If You Want To Get Rich, Hold Bitcoin - Haseeb Qureshi, Dragonfly Managing Partner | E177

26:52The right decision was stay in the market, hold on to these assets, and bet on things you believe in for the long run. And there was a good period of 2018 to 2020 until COVID that nothing was happening. There was no price action. There was no recovery. There was no like, oh, everything's going to be okay. It was just darkness, right? Now, in that darkness, there was a little bit of light. You could see DeFi was just starting And MakerDAO was getting a compound, was starting to form. You could see things were happening, but they're all small. They're all tiny. Everything was subscale. It was all just these kind of weirdos in their proverbial garages making little knickknacks to show each other.

27:32But crypto was a place where you had to believe. You had to have a long-term belief that there was something much bigger that was coming than what you could see then. That required you to believe in the exponential. to believe that this technology was going to affect more than just 100 ,000 people, which is maybe who was using the blockchain at that time. Now, in retrospect, you look back at that and you're like, oh, it shouldn't have been obvious. It wasn't obvious. No, it wasn't obvious. None of this stuff was obvious at the time. And if you go then to 2022 after FTX collapse, same thing. What would have caused you to step in and to buy these assets after this enormous wipeout that we saw from the FTX collapse?

28:14or Bitcoin going all the way down below 20K again? And the answer is, again, the same thing, is that you had to have believed in the exponential, that all this stuff was going to become much bigger. At that time, it was unthinkable to tell somebody that I think the US government is going to be buying Bitcoin. You said that after Sam drove the entire industry into the ground. At the time, we were literally wondering, is the US going to ban crypto because of how egregious this collapses? right like when you are as connected and powerful as sbf was and you turn out to be a generational charlatan like there's gonna be hell to play and we didn't know what was gonna happen and so from that like what what is going to get you to believe in this stuff and to do the right thing was to just stay in the market this is just hold on to these assets and keep going right again and again and again in my time in this industry, there have been these dark moments, these dark nights of the soul.

29:16You have to look inside, you have to ask yourself, why do I actually believe this? Why do I actually believe this? Because everything is moving against me. The entire universe is conspiring to say, Hasib, you're an idiot. Get the hell out of these assets. This was a mistake. And you have to believe that something much bigger, much longer term is happening, of which this is one temporary snapshot. If you don't believe that, then you would have made the wrong decision in every single one of those moments. And so, you know, one thing, I used to be a professional poker player. One thing you learn in poker is that it's not about how you play every hand.

29:55You can't win every hand. It doesn't matter if you're the best player in the world against the worst player in the world, you're still not going to win every hand. You can't make these decisions on a hand-by-hand basis. You have to think in terms of strategies. How is my strategy going to win against his strategy? In the same way, you can't choose to make the right decision to always buy low and always sell high. You can try, but you're not going to nail it every single time. All you can choose is the strategy. And the strategy, to me, in my mind, is to believe in the exponential and to understand that crypto is going to be much, much bigger in 10 years than it is today.

30:31In the same way, 10 years ago, it was much bigger than it was when Bitcoin was first created in 2008. So that's why I think it's so important to believe in the exponential and to frame what's happening as much bigger than what it looks like at any given time. Quick shout outs to our legendary long-term WhenShift happens partners, without whom none of this would be possible. Thank you to Cast, my go-to global money app to store, earn, move, and spend stable coins across 170 plus countries directly with Apple Pay or a physical card. On top of that, I can also get paid in USD and Euro with my Cast virtual account.

31:13Use my promo code SHIFT, S-H-I-F-T, and my link below to get 10 % off your membership, earn up to 3 % instant USD cashback on every card spend, and get up to$250 in cash for referring your friends. No banks, no borders, just money that moves with you with stable cash rewards. In hindsight, it looks obvious, right? But it was not. it was not obvious now we have another kind of feeling but it's probably similar to that

31:51we feel like I would say the majority of people think like

31:58what's the juice left all these people they made all this money who believed but actually it's very only a few because most people didn't stay right yep

32:12and then we have Trump and US government and institutions and all that stuff. So you might think, oh shit, I missed it. And what's like, it's kind of a similar, it's different, but it's a similar feeling as I don't believe in this thing eight, 10 years ago, right? It's not possible. Now it's like, it's too late. Yeah, yeah. How do you, what's the juice left? how do you see much bigger than where we're at now, which is so much bigger than where we were at four, eight, ten years ago? I mean, just look at how few institutions actually own any of this stuff. You know, like, look, we're a big VC fund.

