E152: Raoul Pal: How to Make it in Crypto in 2026 (without getting lucky)

29:55And we defined active users by and this is, ChatGPT came up with this. It's like, I think we should use kind of, people who use DeFi, people who use this, people who do like five metrics for that. And then ranked the chains for it. And so what was overvalued, what was undervalued? It gives you a pretty decent idea. So it's really good at almost everything. It's great reading technical charts as well. So you can give it a chart and say, what do you think? And it'll give you a decent output. No excuse anymore. There isn't really that I don't understand it. I don't know how to do the homework. You just keep asking chat GPT until, until you get the right phrasing, right?

30:36To get what you want out of it. Cause at first you're like, well, it's stupid. It doesn't know how to do this. I'm like, no, no, it's generally you who's stupid by not asking the right questions. I've learned this the hard way it just takes time i have to give a shout out to your don't fuck this up framework because it made my cycle so much smoother so much less stressful right i mean if you also build businesses that are doing really well etc obviously it adds another layer on like of calm because you talk about income all the time yeah game changer like insane game changer yeah but just the don't fuck this up framework on, oh, I haven't round tripped again.

31:15It feels good. No, it feels good. Yeah. I round trip smoking chicken fish, but other than that, I haven't round tripped anything. I mean, it's been compounding over time and it goes up and down, but it seems to be working. Well, the only ones I round tripped, if I think about it, are my fart coin, my pop cat. Yeah. All of that shit. All this shit. Yeah. Of course. Which we kind of knew. But we thought we might outsmart it and get out because there's going to be another leg higher and there never was. There never is. There never is. My question is, there's an expression that says, do as I say, not as I do.

31:53Does Raupal follow his own don't fuck this up framework? Yes and no. Why? Tell me. Because I'm more concentrated. Again, every time everybody hears that I'm concentrated, they think they should be concentrated. I'm concentrated because I built a valuation metric based on all sorts of things about why I'm overweight. Sweet. Now, can I change that? Will I change that? Most likely at some point. But right now, I'm pretty comfortable with it. Yes, it's been more volatile because it's designed to be more volatile because it's an early stage, early network adoption model. So you have to understand that it's more volatile to the downside and more volatile to the upside.

32:33So today, we've just finished. before yeah we've just finished a awful two weeks of relentless selling yeah you turn right i woke up this morning or yesterday morning i woke up and it was this morning and sui was up overnight suddenly 20 i saw 30 before yeah it's like another eight percent now and everything else was up like eight percent i'm like okay so it works both on the upside and the downside i understand that and I can accept that. Other people shouldn't. So do I follow my own? Well, I have a bunch of, we talked about digital art in Ethereum. I don't think of that as ETH, but it is an ETH exposure.

33:14But other than that, the rest is I have businesses that flow cash flow that allow me to make allocations correctly and I'm taking more risk because I do more homework. It doesn't mean I'm going to be right. Could it be possible? I'm only to blame myself if I get that wrong. For other people, don't listen to my asset allocation. Listen to my general guidelines. Never borrow conviction. That's the most important. Every time I lost money, I was borrowing conviction. Oh yeah, I've done it every time. Every single time that I didn't do it myself and figure it out myself. Every single time. It was interesting.

33:52I just interviewed Mert about Zcash. And the one question I asked him, and today the markets are rallying and Zcash is falling. And I said, are we sure it's not just, I said, I really like the narrative. It kind of makes sense. But are you sure we're not just seeing a rotation where people are desperate to back one thing again in the middle of a sideways down market? You don't know. And people rent conviction. Oh, you know, Ravikant said it. And so-and-so said it. Therefore, we should buy it. Look, it's going up. So you build this reflexive loop. But the reality is people are just rotating money from something else that they're selling to try and find the thing.

34:33It needs to have proper long-term traction. I mean, this one has a nine-year of story. Yeah, of going. Yeah, totally. Now, I actually like the narrative. I don't own any. I like the narrative. I get it. I get having privacy. But as I talked to Mert about is we're so tired of fighting governments and anybody who chooses privacy coins are going to have to do it all over again because they're going to try and stop it. It's like, do you really want that fight? I mean, I understand why on a philosophical level or on a, you know, self-interest level, why you'd want to have that fight. But, you know, I've been in this business since 2013.

35:19It's another big fight to have. That's a huge fight. It really is. That's the ultimate fight, but it also makes so much sense. You think about it? It does. I mean, and we should have the ability to have private money. But the US imposed FATCA on the world, which is their ability to basically charge anybody with money laundering. Every bank, everybody is under that guideline. And so that stops this KYC, AML stuff everywhere. The US doesn't really do it in the US to the same extent that everybody else has to. And so privacy coins basically contravene what the US is telling the world. So every bank is going to fight it.

36:07It's like when I actually figured out why Cayman banks were so scared of crypto, it wasn't because they had some fundamental hatred for crypto rails. There's like, we can't do the FACA stuff and the US will prosecute us because we can't do on-chain KYC. I'm like, oh, I get it now. So it's actually regulations still that's causing it.

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37:32Whether you're building words, stories or characters, Story Protocol gives you the tools to protect and expand your creative universe. To support this show, please check the sponsor links in the description down below. On privacy and Zcash, I have a section on that, so I'll go. So I basically bought my first few Bitcoins in late 2018, early 2019. The reason for that is because of three gentlemen that I had identified online that were pretty good at, pretty good, pretty excellent, obviously at predicting the future of technology. Naval, Balaji, and Chamath. And I was like, the combination of these three guys together were in 2000, late 18 or early 19.

38:16They're saying that Bitcoin is 3K or whatever. And they're saying it's going to 100K. these guys are a million times smarter than me each on their own so if you put them together so i was like okay i need to buy some bitcoin and and the issue is they're all friends yeah so you're actually not getting the multiplication of intelligence you're getting a group of people agreeing something which is still signaling it's still signal I think they're all in Bitcoin since like 2012, right? Yeah. And then here we are, seven years later, Bitcoin has reached 100K, as they predicted.

38:57And now two of them, Naval and Balaji, are back with another big one, privacy, right? Because as you said, there's always this narrative of the month, of the semester, of the year, etc. But I have to remember who are the guys who basically I was listening to and made me, they didn't make me buy, but I was, it's a no brainer. I need to buy some Bitcoin a couple of years ago. And now two out of them, they're saying, Naval says Zcash is the last, or privacy, right? But Zcash is the last 1000X in crypto. It's an interest against Bitcoin privacy. Balaji says after Bitcoin, only two protocol breakthrough matter, Ethereum for programmability and Zcash for privacy.

39:40Well, we have to pay attention because... I'm going to layer onto that as well, is Barry Silbert, somebody who I've known for a very long time. Yes. And Barry has been telling me this for a long time. And he was wrong. Until he wasn't. But these are the people who held Bitcoin for a long time through down 90 % moves. Chris Benisky, another one. So there's a lot of signal from people that I really trust or listen to. The issue is, is it all came from, no. This time around, it's all come from Naval again. But he's a high signal to noise ratio anyway. So I agree. What do you need to pull the trigger on a Zcash?

40:26What I discussed with Mert in the interview was like, we can't prove it until the whole market goes up and it continues trend and not a rotation right now it's confirming the rotation thesis but i kind of think that probably it needs to it got overbought anyway and what you want to see is whether it finds a base and then starts pulling up again now do i need to buy it now well we got i've got plenty enough crypto exposure do i need that asset to say I was in earliest. I don't really. I'm not sure I'm going to chase it, but I might buy it in the next down cycle. So I think that comes in, let's say, 2027.

