the moment. I think there's personally like I've been I don't I'm sure you've been spending a ton of time in the AI space.

3:27I've been spending a lot of time just like by putting and stuff like that. I think there's a lot to be really bullish on long term. But, you know, again, I think like short term things are going to be just driven by it, by like what's happening on on the macro level. yeah yeah it has felt like just headline tennis when it comes to iran and the situation doesn't seem to be de-escalating yet we had obviously attacks on the the uh gas fields of both iran and qatar this week which kind of speak the market and we've seen a massive increase in gas prices particularly particularly europe seems to be getting bearing the brunt of a lot of this because that they've got a lot less energy independence outside of Russia.

4:10But, and then I was looking on Polymarket today, I was like when people think this kind of continues to, and there was a very low chance people think that this de-escalates by the end of this month. And then it was only slightly higher even for April, but May it was like 50-50. They're like second week, by the second week of May, it was like a 50-50 battle. I guess I'm kind of of that view too I've said look I think this will be a two-month thing just because I think everyone will ratchet it up but the pain will just be too hard for maybe not the US and Iran but like the allies of both to be like we can't continue with this for that long and that's when I think we kind of edge towards the deal um but for now yeah we're kind of just hoping that the energy situation doesn't get that much worse um although yeah i i totally agree with you i think one of the things that i've been i i kind of feel like both venezuela and this iran situation have ultimately been about china right because i think if you view it from uh the lens of this is all about the ai race and whoever wins first access to energy is obviously a huge part of that so i think maybe this was the u.s trying to preemptively do something so that it makes China more likely to want to come to the table.

5:31I think I was really looking forward to, I was hoping that the talks with Xi at the end of this month would kind of lead to, you know, the ceasefire or like the end of the war. So the fact that that got pushed out kind of sucks. But I think the fact that it's still on the table is pretty solid because they think if China really wanted to hardline it, they would just say, all right like you know we're not going to even entertain the conversation with you so I think that kind of shows that maybe they're willing to come to the table because they haven't you know outright you know obviously they're not involved in the war but obviously them kind of like ending a meeting or whatever because of that is very it shows like a huge like a hand their hand a little bit so I think the fact that it's still on the table is positive.

6:16I think it just, I think for all market participants in every aspect, I think we all just want this to be over. Right. And it's like, if this was a miscalculation, then like, you know, end it and let's move on. But again, like, I think a lot of all this stuff that's happening, like we all have ideas, but we also don't know what, you know, the, the special intelligence is that they had that made them make this move when they did. Right. So, you know yeah all bystanders yeah it feels like they probably moved just because they thought they could do maximum damage at that exact time um and obviously the negotiations weren't going that well it sounds like but i agree with your take that china will probably decide when this war ends china is responsible for basically the iranian economy right now because that's where all the oil is going and if china at the same time is facing the brunt of this um because these higher costs affect its own domestic industries, which is heavily manufacturing, and the slowdown of trade is also massively being affected here.

7:15So there will come a point in time, I think, where there was, and I think the US is facing increasing, not dissent, but pressure from the Gulf nations, this doesn't spiral and attack their energy infrastructure. So I think we're going to end up in a situation where this does de-escalate. That's just my gut, but you never know. one real move, it can escalate very quickly again. Yeah, I think so too. I've been reading a couple of reports over the last couple of weeks of how Iran probably doesn't want to de-escalate because it helps them a lot, the party in power, it helps them a lot internally by not de-escalating and dragging it down as long as possible.

7:58But I think to your point is, I think it's very easy for the US to be like, okay, we're done and Iran to say, no, we're not, right? So that's kind of maybe where we're at right now. But if the US and China are saying we're done, then I don't think Iran can say no to the two biggest powers in the world. You can say no to one, but I don't think you can say no to both. Well, they just rely so much on China for the, they would just, yeah, it'd be kind of impossible, I think, to say no to when they want to say no. So that's my view. I mean, crypto markets, it felt like we were really outperforming.

8:34And there was like a run to 80K. we had something like eight straight days higher and then got to around 77, 76K and then kind of reverse and then Bitcoin headed back down to it's currently just shy of 70K and most alts have kind of underperformed this downward move. But my personal view is it's still outperforming. Like if you look at crypto versus gold versus stocks versus a lot of even industrial methods now since this conflict began. Crypto has been one of the best performers. And although everything is not doing great, I still kind of feel like this is a bit of a bear trap now to be bearish on crypto here.