33:06We manage a lot of assets. We have a lot of institutional LPs. they invest in our funds. So we talk to them. We get to know them. We understand what is their crypto exposure. What are they actually doing in the space? And the answer for most of them is nothing. They have zero exposure. Now for the ones who invest in us, they have some exposure. They get their exposure through us or through some of the other managers that they invest into. And for them, it's maybe 1%, less than 1 % of their portfolios that they have in crypto. If you look at the wealth managers, I think it was recently Morgan Stanley announced that they were starting to approve their wealth management division recommending digital assets to consumers.

33:45Not consumers, sorry. Their high net worth clients. And there, their recommendation again was like multiple percents of your portfolio should be in digital assets. And up until basically 10 minutes ago, the advice from every single wealth manager is this is not investable. Don't touch this. If you are going out and buying crypto, you're on your own. We're not going to help you do that because we haven't approved it. Our management has not said that this is okay. We are still in the early innings of how institutions and how the institutional asset management universe embraces crypto, right? It was just, what was it, like November, December, that Vanguard, which is the largest ETF provider in the US, just approved the Bitcoin ETFs.

34:31You know, that's the Bitcoin ETF. That's IBIT. That's BlackRock. Literally a BlackRock product. Like Vanguard said, they're not ready to approve it yet. So all of this stuff is still early in how institutions are going to adopt this. And the other thing to understand is that so much of crypto is generational. Right? Generational. What do I mean by generational? If you look in Congress, U.S. Congress, what do you think is the biggest predictor? If you go back, go back to before Trump was elected. If you remember, actually, the FIT21, the predecessor to the Clarity Act, it actually passed the House.

35:07and it got stuck in the Senate. But it passed the House, which is very surprising. People did not expect it to pass the House. Passed the House, and people said, yes, crypto should be regulated. Okay? Do you know what the biggest predictor was of who voted in favor of the act? The age. Age. It was not party. It was age. Age is the number one predictor. And it's exactly what your intuition tells you, is that old people don't know what the hell's going on. They don't know what crypto is. They find it scary. they heard about in the news and their kids are the ones who are using crypto. And so as Congress as the institutions of power as the people who are managing the money the pools of capital as they get younger because of this generational transfer or maybe not get younger.

35:55They don't get younger but it's the new generation. Right, the new generation. The new generation, right? There's a generational handover. The baby boomers, they age out they hand off to the next generation. and that next generation, like think about, you know, when I was in college, Bitcoin was still pretty new. People who are entering college now, they don't remember a time before Bitcoin existed. Bitcoin's 18 years old. And you think about Ethereum, same thing, right? If you're 20 and you're in college, then Ethereum was created when you were 10 years old. You know, I didn't know anything about finance when I was 10 years old.

36:31And so like when you come of age, already Ethereum and smart contracts and stable coins, they're already part of the world. Of course they're a thing. And so, so much of this is just allowing society to change and it takes time because money is deeply, deeply personal. It's something that's very difficult to change people's intuitions about, especially if they themselves refuse to try it. So one thing you see very clearly in Congress is that these Congress people, they don't understand what the stuff is they hear about it they read about it their kids tell them stuff that's it that's all the exposure that they have they're not going to try they don't have time they're too old you know they have other things going on i think a decent analogy would be the cloud shift right the shift to cloud yeah especially for enterprises where i mean if you're in silicon valley like everything happen much faster everything comes from there right yeah but i'm swiss i built my first company in 2015 and we we still do uh data analytics and it was always it was the microsoft was pushing all this cloud stuff right and 2015 to 2016 and i was doing that in uh in in uh london and in switzerland and you could london was kind of starting depending on the industry like oh we we can kind of try this cloud stuff.