41:13Maybe that'll be on my shopping list. Because again, it's likely to fall a significant amount. And then for me, it's the better entry than now. I've got my bets set. I don't really need to switch right now unless something changes. But I would think of it as, okay, let's see how it does. like solana did last cycle and it pulls back you know it's the same thesis i've got for all of these is if you can prove that then it's not doing the spike and then back down again that it's done every time then you're onto something much bigger and again it might be back at these levels and it might have gone up to a thousand or whatever it is and then back down yeah do you have a higher low yeah a higher low nice base yeah the number of holders remains you know stuff like that people are building use cases good signal could it be that you end up underperforming people who followed you don't fuck this up advice of course of course um and i don't worry about that because it's my responsibility you know so maybe my bet in sui is wrong and maybe i end up switching later into whatever it may be slana back back in slana whatever the trade may be z cash and other people have outperformed me i don't worry about that i'm just doing the best that i can do for my own capital and i have to assess things on a real-time basis and assess has anything changed or not and if i don't think it's changed i just continue as is and assume that i should get it mainly right you might get it really right but don't assume they will as long as you get it directionally right enough you should be okay yeah i read a tweet of a guy whose girlfriend has been dollar cost averaging eth and bitcoins in 2019 no crypto twitter noise no drama nothing and she has outperformed massively her boyfriend obviously you know the the standard understanding is in brokerage accounts the best performing clients are dead ones yeah You mentioned Chris Bernisky before.

43:22On your podcast with him, you said that most people are agonizing now because they're flat or negative this cycle because they didn't buy the low in size, which is very hard to do. So we always get back kind of point zero, which is, isn't the way to make true money in crypto just dollar cost averaging Bitcoin forever? Like an S &P 500 with better returns. Yes. But I would say even better is to weight your dollar cost average to when the market's down X percent. let's say down 30 % or more you do three times as much dollar cost average as you do when it's making new highs you will definitely compound better it's not that difficult to do it's harder psychologically because you I still have this FOMO I buy Bitcoin every month I have this FOMO that I always think it's much more likely it goes up than down and then I always end up buying local tops I'm like the Michael Saylor of newbies literally like a couple of weeks ago i'm like oh it's going back to 106 right i and i usually i buy at the end of the month i'm just gonna buy that and then it goes down to freaking 80k five days later i'm like fuck's sake i can't believe it yeah i mean i'm just whatever yeah i had my position i thought you know it was on its way back up again i thought listen it's probably going higher and then it was in sui and then it just went back down below where i bought it well below where i bought something like really and that was three weeks ago but i don't even think about this shit in the end because once you've been around the market long enough you realize you don't remember a single one of your entry points yeah not one you don't remember when you were the hero buying the dip unless it was a really the dippity dip dip if not you don't remember it and you don't remember when you blasted a local high because it doesn't matter You look back in the chart, it's like, who cares?

45:23Oh, you remember buying Bitcoin at whatever, 10K before it went to 3.5K during March crash, and you're still up 10X, right? I know. And you were down 80 % in two days. And you were probably swearing at whoever you followed into that trade on X, calling him a fucking moron and a scammer and a cheat and a liar, right? And he went down to 3 ,500. See that guy, he ruined my fucking life, and you're now up 10X from the entry price? It's like, this is the thing people don't understand in crypto. Time is everything. You have a journal where you collect all the insults? No, but I do do on the Drinks with Raoul show.

45:58I've started doing the tweets. You're reading the tweets insulting you. Actually, it's good. It's a good way to process. It's a good therapy session. Yeah. But, you know, it's also, it's signal to me is when I'm not communicating things clearly enough. I try really hard to communicate things clearly. And if I'm seeing that people are like, you told me two would go up because on that podcast, you said it was going up and then it went down. You have to kind of explain to people time horizon, the dollar cost averaging idea. Are you in the right part of the risk curve for you? Do you understand what you're buying here?

46:39Do you understand you're buying an earlier stage token that has a risk that it doesn't get network adoption? Do you know how to spot if it's got network adoption? if you don't move to bitcoin if you do you know even everybody became ultra moronic on eth saying eth's gonna die i'm like the thing with the deepest largest amount of active users wallets businesses built i mean six months ago people nine months ago people like well it's going to a thousand and below and it's all over because people were just following a narrative and not actually just looking at the reality of it yeah well let's look at that now before i said i went to silicon valley i talked to the biggest investors and builders there silicon valley understands exponentials right so i usually ask most questions and i listen but in this section i'll try to do something a bit different i'll bring the insight for my the podcast trenches and obviously ask for your your opinion um so don't people don't get mad if i talk a bit more than usual in that accent which will get them mad because this weird people get mad anyway and they're gonna accuse you being french obviously exactly exactly i had a comment i never met a french man who i liked okay people so i met french woman who i like but i didn't mention french man well i didn't mean whatever i was like okay cool whatever actually i laugh for me it makes me laugh every time okay you have a reason to be mad they always find the reason to be mad i know anyway i was thinking if i bring a few of this opinion i i i kind of collected from there it's very helpful for the audience.

48:24Super interesting, yeah. And so let's go, basically. The first one is, I see quite a lot of early crypto believers. When I say early, I mean 2017, 18, 20, 21, right? It's not that early, but it's been some time, right? They're living to invest or to build in other industries, especially AI. They tell me, oh, I'm disappointed. Crypto hasn't really delivered on its promises, decentralizing everything, decentralizing, dentist, decentralized Amazon, decentralized everything. This was the really cool thing. But here we are. We have some ETFs in Wall Street. We have some stable coins. I'm disappointed.

49:03Therefore, I'm leaving. If I read between the lines, I think that the reason they're leaving is because they haven't been able to make easy money for a couple of years. I think that's the reason. Or maybe they're down bad. this cycle because it was much harder and basically they realized, I don't have an edge anymore, right? But what they're saying, these people, they're saying, crypto big returns are over. It's done. I hear that? Cool. Then I go to Silicon Valley and I talk to the guys who invested in Notion, Figma, 10 million valuation. It's worth 30 billion now. The guys were building the ETFs and see all the flow and all the narrative, what's going on, right, on the field, right?

49:57And I hear the opposite. They're saying the big crypto returns are still upon us. I was recently in Silicon Valley, we were a three-hour podcast, obviously, and I talked to Avishal from Electric Capital. We invested in companies like Figma, Notion, made 1 ,000x on multiple of these investments. And he basically talked about crypto like venture bets, which is something I didn't really think before. It's liquid venture. Basically, but I was thinking because it's liquid, then people, like most people, everything's kind of going to go up, right? But basically, the harsh reality was, in venture bets, it is normal that the majority of the investment go to zero.

50:41They actually fail, which we've seen with crypto in the last couple of years. The majority of the crypto, maybe you don't lose everything, but you lose most of your money. And that's normal. And then there's a few ones that are great investment. I mean, they're amazing investments. And the problem that most people, the mistake that they make is you should hold on them forever. Because when these exponential bets work out, they become so much bigger than you can imagine. Yeah, I'm going to push back a little bit. as a VC, you've gotten pre-token generation events. Your valuation has an even further cushion.