9:18Gold has been absolutely smoked over the last six weeks, now down to close to 4 ,500 an ounce. Copper's broken down. Silver's really got destroyed in that move. And Bitcoin in that sort of world has done okay. You've also had a breakdown in even the MAG7 stocks. So I think it's like a pocket of strength. And I think a lot of people are, I know they're getting overly bearish maybe as we've broken back down again. And I feel this one's a bear trap. That's just my gut. As a trader, I smell this one as like everyone's getting too bearish. And I kind of feel like this is a good spot again. So I'm still optimistic at this point.

10:09Yeah, I mean, I think I'm probably in the same camp as you for the most part. I'm not necessarily trading crypto. I think a lot of the action is probably happening more on the equities and commodity side of things right now. And I think crypto, for better or worse, I think crypto has just been boring for the last six plus months. And I think you kind of see that in the price action, which is always like a good sign, right? Because I think it's when there's a lot of ennui and people are really jaded and people are leaving, right? I think I saw something last week or the week before about the number of developers building in crypto.

10:47You know, even though Vibe coding and coding is at all time highs, the number of developers coding stuff on chain is at, you know, not all time lows, but like relative lows, recent lows. And so like those are always like good signs of like, you know, exhaustion almost. Right. And like I'll even myself, right. Like I've just been spending a lot of my time on the AI side of this. So they just think it's so interesting. And I think most people feel that way. But I think that's like probably a good sign of maybe a local bottom. But, you know, I think like everything, everything is like risk on risk off together.

11:22Right. But to your point, I've also noticed that crypto, when I check my prices, like I'm like, oh, it's not as bad as I thought it would be considering the moves I just saw and everything else. Yeah. Yeah. Yeah, it might take a while for us to break. If this is really the bottom, it might take a while for us to break out just because of that. Like everyone, no one really cares right now. But no one really cares right now also. So when everything else is selling off, it's kind of a good little moment. I was looking this week and the things that kind of got me a bit more bullish again, I was pretty bearish in the Clarity Act going through, I think, last week or two weeks ago.

11:59And then this week we saw the SEC make some pretty definitive moves around what's a commodity and what isn't. And it's seemingly setting the stage for the Clarity Act potentially going through still. There is the odds, I'm looking right now on Calci, the odds of it going through for August are up to 62 % now. And that's been rising over the last few days. So it does feel as though that has slightly become more bullish. You also have just continued adoption. Morgan Stanley are now going to release their Bitcoin ETF. So that sort of side of stuff, there's just headlines every single day about it.

12:41And it feels as though even down here, that isn't really dying down. Crypto is like TradFi getting involved. And then I guess we've continued to see pretty good growth in some of the major apps, which is what I've been most bullish on this year. but hyperliquid got a lot of press this week, firstly because of all the oil stuff. And then they're actually partnering with the S &P for tokenized indices on hyperliquid. And that was the first sign that, if you know in hyperliquid, there's some regulatory uncertainty about whether perps are going to be allowed in the US, but like these sort of big partnerships kind of lead the path that this will be allowed.

13:22It felt like hype hit a high of 44. 44 billion i think fdv uh during the week it's back down a little bit to like 39 but that and then you had calci raising at 20 billion alongside polymarket and that's not the business the payments and all of that just continues to be very very strong so you you've been kind of a big hype person since early on i believe um i was i was in not early but um i mean i i haven't been like that active in it and like i said i haven't been that in crypto but like i obviously saw the uh the um the upside there but like i didn't hold on long enough uh to really take advantage of it but you know it is what it is um for better or worse i think i've probably been bigger in the in the tau ecosystem um more so than anything else that had a bit of a week as well Tau had a bit of a week.

14:23I mean, a lot of these crypto meets AI coins had been rallying, and we spoke about them last week, and I didn't think there was that much value there. But Tau is actually probably the only exception there, where I feel like it's something interesting going on from a training perspective and the subnets. There's some, you know, some are starting to reach and do kind of interesting things. This week, we had basically a big shout out on the All In podcast. I know Jason is somewhat involved. He was somewhat of an investor. I think Jason is a partner in a Tau fund with Mark Jeffrey. And they raised, I think, some money to invest in the Tau ecosystem.