37:51It's kind of scary. Our data will not be in our buildings, blah, blah, blah. We cannot have our security taking care of our servers, all that stuff. We don't know where it is. It's written and he was like, forget it, forget it. And I remember even having some discussion with my dad who had like a really good role in a big company. He was like, no chance this happens. And I was like, one day when the new generation will be the CEO or the CFO, it's just going to be normal, right? And now here we are, like, except some very specific industries in some specific countries, like, who is still on premise?

38:33Like, all these companies, they were kind of forced to move to the cloud because it's so much better. That's right. Because it's so much better and because new generations of C-level people just made this decision, obviously. obviously we're going to go this thing that we can rent by storage we need instead of getting an entire data center it makes no sense right but it took 5-10 years and this is just kind of niche right kind of cloud stuff whereas here we're talking about money which is something that affects everyone even people who don't work yet right yep I think for Bitcoin, it's the most obvious is that like the idea that people really have this deep attachment to gold.

39:22You know, people always talk about, oh, you know, gold, it's so many millennia old. You can never displace that. It's so Lindy. I think they overstate this. I think they overstate this. I think that like, you know, when I think about like my mother, I think about my grandmother, like, yes, they are always going to feel the way they feel about gold. but take a young person right for a young person like their sense of what's valuable is already digital right why why do you think that like yeah a rock painstakingly drilled out of the earth somewhere really far away is more valuable than something that's digital right say why and uh you talk i mean to say nothing of things like you know asteroid mining right spacex is about to go public spacex they've literally said one of the ways in which they intend to monetize is to go and mine asteroids for rare minerals.

40:10And you get one asteroid, has gold in it, boom. You could double the Earth's gold supply just by hitting one asteroid that has gold inside of it. Incredible inflationary event. All the world's gold fits in a cube less than the size of a football field. We don't have that much gold in the world. And so just having a significant event where we find gold somewhere else in an asteroid would totally change the world dynamics around gold. permanently, forever. Whereas Bitcoin, you're not going to find Bitcoin in an asteroid somewhere. You know, Bitcoin is software. And I think for a software civilization, it makes sense that our money should also be software-based.

40:53We have to believe in the exponentials. Do you ever sell some major tokens you believe in personally? I mean, I certainly have at different times, but most of my assets I hold. So there are times when, okay, I need to sell somebody for taxes or whatever. But for the most part, my personal finances are very simple. My venture stuff is very, like my work is very complex. But my personal finances are very simple. Tell me more about your personal finances. I mostly, well, one, I'm very invested in all of our funds. So as a GP, I have to commit my own money into all of our future funds. And then I own some crypto personally.

41:41And then I own some ETFs. That's pretty much it. And then I make angel investments outside of crypto as well. But these cryptos and these ETFs basically is a buy and hold. Yeah, buy and hold. Basically, the only thing I do is I, if it's taxes or donations are the only reasons why I generally will liquidate assets.

42:03I want to take this exponential thesis because I've done this exercise with Avishal from Electric Capital and with Matt from Bitwise and he actually also, he was saying, hey, we talk to these institutions every day. They have barely any money in there, maybe 1 % some of them. They're all going to come. They're going to go to 5%, 10%, etc. And therefore, I think the potential for Bitcoin is this. the potential for ETH, Solana, ETH, etc. I want to do the same exercise with you but in terms of context of exponential growth. I want to hear your Bitcoin thesis in the context of exponential growth. Well, I think I already unveiled a big part of that thesis.

42:52First, let me say, look, I'm a VC. I don't invest in Bitcoin outside of my own personal holdings in Bitcoin. because it's not a venture asset. I think Bitcoin is all about shelling points. It's all about consensus, and not consensus in the sense of proof-of-work consensus. I mean, consensus in the sense that society needs to build consensus that Bitcoin is going to be the way that we denominate non-sovereign wealth going forward. I think this is more or less inevitable. I think that, okay, Bitcoin went from this to this, if people say, oh, it's not acting like gold. It's not acting like a hedge.