51:25So when the token's been trading, you buy it in the open market, the power law doesn't work as well because the power law is that distribution where 5 % gives you all the returns and everything else, middle chunk does okay and everything else fails. really still the price you buy at is a significant driver and i've tried both methods so i tried it the last cycle in 2020 i bought a broad portfolio um and yes most of the returns ended up being in ETH and Bitcoin and a bit in Solana at the time. But really, holding the rest didn't give me that value. And I don't think any of those, Tron's probably done well this cycle.

52:18There's a few, maybe if I look through the ashes, the rubble of what I bought, but most of it was shit. So I don't know. It's not easy. But if you get it at a very low price, it makes it a lot easier. I think the argument here is basically that even a Bitcoin or an ETH or Solana is still cheap today. It can still have huge returns if they're successful. So my view on this is, and I keep saying it, is we're$3.5 trillion asset class today. Just take the trend rate of growth of the market cap in a log regression channel, and you get to 100 trillion in 10 years. And that's even assuming some slowing.

53:05So it doesn't go to two standard deviations of a ball. Just some slowing of the trend, you get to 100 trillion. So we're only 3 % of the way there. Then let's go back to, okay, Bitcoin dominance will fall over time versus smart contract dominance, which will rise because smart contracts have more use cases. That's not a diss against Bitcoin. It's just the applications layer is so much larger than the collateral layer, which is called Bitcoin the collateral layer of the economic system. If you think of the collateral layer of the economic system, it's US treasuries. Then you look at the entire leverage of everything built on top of it, it's much bigger.

53:42So it's the same with this. So that layer over time will outperform. And so just making sure that you have enough of that exposure to capture this$3 trillion to$100 trillion because it's not all going to be Bitcoin. That's actually the hard part. It's actually a little bit difficult to do because just buying ETH doesn't necessarily do it.

54:08But yeah, so the trade is still there. there's still a 30x in the entire market cap of the space, a 33x. That's monstrous. So what does it mean for some of the winning tokens? Not 1 ,000x is all over the place, but it's hard. Yeah, this is what Silicon Valley learned with tech, right? That's applicable with what Wall Street doesn't understand, does they think linearly, and what Silicon Valley understands. Wall Street thinks linear and mean reversion. That's their two things. and then they look at crypto and every time there's a boom and a bust cycle they think it's been reverted when we all know that if you put a nice log chart up it's just actually a pretty smooth trend and then you look at amazon google tesla all of these companies all been the same they're network adoption models and so they're volatile in the early stages and as they become more mature they become less volatile it's exactly the same and silicon valley knows this intuitively that's their entire business model and volatile could be chopping around for five years like east has been doing right yeah but if you expand to maybe 20 or 25 years you'll see that not only it's exponential but that the meat of the growth happens later on so good friend of mine mickey malka who's been on the podcast rivet capital he was an investor seed investor i think in Robinhood.

55:34He's probably the best fintech investor of all time. So he got Robinhood, and it did nothing. They got no traction. Millennials, young people didn't want to trade stocks. Then the pandemic comes, and it goes exponential. I mean, they did have a decent start, but then it kind of plateaued. Then it went like this. Then the GameStop thing came. Mickey had to bail them out because of this collateral call that they had, and had to stick in, you know, it was going to go existentially bust. You turn back, you barely see it in the chart now because it's got like a rocket ship because it requires staying power and understanding that there are potential existential events but if you survive them you have Lindy effect, which means that the business becomes more valuable as a network over time.

56:21You love to say it doesn't matter. There's another guy called Hasib who was on this podcast last year and who was raised in the Silicon Valley and who agrees with you. in an exponential trend, it doesn't really matter. I'm going to steal some of his recent words here for everyone to understand what's probably going on with crypto right now. I believe in the exponential because I've lived it. I've seen it over and over again. You might respond that stablecoin growth might be exponential and that DeFi volumes are exponential, but they don't accrue to EtherSOL. The value doesn't get captured by the chains.

56:57To which answer? You still don't believe in the exponential because the exponential answer is always the same. It doesn't matter where I will favor it, sentence. This stuff is going to be so much bigger than it is today. And when it's absolutely enormous, you'll make it up on scale. That's what exponentials do. When it comes to truly exponential technologies, no matter how big you think it's going to get, it just keeps getting even bigger. This is the thing that Silicon Valley always understood better than Wall Street. Silicon Valley was raised on exponentials while Wall Street was raised on linearity.

57:35And yeah, people will hate me for that word or my accent. Linearity. And over the last few years, crypto center of gravity has migrated from Silicon Valley to Wall Street, which you can feel. Talking about ETH and SOL for example, if you believe in the exponential, if you zoom out, then it's all still cheap. More than anything, I'm arguing to be a believer, not just a believer, but a long-term believer. So what people don't understand, there's a fight going on in X right now about this, and Sieb's part of it. There's the Metcalfe's Law network model people, like myself, Sieb, and then there's others who want to use this kind of cash flows and other analysis to pick up cheap businesses and be the Warren Buffett of crypto.

58:24It has been proven time and time and time again is network models outperform everything you've ever seen before. And it compounds because the more valuable a network is, the more users it brings, the more value it brings onto the network, the more it goes up. And this thing compounds exponentially over time. And people say, we should be valuing Ethereum based on its fees. That doesn't get what it is. This is not a company that earns revenues. This is a network that enables an entire group of businesses to build upon it all sorts of value chains. And how Metcalfe's law works is you capture the total value and the number of people driving that value.

59:09So you get this kind of unit value per person. So you know if you bring a new person onto Ethereum, they're worth$313 ,000. That's currently the math while on solana it's about 65 000 um now it's a bit skewed because the layer twos are accruing as well but basically that's what it is so you kind of know that every new user you bring onto ethereum the value goes up a lot and can go up even more as more people build more businesses on it and people forget that that compounds this kind of cash flows don't compound not in the same way. Maybe another comment to help people think much bigger than now is on Bitcoin, right?

59:56Which is basically zero revenue. So we can't even kind of use that. People can't even argue on that, right? But they discount that then. Then they go, well, it's different. It's different. So our common friend at Bitwise, Matt Hogan, talks about Bitcoin. I asked him a couple of weeks ago, how much bigger could Bitcoin get from here and his answer is very simple Bitcoin is arguably better a better store of value than gold it's worth 2 trillion dollars today gold is worth 25 30 trillion dollars today but 20 years ago gold was worth 3 trillion dollars which means that gold itself went up 10x in the last 20 years right and it's And as we know also, gold is growing rapidly.

1:00:47We've been seeing that the last couple of years. Now, if Bitcoin catches up on gold, that's more than a 10x, right? Bitcoin is worth a million dollars. But gold is going up a lot also. So if Bitcoin catches up to gold, only this part, probably Bitcoin can do more than a 10x. And now, talking about exponentiality, something I didn't really think about before. It's a mix of Avishal and Matt. Adding what happened in terms of exponentiality when Bitcoin, digital gold, is on billions of people's phones and you realize then that no one is thinking big enough. Because when something goes on a phone, I think Avishal was giving you an example of e-commerce.

1:01:33He was saying, hey, look, there was brick and mortar and people were thinking, oh, this e-commerce thing is kind of weird, et cetera. What happened to not only Amazon, but e-commerce in general when it went on a phone, on people's phone, and it went on everyone's people's phone. What happens to the size of that versus brick and mortar? It became gigantic, much bigger than anyone could have imagined. And now they're basically saying, for Bitcoin, it's digital gold. What happens when it goes on everyone's phone? And that's why Avishal, actually, Avishal talked about 5 to 10 million Bitcoin price.