15:05I know Shamath has been following the ecosystem for a while. I remember you did a shout out probably like over a year ago, maybe a year and a half ago, just like in passing. So I think, but again, like, I think this is one of those things in crypto. It's like, I think for me, the really interesting stuff with stuff like this is they're talking about it, but they're not talking about it in terms of crypto, right? They're not talking about it in terms of like, oh, the price went up a lot. You know, when it was mentioned on the all in, they were basically talking about open weight models and how, you know, the frontier models are top of the line, but, you know, Jensen and obviously the guys in the business of selling GPUs.

15:41So he wants as many models from as many people as possible because that benefits him. But, you know, he was just pushing how important open source would be. And then I think it was Shamath brought up Subnet 3 and how they trained a model decentralized. And it was a feat in and of itself. And, you know, it's up there and it's not as competitive, obviously, as the frontier models, but, you know, competitive enough. And I think one of the things we've been seeing a lot in the AI space is, yeah, Claude and Codex are incredible, but they're also really expensive. So it's like, how can you get maybe almost parity in terms of compute and inference at a fraction of the cost, which is what we've been seeing out of China a lot.

16:25But hopefully, that to me is the interesting things, especially when it comes to crypto. and I always felt that way like with Ethereum in kind of like the early days when I was starting to get involved in it is like I want people to be excited but like not be excited about price because like when you're excited about price then it's like you know you're just happy that numbers going you're talking about it but if you're excited about like the actual tech side of it like I feel like that that narrative usually leads price and so that makes me feel like bullish on the ecosystem now granted i'm long from from way higher but like i haven't sold and i'm just like yeah i'm just you know i think this is one of those things where i think the right people are involved um uh constance constance i think is like a really great leader i've heard him talk um a few times in person and like i'm like yeah this is the type of guy um that like will lead an ecosystem uh to good things so you know i've been i've been holding that position there, but I've been watching it, you know, just like everything in like, you know, the last couple of days, everything ran up.

17:29Yeah. I mean, you bring up the tau chart though, and it's kind of been the same as where it's been for three years. It's not one of these, it is not one of these coins that's just bled out. It's just been around 300-ish for three years now, it feels like. And then it has periods where it goes up. And, you know, I think the highs was maybe 600, 700, but, but like, it's, I feel like whenever I look at it, it's just like at the same level and you're totally right. If you spend any time in that community, it is very diehard. There is ultimate faith that this is going to be the way that we need to move for the training of these AI models and just a more decentralized control of, of top ai models and then your the all-in podcast obviously had jensen on it and he was talking about these sort of issues like how do we get to a an easier way to train um and control different models and it feels like this could be an interesting way to do it and that's that's only one of the things that does right now obviously does the system is a system of rewards based on subnets and like whatever the subnets are doing there is a process by which um they're basically rewarded based on how much it's staked for each of the subnets right and how much revenue they i think they bring so it feels as though like they've got like uh image generator they do all sorts of decentralized compute they have an llm they have will be sort of different um subnets doing different things and it feels like there could be some really cool stuff that comes out of that.

19:10Yeah, there's, I mean, there was actually a buddy of mine just launched Lead Poet, which is, it basically helps find leads, right, where people will be like, I'll pay X amount per lead, you know, and just kind of, I think, I think we're still in that, in that part, that like chapter where people are figuring out how to utilize this for incentives to build businesses around it. So I think like now when I have these conversations around people starting subnets or wanting to build on top of Tao, I think they're very interesting. I'm like, oh, yeah, that's a good problem to solve. And there's almost like a dual layer of it's very similar to open source, right?

19:47Where it's like, think of maybe like Red Hat, right? Like Red Hat is a private company that builds on top of Linux. Linux is open source. So you can go do whatever you want on Linux. But if you want somebody to really help you with that, you go to Red Hat and they'll set it up for you. And it's like, I think I'm starting to see more of that type of model happen within the Tau ecosystem, which again, I think is just, I think it becomes much more sustainable because it's not, oh, we're going to issue a token and we make our money because the token goes up and then we sell it. Right. And so I think that's kind of been, you know, right.