43:31It's not acting like this or that. I think this is mostly stupid, people complaining about this. Like the reality is that Bitcoin and crypto generally is very protean. It changes its form. It changes what it's connected to at different times. There are times when it's been correlated with gold. There are times when it's correlated with the NASDAQ. There are times when it's correlated with nothing. It just does its own thing, has no correlation to anything. It moves through these different regimes. And we've known this. We've known this for many, many years. If you just go back and look at Bitcoin, it's very obvious that it doesn't always behave the same way.

44:05And so there's two competing theses at the same time. One is that it should behave like gold, which means that when gold does well, it should do well. Or two, it should be an uncorrelated asset, right? That's the other thing people say, it should be an uncorrelated asset. Well, if it's behaving like gold, then it's not an uncorrelated asset, then it's correlated to gold. In which case, why do you need Bitcoin? Just own gold, right? Two are correlated. So you can't have both. You can't have them both like gold and uncorrelated. I think what people really mean, what they really want from Bitcoin is not that it's like gold and they also don't want it to be uncorrelated.

44:36They want it to go up. If it goes up, all is forgiven. Nobody cares what you're correlated to if you go up. It's only when you go down that people are upset that, oh, it's not like gold, it's not doing this, blah, blah, blah, blah. The reality as well is that, look, Bitcoin was very correlated with the S &P up until 10.10. If you just chart Bitcoin versus the S &P or Bitcoin versus the NASDAQ, charts very closely, correlation very high up until 1010. And then after 1010, S &P does this, Bitcoin does this. Bitcoin starts going down relative to these things. It decorrelated. But this is not the kind of decorrelation we want.

45:15We don't want it to decorrelate down. We want it to decorrelate up. So I think at the end of the day, all is forgiven if Bitcoin goes up. if you go back through history, Bitcoin behaves in a different way than any other asset. It has regimes where it acts like other things, but for the most part, it's clearly its own thing. It's its own asset. It has its own characteristics and its own cycles. So in the long run, I think people are going to be chattering and complaining and saying, oh, Bitcoin, why is it not doing this? Why is it not doing that for the next 10 years? I don't think that's going to stop until Bitcoin gets to real saturation in terms of its adoption curve, and that's going to take a very long time.

45:53And they'll miss out because of that, right? Absolutely. Because it never feels good, basically. Yeah. It never feels good. But if you look back, you're like, holy shit. Yeah. I mean, the last five, six years is,

46:07I mean, yeah, 20, 30, even 40X just on Bitcoin, right? Yeah. But it never, I mean, maybe it feels good for one, two, three months because it goes up like crazy. But the rest of the time, it's so volatile that it never feels good. and you don't see, you don't feel, you feel more pain than good on average, right? That's right. And therefore you never feel really good and therefore you miss the whole freaking exponential. 100%, 100%. There's so many people I know who came into crypto at the same time that I did and who didn't make money, okay? Now, how is that possible? That you can enter the industry when Bitcoin and crypto and all this stuff is so low and still not make money?

46:48The answer is that, very simple, you just didn't do the obvious thing, which is stay in the market. Just stay in the market. As long as you stay in over a long enough time horizon, you will make money. It's basically guaranteed if you look through the history of crypto to where we are today. But people don't do that. It's very hard. It's so hard because it's so volatile, right? Yes. And that is one of the, in a way, that's one of the advantages of venture is that venture capital forces you to stay in. It forces you to hold. You can't sell venture. so you know for many of our lps they invest in us and as a result they were forced to hold even after they were like fuck this you know crypto sucks it's terrible what did i do i made a huge mistake and i i guarantee you i mean they don't always tell me that but i guarantee our lps have felt that many many times and the only thing that kept them from making a mistake that they might make if they were to go just get in the market themselves was the fact that they were locked up they had no choice yeah and that's part of the beauty of venture in many ways is that it it overcomes a lot of human beings worst instincts right vc is never a forced seller and so much of the advantage you can get in this market is that you're never forced to sell right the worst thing you can do is to be forced to sell something you don't want to sell and that that i think is why VC is such a such a straightforward way for an investor to play getting exposure to crypto relative to trying to do it directly the locked up strategy the comma strategy or the death strategy right yeah yeah well it's like you know lock yourself and throw away the key yeah what does Bitcoin look like when it's reached this saturation state or equilibrium price yeah that you mentioned before and that most will have missed.