1:02:07Because of this, if it's on everyone's phone, it becomes so exponential. It becomes way bigger than people think. Yeah, because again, Metcalf's Law is the number of users, total value transacted. So if right now we have to open a Coinbase account, we have to do this and we have to do that, fine. It's restricted to whatever the number is. People say there's 650 million wallets right now. Okay, great. Put it on every mobile phone in a simple format, on every Apple wallet or whatever it is, you've suddenly got 5 billion people. They transact the same amount of value per person. Holy shit. I mean, it's really simple once you understand it.

1:02:51So yeah, the more access it is, the more people join it, the more value gets transacted on it. Yeah. Just believe in something, guys. No, but people believe we can't have nice things because they're too short term. So it's like, it's over. It's so so over and we're so back. is such a prevalent mindset that it happens almost on a daily basis. It's so over, we're so back. But people forget this stuff compounds over time because they don't have time horizon. You know, you and I have talked about this almost every time we've ever spoken, and yet people don't listen. I was 10 years old in early 2000s.

1:03:31I was too young to understand. Actually, just before I discovered crypto, I was thinking, I wish there was this new, I wish there was this internet wave happening when I'm at an age where I can invest, right? Goddammit, I missed the thing, blah, blah, blah. And then I discovered crypto, I was like, holy shit, this is the same thing again. But if you think about it, not everyone will make it because of all this mindfuck and noise and all that stuff. Otherwise, everyone would have made it in the internet era, probably. I don't know how it was. Maybe you can tell me, hey it was very similar and if you were able to hold this freaking couple of stocks or whatever you could do really well but people for me the the reason why this podcast exists is that i don't want people to have an excuse to be in 20 years and be like shit i was living and i missed and i was listening to all this stuff and i was investing but i missed it but to show how hard it was is Amazon came out.

1:04:31It's like, we can sell books on the new internet. And suddenly this stock started trading really expensive because it was the internet. And it was like, we can sell books. Maybe they can sell something else. Okay. The stock then falls 95%. It's like, it's so over. And then the market starts recovering and Amazon recovers. and Amazon's making no money at all. And the PE of Amazon keeps going up. And then from like 2014 to like 2018 or 17, it's trading at a PE of 850. Every hedge fund is trying to short it because they didn't see that it could go from a bookseller to being the largest online marketplace, of which it's not just about getting a revenue share of products sold, but it's also all of the businesses that can get built on top.

1:05:35Oh, that sounds like Metcalf's law, doesn't it? And then all the ancillary services, oh, we need to do something with our compute because we have all this compute. We need the cloud. They build AWS. And then, oh, let's create an entire logistics supply chain because they need Amazon warehouse. It's staggering how much value came out of that network. If you value the total network value of all of the business revenues, we only value Amazon really on the percentage of sales that they keep. But what is the total size of the Amazon economy? It's a monster. And no, it was not easy to see that or hold on to it from day one.

1:06:12That's the issue is it was not easy. Microsoft, yeah, that was easy. It was everywhere. But today we have this framework of tech and Silicon Valley with crypto. So it's less hard. It's still not easy. There's so much noise. And there's so much volatility. And it's not just short term, like one to a week, one to a month, sometimes a year or two. And it's painful because it's liquid, right? Yeah, because the VCs didn't have that. They'd get annual mark-to-market, of which half-time was just guessing, so they can lie about the volatility. When anybody knows he's run a startup, it's we're so over, we're so back.

1:06:54It's almost a daily occurrence when you're in a startup. Every day is an existential crisis or you know what, we're all going to be gazillionaires and it's never anywhere, somewhere in the middle of all of that. To wrap up this part, where I gave a bit more of my thoughts and experiences, I wanted to read Chris Bernisky's comment in your latest podcast with him. Compounding wealth over time is a boring exercise. Does that mean that the new ADHD generation is cooked and can't build long-term wealth because their addiction to short-term dopamine leads them to the inevitable financial death wish that perpetual future contracts, online gambling, meme coins, and prediction markets truly are?

1:07:40So when you learned to ride a bike, did you fall off it? Yes. When you learn to ride a bike and you're going over gravel and you put the brake on, you learn very quickly that after a while, the wheel locks up and you fall off your bike. You learn things by experience. Humans learn not to touch fire by touching fire. No matter how much you tell a kid not to touch something hot, they will touch something hot until they understand it. And so we've just onboarded a new generation of investors. They need to make mistakes. but over time they can battle-harden and they learn from their mistakes. We've all learned from our mistakes.

1:08:20So what we can't do is assume because they're wild rampant speculators today, they'll never be wealth compounders. What I do understand is their stake at the casino is pretty small and they don't have the time because they don't have job security over time. I get that. So some elements of casino to get a stake and then compound is justifiable. So it's kind of a mixed bag. And yes, it is boring, but I think once people have made some money and lost it again, they're more careful the second time around. You're the classic example of this. Yeah. And what happened like a month or a month and a half ago, I think, taught hopefully people that leverage always end up the same way for everyone.

1:09:06Yeah. I mean, it does. I told that a million times. It happens all the time. Yeah. All the time. It's leverage, you know, leverage in a 70 % to 90 % volatility asset or more in some of these things is always going to blow up. Every single time. And it will happen again. And again. And again. If you start a band or a choir together. If we don't make it in crypto, maybe we can do that. That's right. you mentioned before sui we talked about concentrated portfolio last time you told me and some people do this as a clip a massively overweight sui what does your portfolio look like today in december 2025 i haven't done a single trade apart from i bought some more sui three weeks ago so i haven't actually done anything not reallocated any assets done nothing yes i've bought some more nfts since i last saw you but that's it so I don't do anything much and people are going to clip this again and say look he's really overweight sweet blah blah blah and then somebody's going to say scammer it's like everybody just fuck off just fuck off my allocation is my business I tell you that I have conviction in something and I ask you and I beg you not to have my risk profile all i'm trying to do is give you truth which is what i'm doing if you ask me i'm asking you not to fuck it up i'm asking you to think about your own risk tolerance and to do your own homework so all of these fucking people who clip podcasts and then try and hang me on it either for good or for bad see he mentioned our token yeah it drives me insane there's so much shit like taken out of context all the time i mean that's how social media works yeah because you will take this swearing clip and put it on i know you will you're looking at it now so there's the money shot and you can all fuck off but it just drives me to despair because you reduce everything down to a soundbite including all markets and everything it's like that's not i I spent so much time communicating, but nobody wants to listen to the full communication.

1:11:29They just want to say, I hate him or I love him. It's like, please don't do any of that. Just say, oh, that was interesting. That kind of, maybe that sparks an idea and I'll listen to somebody else. Oh, that was rude. Okay, you're brute. We forgive you. Tell me your honest thoughts on SWE in late 2025. Because obviously, I mean, everything goes up and down in price and then the sentiment always follows the price. And I'm pretty also active in the, I mean, obviously I own SWE, I'm pretty active in the ecosystem and have some people coming to me and saying, Kevin, what do you think about SWE? I'm like, you guys are in the ecosystem.

1:12:09What's your, I mean, tell me more about what you've seen or researched or talked to that make you still so convinced in late 2025 despite this crazy volatility. Yeah, so it is not acting out of normal versus other tokens where it is on the risk curve. Okay, so that's a signal point. We've noticed that it has over time broadly outperformed Ethan Solana, but in recent times, underperformed. But still within an uptrend, it's been outperforming. It is all on SUI and Miston Labs to prove that this amazing tech, because the tech is unquestionably good, can get adoption. So that's the game we're all playing here.