20:23It's good and bad, right. Because it's good in the sense that I think it's more sustainable. It's bad in that it doesn't, you don't have the Ponzi-nomics that you normally see in crypto projects of like number goes straight up. But I think it builds like a more sustainable base, right? Like even to what you're saying, Tau's kind of been in the basing structure. It's been, you know, in a range from like 200 to 600, let's call it over the last couple of years. But like I have my Tau stake. So like I'm earning yield on that. Right. And so it's like as long, it's like, so to me, I'm like, cool, I'm just lowering my cost basis at lower levels.

20:57And I'm fine with that because I think this is going to take a while to play out. 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. Looking at the market cap, it's about 5 billion FTV. You just feel like if one of those things, one of the subnets does hit product market fit here, that's the sort of thing. Because the way the AI valuations work, it can just go pretty crazy.

21:34In the same way that we've kind of seen with these other AI or other applications in crypto, once they hit, suddenly the valuations just can go kind of crazy. So that does seem like a dark horse. I know Raoul's been looking at it. I know there's quite a few prominent voices in the Tau community. I know Barry Silbert's like a big Tau tower guy and uh like you said like now the all-in guys clearly jensen's semi-aware of what's going on there as well and um the more and more that happens i think the the better chance i think it has of actually getting adoptions it attracts smart people um i was slightly critical of their old model which just seemed to be like a staking model but with very little view to revenue and i I think they did make some adjustments there before their halving.

22:24And now I think, yeah, it could be very interesting. It could be very interesting. I think it's just because there's no Ponzionomics in it. I think it's just like uninteresting to most crypto people because people want like, you know, I want a 10x in a week, right? And so I think because, you know, it's not set up that way, you haven't gotten as much fervor around it as you might otherwise have on like a newer crypto project that's set up for that. But I honestly think that's positive, right? You just kind of got to wait. But what you were saying is like, I've been to a couple BitTensor meetups and or events.

22:59And it just, it reminds me a lot of like early days, Ethereum, when I would go to like earlier Ethereum type events where people are just excited. They're not necessarily talking about price. Because I think as like a rule of thumb is like when everybody's talking about price, that's probably generally when you want to sell, right? People are excited about where the price is. You're like, oh, my God. Let me take some off the table. But people are actually excited about the tech. I think that that's where you kind of want to be, right? Because these are the true believers, the people that will stick around when the price dumps because they're actually excited about what's being built on it.

23:37Yeah, I agree. That whole space, that crypto MTI space has definitely been the strongest one for the last month. we spoke about Venice a little bit on the show last week and then, which I thought was interesting. Again, I kind of feel like it's one of these apps that, that is now getting product market fit. Like Venice gets brought up quite a lot. Actually, I feel like in AI circles because it's this more privacy focused LLM essentially that plugs into all the general models, but allows you to keep your own data. and a lot of people find that very very powerful um and are you familiar with like the dm the dm the dm component of it no so yeah i'll just run you through it because this is what i bought dm i don't know like the first week of january-ish around there and so basically and i thought that that was more interesting to me than like venice straight up because like so that's not vvv the token there's there's another token is there so there's this token called dm right and so basically what it is if you own one dm you get one dollar worth of compute that renews every single day in eternity or until they go out of business right and so i thought it was kind of interesting because i'm like you know what i think once clawed code hit and i was like for it was about the new version with opus 4.5 i had been trying to vibe code for about two years and i would never i would get some percentage of the way there then like i get stuck i'm like i can't put anything into production because i'm not technical enough and then once 4.5 hit i actually put something into production like very quickly and easily i'm like oh wow like this changes everything and so then i was like i'm gonna start eating through through compute because i'm actually going to be able to build stuff.

25:35Right. And so it's a DM and I was like, okay, so if I can, at the time, I think it was around 320, 330 bucks for one DM. So that would be, you know, a payback period of less than a year. If I use that$1 of compute every single day. So I bought 27 compute, which was around like eight,$9 ,000 at the time. And I was like, yeah, I think this is kind of interesting. Cause like I get renewable credits that I can utilize on a 24 hour basis. and then there's some like residual value that i can sell it like later on if needed so you know eric is obviously like a really crypto native guy so he you know had developed a pretty good staking mechanism of like you take your venice token your vvv you can stake it you can earn the dm or you can burn the dm and get the the vvv so they're like linked but it's not like infinite supply on the dm uh i think right the dm's like maybe like 700 bucks yeah i'm looking at it 750 it looks like this is an interesting one i mean separately there's been a lot of talk about ai tokens i mean the ai leaders are you could sometimes they say things you just never really know i think if they're so far from reality but it's like we're going to replace money with ai tokens has been the has been the new one that i've heard and this is the first time i've seen that actually on in crypto this is kind of wild i didn't even know this existed um okay Now, I thought VVV was a bit more like this, but it sounds like VVV used to get this.