48:40I don't work at Bitwise. I don't walk around giving people price targets or anything like this. So I don't know. Something well above 100K, probably south of a million. I don't know what that number is. Many other people have spent a lot more time thinking about that than I have. In terms of what saturation looks like, saturation looks like, basically, Bitcoin is very boring. That's what it looks like. it looks like young people don't talk about Bitcoin anymore. That's something their parents do. That's how you'll know it's saturated, right? Like when you are kind of cringe for telling your kids about Bitcoin and they don't even know about it because it's just like, you know, just like a thing that old institutional people do, that is when you're like, okay, wow.

49:23We've now crossed the chasm to the point where Bitcoin no longer feels countercultural. It no longer feels like taking a risky bet. It actually feels like the thing you're supposed to do. It's what Morgan Stanley is telling you to do. It's what Vanguard is telling you to do. It's what every responsible financial voice in society is telling you to do. That, I think, is also when you'll start to see Bitcoin behave like gold. Or maybe, I should say rather, how gold used to behave. If, in fact, Bitcoin is able to usurp a lot of the market share that gold once had. But before then, why would Bitcoin behave like gold?

50:00It doesn't make any sense. Bitcoin is obviously not like gold. Bitcoin is a bet on something that may in the future become like gold. But something that may in the future become like gold is still going to be very volatile on the basis of how long is it going to take for this thing to become gold. If it takes 10 years, then okay, you apply a discount rate based on the future value that it's going to be. And based on interest rates, interest rates right now are relatively high. That gives you a certain fair market value for what this thing is. if instead you realize oh no wait it's gonna take longer than i thought it's gonna take 15 years that is going to cause you to mark down very aggressively the same asset even if the terminal price is the same right that's just how discounting works that's just how net present value works so all that is to say you do not have to believe or i should say if even if you believe that this thing is going to be like gold someday that doesn't mean it's going to trade like gold in any way right now.

50:59Why would it? It shouldn't. It's, I think, a fallacy to look at Bitcoin and say, well, you say it's going to be digital gold. Why isn't it trading like gold? It's not supposed to. Quick shout out to the legendary team at Jupyter, the DeFi super app. Anything you want to do on chain, from trading to earning yield, you can just use Jupyter. Personally, I recommend getting the Jupyter wallet on either your phone or your laptop. 10 times faster and 10 times cheaper than the competition. You're going to love it. Thank you to the awesome team at Athena for backing today's conversation. Athena is one of the fastest growing projects in DeFi with over$7 billion in stable coin supply and an average 11 % APY on SUSDE.

51:43And importantly, zero DPEGs since launch, which is exactly what you want from a stable coin. Go check them out by following the link in the description down below. You said before I'm a VC guy so I just own BTC as part of my personal portfolio. If you're a VC guy there's some other big crypto assets that make more sense for the VC brain and you've been actively defending some of these assets ETH and SOL. Yeah. When lots of people kind of lost faith

52:25why are you actively defending an ETH or an SOL or Ethereum and Solana putting on your VC hat and giving hope to people who lost it yeah it's a good question why have I been doing that I think a few reasons so one I am generally called to defend the things that are indefensible.

52:59It's very easy to come out and say, rah, rah, Bitcoin's great, or whatever. Oh, Bitcoin's down, everything sucks, or yeah, AI is so amazing. What often energizes me is the ideological orphans. What are the ideas that no one's defending right now? And maybe they're kind of obvious. Oh, Ether is valuable, Salon is valuable. Well, obviously, it's got a market cap. It's worth tens of billions, hundreds of billions of dollars. Clearly, people think it's valuable. But nobody wants to say that. Everybody wants to say the opposite. Everybody wants to say, oh, this is just a meme. There's no cash flows.