1:13:03So what does adoption look like? Well, we need users. And they've been accumulating users at a rate of change faster than Solana did in the last time, and faster than most layer ones, rate of change. Because obviously, you're starting small. It's new, but that's when the most gains are made. Then we need to look at this value idea. How much value is being transacted? So have they had the big breakout gaming? Well, they've got the EVE Online thing coming, but it's not online. It's not happened yet. You know, yes, they've had some gaming stuff, but their handset was a mitigated disaster. So, you know, we see them doing things that fail and things that succeed.

1:13:44They put a lot of Bitcoin on chain. that was a big value driver because it's a chunky asset and it gets moved around that adds value to the network. Stablecoins have worked well on SUI and are growing very fast. DeFi, somewhere in the middle. So it's still patchy because it's early. Think about it. They've only been marketing this to the general world for three years, of which maybe two and a half, really, that people start getting noticed. So it's very early in the stage of the business. But when I break it all down and put the model into ChatGPT and my other analysis, and then check it against somebody like Jamie Cootes, who's the chief crypto analyst at Real Vision, we both come up with the same answer.

1:14:30If you're using Metcalfe's law and adoption models, and you're careful not to get gained by active users and stuff like that, so you're really cautious, it's about 80 % undervalued versus Solana. So my model is saying it's very undervalued. Does it have to trade at Solana parity in terms of users? Not really, but it's just saying it has convexity to the upside. So then we need the market to rise and start breaking higher. And then we can see, is Sui doing what I expect it to do? And are they going to get more adoption and more activity? So it's still yet to be proven, but so far the metrics are showing As a layer one, their rate of change is faster than everybody else's, and they're occurring considerable value per proven active user.

1:15:22So the majority of your thesis is based on models and data? Yes, and technical analysis. And yeah, it's basically that. How do you ensure in crypto, this is not a three-specific question, but in crypto that the data is correct, that the data that your model uses is correct? You can't. And so what you try and do is be consistent amongst your analysis. So the way that you measure active users in Sui is the same for Solana, is the same for Ethereum, is the same for Bitcoin, whatever it is you're looking at. And so that work suggested that Avalanche, Nier, and Sui were pretty cheap. and if you think about it makes kind of sense they're all seeing quite a lot of activity they're seeing new things happen and they're seeing some scale kind of makes sense you have some insight uh as to where these users come from who are these users i don't really know um usually it's from web3 itself so people like you and me we've come across to a new chain we'll open a wallet and we'll do some stuff and we'll play around in defy and we you know whatever so we're now an active user um so a lot of it's that and then you know whenever you get a breakthrough that allows people to onboard from web 2 into web 3 it might be gaming suddenly you become an active user now a gaming user you might be using blockchain rails doesn't actually drive a lot of value because they're doing small transactions.

1:17:00So you need a gazillion small transactions to create value versus that user. So those users aren't actually super valuable. What you really want is what Bitcoin has, which is quite a lot of users transacting large-scale value, particularly when you've got a super cluster, like a sovereign wealth fund who can own, or Michael Saylor. Michael Saylor is a great example, a super cluster that has a gazillion dollars of Bitcoin and it's one user. You know, that kind of thing is what you want to get to. Last time we talked, you said you have to be paranoid at all times. And I really have this thing, obviously since the Luna experience, but not only about price going to zero, it's more even the whole Luna thing was based on the UST, right?

1:17:52Terra stable coin. and there was some protocol, Chia or something in South Korea. And it was kind of proven afterwards that all these numbers were faked. And so for me, that's always this. Now I'm like, whatever the price or whatever an asset, but I'm always thinking, I don't trust any freaking numbers I see in crypto. Yeah. Because it's also such a... Everything's game. Everything's game. Whatever. I mean, Twitter, follower, engagement. This is like very basic thing, but you're like, come on, really? And then, but then all this thing can be game so easily to raise these hundreds of millions of dollars.

1:18:33And then the whole thing is completely inflated from the beginning. So one thing that I filter for is persistence of active users. Because I saw it with the Siri Foundation. We had some games on Telegram that, was it in Telegram? No, whatever it was, some games. and basically they were just gaming the system and so not the sui foundation was but the people building these games because they just ran people through this pipe they use the game for a while and then disappear so they're not actual active users but it looks good and it's like we don't want that kind of bullshit activity so we kind of got rid of it um so you can see that but it's really hard to persist with because you run out of money so it's a very expensive thing to game So eventually people run out of money.

1:19:20So if you see it's persistent, it means it's probably more likely to be real. So what you're saying is that the protocols building on a chain have obviously an incentive to fake things, to raise money, et cetera. What I'm thinking is also probably some foundations, I don't know who, right, but have an incentive, because it's all such a game of token price go up. They want the number to go up. Yeah, they want the number to go up. And so this is why, and you're right. So the numbers we don't know, we look for some metric, which is comparable. We look for some persistence. We look for some explainability.

1:20:03So that's your smell chest is, can I explain these users? Then after that, it's like, what do the fucking charts say? Because if in doubt, the chart tells you something. How do you look at a chart? Well, you really should look at it on its own first, the long-term trend, the short-term trend, short meaning daily charts, but out to weekly and monthly in log charts, and then look at the asset versus other assets to know is it really doing something different? And there's usually a signal in that, that, hey, something is not working here. Now, it could be intermediate noise or it could be more meaningful.

1:20:43and so look there's a lot to do for people but they have to do it because you won't know if you're further out the risk curve your job is to be utterly paranoid at all times that your asset allocation is going to actively destroy your wealth or underperform and so you need to be paranoid and ask yourself the question am i wrong absolutely we talked about generating income before business is obviously one of the best ways it's still very underrated especially in this world and also me through going, I mean, I've been running businesses since 10 years now. The first one was pretty good, but just like consulting business, making cash is never like amazing.

1:21:20This one is actually pretty amazing. And you start to realize my life really changes in terms of how I can see things and invest and all that stuff because I'm generating more income. Sounds so stupid, right? But the people still, because it's so hard to generate income, obviously, they still think I need to gamble, gamble, right? you generate income every month. What are you doing with the money that you generate every month with your businesses? I want to step back from that question first. You don't realize how lucky you are doing what you do or what I do. And the reason being is we have a job where we invest our time and get paid.

1:22:02Okay, great. That's all jobs. What you're actually getting paid to do is build a network, which is like the single most valuable thing a human can do. And you're actually getting positive cash flow from building a network. Even though you have to bust your balls by traveling around the world, getting ill all the time and not having a girlfriend because you're lying that you've got a girlfriend. But this thing is building you a network where you can chat to Hunter Horsley. You can call Hasib. You can call whoever. You've met Brian Armstrong. That's value. the value is not in the revenues you're building from this business it's in what that network can provide or you can provide to that network more importantly because you always give more to a network than you take out because if you extract it's over I have to add something on top of that because I started to realize recently most people think with reason that podcasting is not a serious job I completely agree with it but I was telling them, actually, it's a, you're doing four or five things, key things all at once.