27:08So VVV, I think, is almost like the, I don't know if governance token is the right word, but let's say if there was an equity-like instrument, it's VVV, right? And then you can, I think, lock it up to earn the DM so that you can use the compute on a daily basis. Because my view is, dude, the more I use this stuff, the more inference I need. Even if it gets cheaper, even if it gets smarter, like they're just, you know, it's intelligence, right? So it's like how much demand is there for intelligence? So like my view is that, you know, if I have the ability to have like 100 Albert Einsteins work for me, like, yeah, I'm going to utilize that, right?

27:48So like I'm always probably going to be close to maxing out that compute as much as possible. And I think most people will, right? And like we have, we have so much demand, I think for imprints that we can't build it fast enough. And that's why I was just like, all right, well, I think this is interesting at the very, and I, like I said, when I bought DM, I wasn't necessarily thinking about it from like an investment perspective, which is great. Yeah. I was like, well, if I utilize the full allotment every single day, I'll get my payback in less than a year. So it's like, I guess my question that I ask people is like, how much would you pay for$1 of infinite compute?

28:26Right. And so like, I won't say, won't say infinite. Cause it's based on whether they stay in business or not, but let's say they stay in business for like five years. Right. How much would you pay for a dollar of compute from them every day for five years? Right. And so I don't know. I was just like, I, I think I'll definitely use it in a year. And like, you know, now like it's doubled in, in that time. I think it, you know, it's a little bit harder to make that distinction of like, all right, well, it'll take me two years to get payback, but you know i think at some point you know maybe there's an upper ceiling bound but maybe it's at three years i don't really know where that number is but i felt like at one year of payback it was definitely like a slam dunk and if i bought it like two weeks earlier it would have been like three months of payback you know which was an even bigger slam dunk but and it's the only way you can get it via staking bvv or can you or is there like another mechanism for buying it on the site you can buy it you can buy it like it's it's a token so when i bought it i didn't realize that I could have just bought the BVB, staked it, and got it over.

29:28So I aped in. It's like in classic crypto, ape and ask questions. And so I aped, and then I realized it probably would have been cheaper if I just bought Venice and staked it. Yeah, no, this makes a lot more sense. And it kind of also gives a – I know that BVB, when you staked it, you get lower API costs. But now this kind of makes sense of like the other way that that is done in terms of tokens. And that is an interesting model. Like, again, I don't, when I look through a lot of these coins, I didn't see a lot of that. A lot of these feel like pumps from a low base rather than, but Venison Tower, VUV Tower, and now obviously DM, I don't know, they seem slightly different.

30:13They seem like they're on the application level a bit more rather than just a lot of these are, we're going to do an L1 for agents agents or we're going to be a DEX for agents. And he kind of felt like that. I've heard that sort of story before, but these feel very different to me. They feel less on the infrastructure level. They feel more on the application level. And I think the thing that I found exciting about it was that I think if you were to talk to somebody that uses a lot of the inference and you were to ask them, how much would you pay for a dollar of renewable inference in perpetuity?

30:50Because there's no like crypto part of it right it's like oh you buy one diem and you get one dollar every day now then you can make the argument it's a dollar you know what can you do on a dollar of inference right now per day you really can't do all that much but you know as the costs come down maybe you can and like one dollar of inference becomes really valuable right but you're always gonna you're probably gonna always want more inference like i don't think we're i don't i think we're like there is some upper limit to it but i think it's way way way higher than like where we're at now, even if costs come down significantly.

31:20Yeah. No, I agree with that. Obviously, you said this is where you've been spending a lot of your time. If I kind of even go back to where we were maybe a month, month and a half ago, Open Claw was huge. It was just about to get bought by OpenAI. You had everyone buying Mac minis. And then it felt like, well, first it was Clawed. Then Clawed kind of came back with new models. and I saw new models from JetGPT. Now Google seemingly released a whole new suite of AI models. And I don't even know. I mean, I do a bunch of other stuff. I've been traveling this week and I feel like I just, whenever I'm away from it for a week, it feels like it's just something new.