53:30Why should we value this stuff? This is all bullshit. And that was the prevailing conversation among culturally influential people on Twitter. And that was the zeitgeist that I really wanted to argue against. And I think in many ways, people's perception at the time, and I think even still to some extent now, is that the reason why these assets are valuable is because suckers keep buying them. And it's okay, maybe the sucker is some retail investor, maybe it's some Korean guy, maybe it's Tom Lee, but there's somebody who isn't thinking very hard who's buying these tokens. And the people who are thinking hard are all the people on Twitter who are saying, oh, this is all worthless and you shouldn't buy any of it.

54:12and I think this is a mistake and there's a deeper wisdom that the market is reflecting to you that the market does believe these things are valuable and they also believe that they're going to get a lot bigger than they are today. What tells you that? What tells me that? The market believes that they're going to get much bigger one day. Well, for the obvious reason that if you look at these assets today, they don't generate much cash flow. There's not a lot of revenue in these protocols today. Now, why would a market value an asset that's not generating cash flow? Well, take another example. Look at OpenAI.

54:50OpenAI is burning cash. Revenues are tiny compared to all the costs they're paying, and yet they're valued in hundreds of billions of dollars. So your logic is, while these naysayers focus on cash flow and all that stuff, you're saying, look, maybe there's not that much cash flow or revenue, but the valuation is huge. therefore market is telling you that in the future it's going to be better. Well, kind of like a Tesla, the Tesla stock was like the opposite. Yeah, yeah, yeah. Look, that's obviously not sufficient. That's obviously not sufficient to make that case, right? It's more to understand, like, you know, markets have two regimes, right?

55:24First regime is cash flow. Is that simply, I don't care what your story is. I don't care who you are, what you do. Show me the money, right? And all I am valuing is how long is this money going to continue to exist? If I believe that, okay, you're cash flowing this much today, but it's going to go down, I give you a low multiple. If I believe it's going to be there forever, I give you a higher multiple, the end. Okay? Then there's a second regime. And the second regime is the growth regime. And the growth regime, I don't care so much about cash flows. I care about growth. Right? Now, why would you be in a growth regime versus a cash flow regime?

55:59This is a Silicon Valley mindset versus a Wall Street mindset. Oh, it's both. both Wall Street and Silicon Valley, go between these two modes, right? So you go look at something like Tesla. Tesla is, you know, what's the P ratio on Tesla? It's horrendous. It's absolutely insane. Why is the P ratio so high on Tesla compared to, you know, Google or Meta or whatever? Because it's in a growth regime. Because people believe that Tesla, it's not even about cars at this point, right? What is the growth story for Tesla? The growth story for Tesla is basically they can replace Uber by using these fleets of self-driving cars.

56:35and that they're going to go into robotics with Optimus and all this other stuff. It's a growth story. That is a growth story. It's not a cash flow story. So Wall Street and Silicon Valley both understand the distinction between these two regimes. Now, there's no utility company that's in a growth regime. There's nobody who's just selling phone lines who is telling a big story to Wall Street. Oh, someday we're going to have to do that. It's like, no, I don't believe you. Shut up. Show me the cash flow. and go away. Like, I don't need to hear you. I need to read your P &L statement. So the question is, where is Ethereum?

57:13Is Ethereum in the cash flow regime, or is it in the growth regime? And I'm telling you demonstrably, the market is treating it as though it's in the growth regime. Is that when does Ethereum move? When does Ethereum, when does the price, what does it react to? Does it react to fees increasing on Ethereum? Does it react to, oh, the burn is increased? Oh, therefore, wow, Ethereum should be a lot more valuable? No, it barely reacts to it. What it reacts to is the expectations of growth. It reacts to the story. And that's telling you that the market sees, now rightly or wrongly, the market sees that Ethereum is a story about the future.