1:23:15You're building your network. That's one of the things. You're generating money. That's one of the things. You're doing, every time you release a podcast, you're doing marketing indirectly. It's a product, but it's also your marketing that other people say, can I come on your podcast? Can I be a sponsor, et cetera? The guest is saying, I want to sponsor your podcast. So at the same time as you're doing this thing where you talk to them, you're basically building a network, but also selling and also getting a kind of client. And at the same time as you do all this stuff, if you do some clips and all that stuff, you're building your personal brand.

1:23:53It's fucking incredible. And then you have somebody on Twitter saying he's a fucking moron. I can't understand him. That's your award. I'll take it. I'll take it. It's kind of amazing to be honest. I still don't understand. Well, I mean, you and I have talked about this in the past. Stephen Bartlett has proven that. Joe Rogan was more successful to start with anyway. But Stephen Bartlett has been an amazing example of that. And we're seeing a rise of a bunch of these tech podcasters out of nowhere who suddenly, you know, Dwarakash came out of nowhere, is now huge. And they build enormous networks.

1:24:27I mean, last time I searched for Stephen Bartlett, he was like the investment opportunity he's had from just having guests on and that they've reached out to him and say, hey, listen, Stephen, you might be interested in this or whatever. It's like, it's amazing. Yeah. And the other thing we've talked about in an AI world, human-to-human connection is massive. I think one of the reasons your podcast does well is so few of us have the time and the ability or the youth, frankly, to travel around the world. And I've done it. When we started Real Vision, it was all like this. And we stopped doing it because I just didn't have the time.

1:25:01But you have it. So you've got this difference, which is this personal interaction, and then you're building a network based on personal interactions. That is a moat in a real world, is in a world of AI, a world of us living digitally, the fact that you're building a human connection, which is why people say to you, hey, can I sponsor your podcast? Because I've just been on it. That's it. It makes the whole difference. Yeah, if not, you're speaking to the chief marketing officer. They're like, oh, join the list. What's your pay-per-click? And what's the... It's like bullshit. Yeah. When the guy, you get the right guy on, he's like, I really like how you do this.

1:25:35You know, can I, can I sponsor it? It's like, yeah, thank you. That's what happens with, with literally everyone. Yeah. We never reach out. No. Never. No. And I was thinking about that a couple of weeks ago. I was two, three weeks ago. I was in Sequence Valley with Brian Armstrong, the freaking founder of Coinbase. And I haven't been able to get Brian's interview. So I'm, I was pissed with you. Never? Sorry? You never had him on? No. Wow. Okay. Interesting. Well, maybe I can help. Hopefully.

1:26:07And I was thinking, I'm in a studio with Brian Armstrong for two hours. This is never going to happen online, right? It's not going to take two hours. It makes no sense. It will not happen if you went to his office either. His secretary will give you like 15 minutes, half an hour. Of two hours where he's opening up to you. Yeah. creates a whole different interaction. Yeah, it's insane. It's absolutely insane. It makes no sense. Every time I think about it, it makes no sense. But whatever. I'll still... Sometimes you don't have to think too much. You just go for it. You do the thing. Yeah. That's it.

1:26:46So I was asking, you're generating some money every month. What do you do with this money? You said, okay, I bought some sweet a couple of weeks ago. Cash flow goes into investment, lifestyle, costs it's the same as everything um but investment three these other stuff outside of crypto digital art i mean okay so mostly mostly huge amount of digital art you know over over cycle as your number goes up a bit you want to recycle stuff so you buy new stuff that you want to change stereo your car or whatever you know so you do that to keep your because if not the quality of your possessions goes down over time because cars break, they get old, they get frustrating, they keep getting fixed.

1:27:35So you do a lot of those kinds of things. So there's a lot of that of just kind of keeping the quality of your asset base high. A lot of travel, you know, I like spending on holidays and traveling. So that's quality of life. The quality of life is an investment. It gives you experiences. So there's a lot of that. It's mainly quality of life, investing it and then servicing liabilities. At least you laugh about it. What can you do? What can you do? Servicing liability. You mentioned digital art, aka NFTs. We have to talk about it a little bit. What's happening with NFTs? Well, as we speak, Art Basel is on and half of the digital art market is there.

1:28:28although a lot of the art that they're actually doing is not digital. What's been happening is as soon as ETH or Solana go to the top end of their range, sales start exploding again because people start recycling wealth. As it goes back to the bottom of the range, nobody's got any money to buy stuff because the opportunity cost of taking your liquid to put it into illiquid assets has gone down. But the thesis shows every time when you get to the top of the range, art becomes the thing and we start setting record prices you know we've started to see some very big investors in the space nikki malca from ribbit capital bought the punks ip crypto punks ip and has built a huge collection under canvas and is building a exhibition space permanent exhibition space in palo alto called the node and it's it's a foundation to show off digital art in front of everybody coming out of Stanford and in Silicon Valley.

1:29:25We've got other investors like Alan Howard, huge investor in this, and we're seeing more and more big investors coming in to the space building large collections. So we are seeing the value of the art overall go up, but it still moves up and down with crypto prices. So even if you price it in ETH, as soon as the ETH economy is weak, people just don't have money to spend. So the prices dribble down a bit. But over time, it tends to outperform. So yeah, it's still very active. And there's a lot more that's going to come out of this space. Huge. Yatsu, the co-founder of Animoca, was on your podcast recently.

1:30:04He said NFTs are the asset class of this generation. I think most people would be like, what the fuck? Is he coping? Is he in denial? Or, I'm asking, does he understand something that most people still don't understand? Yeah. Everybody just thinks NFTs, monkey JPEGs all went down in value. What a stupid speculative bullshit. People don't realize that crypto hyper accelerates the testing of an idea via speculation. And speculation proved that digital assets have value outside of being the token of the exchange. So we've got CryptoPunks that in total were worth$10 billion as a collection. It's the single most valuable piece of art that's been fractionalized.

1:30:59$10 billion.

1:31:03What people fail to understand is we're proving other things with it. Pudgy Penguin is IP. Can IP go on chain? ID. Crypto punks, look who's got them. Jay-Z's profile pic on X is a crypto punk. You know, I know a lot of people who've bought punks. Blad, Tenef owns a punk. A lot of people own this stuff. Mickey Malka owns punks and has a punk. So it's a social signaling digital ID, online ID for a digital world. So, okay, we're proving some stuff out. The next thing is all of the gaming world assets are basically non-fungible tokens or non-fungible contracts. So that means they're all going to be NFTs.

1:31:58So the scale of gaming is vast. We know that. It's just not happened at scale yet. But it's so fucking obvious that people want the actual value of their assets they're collecting game. But it's more than that. It's every single contract is going to be digitized and turned into an NFT. So that's the whole finance sector. Basically, every single option is a contract. And you can embed the exercise rights and everything into the contract. Every ticket that we have, sports ticket, music ticket, is a contract. Now, if that NFT, if that becomes an NFT, then it accrue value for loyalty and stuff like this.

1:32:43We've talked about in the past where Taylor Swift or Dallas Cowboys, whoever can accumulate, holders of the NFTs can accumulate value by going to games and buying merch and all of this stuff. And they may decide to sell that NFT later and somebody else can take all that value or they can use that value for other things. So we've got the finance sector, every option, for example. That could be an NFT. We've got all of tickets where there's a consumer and a brand relationship. There is culture and those relationships between artist or team and fan. And the assets held within a game. And then we've got the art market itself.

1:33:25Okay, that's a big TAM, a very big TAM. What is digital ID? It's a non-fungible contract or token or proof. So every single person's digital ID will be zero knowledge proof NFT.

1:33:48I'm trying to think about, so first of all, this is taking a lot of time, right? And it's probably take, if we have to think about the long-term trend just for Sol or ETH, NFT thing is like probably even longer. but second if you really believe all this stuff this means that these things will bring so much value onto those chains that it's a no-brainer for the underlying change themselves again people really don't understand this stuff because they want to hear a narrative you know it's all bullshit people's everydays that sold for 69 million dollars is the single most valuable piece of block space that exists.

1:34:30It's a single piece of block space that holds the NFT. And there's a lot of that in art. It's going to be the most valuable block space that ever exists. Because it's stored. The property transaction is not stored there, the title deeds are. With these things, many of them are just, well, some of them are stored in AWS or whatever, but without the NFT, it doesn't exist. And so I think some of the most valuable things ever to be stored there, what it's proving is in a increasingly digital world, everything can go zero in value. AI is going to prove that for knowledge. AI is going to, robots are going to prove it for labor.

1:35:11Everything is going to zero. So in that world, digital scarcity maintains value. It's a very big deal.

1:35:26bullish punks i'm gonna hold my punks yeah i mean and my penguins and my grifter yeah and because over time you know we've talked about this wealth flows upstream upstream of all wealth is art it is always the case always will be the case people don't get it it's a bullshit token but the signal is there you're seeing it you're seeing the value of these transactions the types of people collecting it's not speculative it's the opposite of speculative now it's thoughtful collection building the people are building collections now are going to be building collections worth hundreds of millions of dollars and they will have spent a lot less than that it's not speculative but the volatility is insane like i look at none of us look at it yeah actually yeah we don't look at it do you look at your punks every day well i never look at it but i bought two kind of like uh at the kind of bottom like 2023 or four i remember yeah it's not exact bottom obviously and then it went to like 200k or whatever and then i checked just randomly the other day after a couple of months and it was down back to whatever 70 or 80 i have no idea i was like holy shit this is this is moving a lot what i don't do is price it in dollars just look at the ETH value and occasionally you might benchmark punks against Bitcoin I'm actually doing that I was like oh now it's worth two Bitcoin oh now it's worth less than one Bitcoin and maybe there's informational value in that but really it's scarcer than Bitcoin but less demand so it's not a perfect thing but I think none of us who buy this art sells it anymore it's really interesting so what happens it just keeps going stored away into these vaults and the signal is the people who are buying these punks for example you're telling me hey look jay-z hey look vlad hey look raul hey look i'm kind of the only tourist in there literally but literally you like these guys will never freaking sell this thing like never no and so over time you get this redistribution of people who own a lot early, like we're seeing in Bitcoin now, and then they sell out.

1:37:43The distribution base widens. And really in the end, when punks are maximally valuable is when there's 10 ,000 punks holders. And we all think our punk is us. That's when it's maximally valuable. There's been really interesting things like an X copy. There's one of ones that have sold for a lot, but they're very illiquid because you need a lot of money, and nobody's got enough money right now because crypto prices aren't high enough. But there's two assets. One is called Last Selfie, and one is called Mortal. These are one of tens. So there's 10 of those. And what we found is these have gone up faster in price to crazy valuations because you have a one in 10 chance of trying to get somebody to sell you one.

1:38:29The one of one of the X copy, you can't get. The one seller doesn't want to sell it to you, you pretty much can't sell it. and a lot of these people don't give a shit about how much you offer them but when you've got a one in ten chance to get one of these things it's driven prices insane in some of these things um so and these are from long-term collectors in early november you tweeted a long tweet so i'll give the tldr here too long didn't read but i read it obviously I know no one wants to hear bullish ideas and everyone is scared and wants to fling poo at each other the monkeys flinging poo but the road to Valhalla is getting very close then you explain a bunch of liquidity and macro stuff and end up saying buy the fucking dip if you can when this number goes up you're referring to the total liquidity index all numbers go up is your advice in December 2025 five still to buy the fucking dip.

1:39:32Yeah. And I think we had the final low. So we had the October liquidation. So liquidity got withdrawn by the US government, by the Treasury General account. We had an air pocket of liquidity from that. And then they shut down the government. And then now there's no liquidity because they can't even spend the TGA. So what happened was crypto being the most liquidity sensitive, nuked and exposed all the weaknesses of leverage that you and I know so well, the whole thing nukes and it triggers this, you know, issues with how the system calculates leverage and stuff. Okay, fine. We rally back. We've come back down.

1:40:13We've kind of, some of them went through it. Some of them didn't go back through that low, but we're kind of basing around those levels. And then suddenly out of nowhere today, you know, things are up 20%, 30 % in a day. And you're like, okay, the signal is probably there. So the dip zone, again, nobody needs to buy the absolute bottom. But that dip zone has been forming from November, because after October, we had the November pullback. And then into the end of November, we had the final sell-off. And somewhere here, it feels like it's there. Now, looking forwards, if I'm right in all of the work that I do about liquidity, we've got a flood of liquidity coming.

1:40:57So right now, the system is telling us the banking system is constrained, and it keeps causing spikes in money market stuff. There's not enough money around. The Fed know it. They stopped QT. Okay, one job done. But the other job is they've got to get through year-end funding. There's not enough liquidity for the banks to roll their debts and to do their balance sheet work. So the Fed are going to have to inject some liquidity. It'll be some three-letter acronym based in the repo market or whatever, but they have to do it. But they made a huge announcement, most people don't understand, which is the ESLR, another nice acronym.

1:41:42And the supplementary leverage ratio means nothing. They never do these things. What they basically said is what we used to say, US Treasuries carry this much risk, and so on your balance sheet we're going to penalize you for holding them but then the less risky asset so they've got this tug of war with the banks of what they want to do and they've just said you know what we're going to shrink how much risk you have to put on your balance sheet by owning treasuries what does that mean means the banks will buy a lot of treasuries which is what the government needs to do sell treasuries that's their job right now So the banks can use treasuries.

1:42:20You're hearing Scott Besson saying, we want the money to flow to Main Street and not just Wall Street. What he's saying is, we don't want the central bank to do QE. Every moron on Twitter goes, see, they're tightening. They don't want anything. What they're saying is, and we're going to let the treasury print money instead and stuff it down the next of the banking system. And the banks, being so good at what they do, lever it up and lend it out or provide liquidity. So the entire apparatus of managing the debts is moving from the Fed to the government. So the government creates its own buyer for its own treasuries.

1:43:07It's an easier way to debase currency. But the ESLR changes are important because the system screwed up because of these changes after the financial crisis. So that was announced, rushed through, because I'd been writing about it. And I was like, they'll announce it sometime in Jan, Feb, that they're going to implement it. No, came through straight out, done. We've agreed it with the banks. We're doing it January 1st. I'm like, wow. So that tells you they understand the game. The moment it was announced, and Steve Mirren had been pushing this thing through, the moment it was announced, Steve Mirren published another paper that day and said, good job, not enough.

1:43:45We need to reduce all risk waiting on treasuries. So 100 % no risk for treasuries. So now there's an unlimited purchasing of bonds that can happen when needed. And you can really expand the money supply. And that, because it's credit, ends up going to ordinary people. They also buy more bonds, which lowers the long end of the bond market, which lowers the mortgage rates, lowers the government funding. It's a big deal. We're talking, this is going to end up being$3 to$4 trillion, maybe$3 to$5 trillion of extra liquidity. Oh, and then we've got rate cuts. Oh, and then on top of that, we've got$1.5 trillion probably in directs.

1:44:32banking system deposits coming out of the new stimulus. I mean, don't forget, every single service worker in America gets paid on tips. They're all zero tax. So you're freeing up a ton of disposable income, mortgage rates come down, all of that. So that unleashes the business cycle. So you've got a lot of liquidity things happening all at the same time. In the middle of that, you've got the Clarity Act, whether it comes end of this year or by mid-Jan, it's coming. And that allows everybody to use crypto because it will have been defined on how to use it. So we've got an extraordinarily powerful year ahead of us.

1:45:11We've had to go through the hard part, which is this liquidity squeeze, but that will give us what we want going forwards. We then get the explosion of stable coins. The explosion of stable coins allow the government to issue more bonds because we've got these new holders who could be anybody in any country now are basically owning government bonds via stable coins so the money is coming to roll the 10 trillion of debt meanwhile the chinese are printing money their balance sheet's increasing the japanese are doing massive fiscal stimulus and so the game is on i forgot one thing before when we mentioned why podcasting is so amazing you learn and you build conviction yeah literally unless i'm totally fucking wrong maybe but i but i gather data from different people yeah and i can build my own mind right yeah so to go back to you know i always read what um hunter and matt talk about and they're like it cut you know hunter's been around the crypto cycle for a long time he's not saying it's the end of the cycle nor is matt they're like from what we see yeah we've got massive amounts of demand that's working through the pipe.

1:46:25And so when you play with that and then you think of, okay, the liquidity analysis and all of the things you like, okay, probability is it's not over. Another insider info I have from Bitwise, right? Matt and Hunter is they want to renew the sponsorship for 2026, the whole year, and they want to go much bigger. Yeah. And for me, I was always thinking, this podcast is probably going to be in trouble in the bear market, right? So either it means that this podcast is so amazing that I can partner with the big teams that don't care about bear markets. Maybe, but as a Swiss I am, maybe not, right? I'm like, okay, whatever.

1:47:06Or these people are still bullish. Yeah, speak to the team at Coinbase. Speak to any of these people. I don't see any of these people saying it's all over. They're all saying it's all coming. Because don't forget, if you're at Coinbase, you know the pipelines of institutions who are going to use your rails to tokenize. If you're Bitwise, you know what the RIAs are thinking, the endowments are thinking, the pension plans are thinking. You know the lead time it takes. It takes a long time, but they can see visibility of their pipeline. They know how price-sensitive those people are so they can weight the probabilities of who their customers are going to be.

1:47:44And Coinbase can do the same. We haven't had the Clarity Act yet. Once that comes, it kind of is like, okay, it's now free reign. So as a recap of what we talk about today, how do I make it in crypto in 2026? Hold the right assets and do nothing. And don't rent conviction from people. Do your own work and then you'll find your own conviction. And that's a really important thing. and don't look for a low price in terms of unit cost and then find an echo chamber of narrative that comes around that. We've all done that in the past. Just openly look at the space and say, how much risk am I prepared to take?

1:48:32What is my goal here? Am I trying to compound wealth or am I trying to get my starter pack of money to play the casino with? I get that speculative side. but you can do it in a smarter way and just have a time horizon that is realistic. And looking at it three months, one month, nine months, one year still doesn't make sense. My entire thesis is the length of the cycle. I think the length of this cycle is five years. I changed my view. I thought it was going to be four years, but my forward-looking indicators kept pushing out. I'm like, why is this happening? And then I realized the debt. And so five years is my time horizon.

1:49:11Everything else is just fucking noise. What's one thing that you're holding on to, but you know that you should let go of?

1:49:26Well, that can be a psychological question or an asset question. Let's talk about Raoul as a person.

1:49:41I think you hold on to the idea that you can help as many people as possible. But you have to let go of that because some people don't want to be helped. And it's really frustrating. And you're trying to do the same thing yourself. I see it in your tweets all the time. You're desperately trying to anchor people on, look, I want you to make this. but people are trying their hardest not to do it and are trying to communicate, communicate, communicate. And we go back to the getting attacked online because people don't listen to what you're talking about. They don't actually even listen to the long two-hour interview you've done.

1:50:24They don't actually read any of the research, even when you make it public. They don't do it. And you're like, I'm trying so hard to help, but you realize in the end you can't help everybody because people just don't want to be helped. So I have to let go of that because it kind of, it's painful because you really, really want to help people. How do you do that? How do you let go of it?

1:50:49I think the 80-20 rule, you just have to help as many people as you can and realize that, you know, and it's hard because you have to deal with this online hate stuff, which, yeah, you can try and have a shield up, pretend you don't see it, But in the end, it's like, why that's happening? Why are they angry? That's what you ask the question. Not necessarily directed at me, but why are people angry? And you realize it's because they're not making it. And you have to realize you can't put everybody on the lifeboat. You'd like to, but you can't. What does the voice in your head tell you every morning when you wake up and every night when you go to sleep?

1:51:38keep going. I mean, it's like my job is to live in the future and I live in the future and I just see the path of that, of what it is you want out of your life. So really it tells you just keep going and don't worry about stuff as much. I've learned to worry less about who upset me, what happened at work that day, you know, all of this stuff to realize most of it doesn't matter. You know, is it directionally going where you want it to go? I mean, obviously we all wake up every morning going, how much is crypto down today? To be honest, last couple of weeks I didn't even look anymore. No, everybody stopped looking.

1:52:14It's funny. Everyone stopped looking and Twitter even stopped mentioning prices. They're just like, fuck it. It's so over, we're not even going to bother. And you get used to that. But just always keep focused. It's exactly the same thing with the crypto bet. If I think it's going to$100 trillion, focus on that. Not about the suey full 30 % in the last week, I don't fucking care unless my entire asset allocation is wrong. Did Solana go down? Whatever it is, these are great assets and you just want to keep your eye on that. It probably wasn't the best Thanksgiving for Crypto Bros. this year. Luckily I'm not an American so I don't have to do that.

1:52:58Thank you Raul for another amazing conversation. There are some guests with whom the vibes aren't that great. I actually have one that is a pretty big crypto guy. Oh, really? The vibe, I'm not going to mention who it is. He probably hates French people. He doesn't realize you're Swiss, but... I just feel like he doesn't, he never really wants to be there. But anyway, the connection is just not there. Maybe he thinks I'm dumb. Maybe I'm dumb. I don't know. It's just weird. And then there's other people with whom the connection and the vibe are just almost perfect and you're definitely one of those, one of my favorite guests.

1:53:31Thank you so much for putting yourself out there in the good times when people call you the man, the myth, the legend and in the bad times when people call you a moron wow he's always there it's so over we're so back that's the endless cycle even for me online it's like he's a hero he's a zero it's gonna happen again and again oh yeah there are many people who love you for your candor and for being so real and i'm definitely one of them but from me and from the entire when shift happens audience thank you so much for doing this it was a blast as usual it's always good fun i really enjoy these i've got to be your most repeated guest now i think this is probably it's the fourth time twice a year is great it's perfect thank you so much yeah thank you i enjoyed it as ever as you probably know by now i host some of the biggest name in bitcoin and crypto on my podcast but a lot of the best stuff never makes it on air the shift newsletter is where i share that raw behind the scene alpha the insights stories and lessons straight from my guests that you won't here anywhere else.

1:54:35If you want the real inside take on Bitcoin and crypto, join my newsletter, The Shift, in the description down below.