57:51It's a story about Ethereum and the things that it encompasses getting much bigger than they are today. And if they don't, Ethereum will go down. Ethereum will get punished horrendously if the market doesn't believe that. that is very different from a revenue regime. How often has the market been wrong on this growth story for an extended period of time? What's the likelihood that the growth story for ETH or SOL is wrong? Hard for me to answer what's the likelihood. What's the likelihood? I don't know. I mean, markets get this stuff wrong all the time, right? So obviously individual stocks can be overvalued and go down and fail horrendously.

58:33So I mean, take WeWork as an example. Take Peloton. Peloton is a perfect example. People thought, oh my God, COVID changed everything. And people are just going to live at home. They're going to work from home. Their gym is going to be at home. Everything's going to be at home now. We're going to become these isolated nuclear units that just are self-sufficient because people don't want to leave their houses anymore. And this is the new normal. and turns out nope, wrong. That was just the two years. As soon as people could go outside, they went back to normal. Now people go to gyms and all this stuff and it's all great.

59:05Same thing is true with Roblox. Roblox was another crazy high-flying company during COVID because people thought metaverse, this is it. So it's clearly not uncommon for the stock market to get these things wrong. How often does the stock market get an entire trend wrong? Getting an individual company wrong, okay that happens all the time getting the entire trend wrong well okay covid is one example right market got the whole trend wrong we thought permanent work from home permanent social shift nope went back to normal right okay another trend that i think that uh society got wrong was the metaverse right this was you know zuckerberg was very very adamant that everything was going to change we're going to live our lives online also you know part tied to the whole general covid shift metaverse nope doesn't seem to be happening not for a long time um we've seen something similar with green energy, there was a big green energy boom bust in the early 2000s.

1:00:00That obviously did not end well for the investors who participated in that. And I think crypto, it's interesting because crypto has had so many boom busts over time, but it always comes back to boom again. That is, it's important to realize that. That is extremely rare. That is extremely rare. Usually what happens is you boom, you bust, and the market realizes like, oh, we were collectively deluded. We're done. Great, done, never again. What a mistake, right? Instead, crypto booms and then busts, and then booms and then busts, and then booms again. That doesn't happen. That does not happen. And what that tells you, there's something much deeper and more resilient that is happening in the crypto market, right?

1:00:49Now, the speculation around it is endemic to the product itself. There's something about crypto that encourages and facilitates that speculation. That's really unique relative to a lot of other stuff. Because it's money. Because it's money, exactly. The only other example I can think of that's like this was actually the dot-com boom. So the dot-com boom, one of the companies that blew up in the dot-com bubble was eShares. And eShares, or sorry, was it E-Trade? E-Trade. So E-Trade was literally a stock trading on the internet. It's an internet stockbroker. Back in the day, they were called stockbrokers.

1:01:22And so, okay, it's an internet stockbroker. You can go on there and what can you buy? Guess what? You can buy the dot-com companies. And so people were onboarding onto E-Trade and they were buying dot-com shares. And that was in a limited way, but in a significant way, it helped facilitate the craziness of the dot-com bubble. That's the only other example I can ever think of. I would say a smaller scale, OpenSea doing NFT craze. Oh, yeah, yeah. But it's a niche within crypto, which is a niche within assets, right? Right, right. So what we're saying is basically crypto is in this massive trend and the likelihood that some of these top assets or ecosystem within this massively growing trend, the likelihood that, because you said stock picking is a hard thing, right?

1:02:10Yeah. But hey, the logical thing is, what are the big ones that have most of the activity and already a certain market cap? and are within this trend of boom and bust and haven't died despite a bunch of boom and bust, the likelihood they don't continue this trend is low or is lower. You mentioned these two categories, revenue and growth. Yeah. Where do you put an ecosystem and an asset like Hyperliquid or Hype in this bucket. Yeah. I mean, the reason why Hyperliquid has been so successful is that it's both. It's the rare asset that it's both. That both there is a very credible and demonstrable growth story, right?

1:03:04Not just that it's grown so much in market share, it's also expanded the market itself for on-chain perps. And, you know, with things like HIP3, it has expanded into other verticals outside of descriptive trading. So now you're seeing with the advent of trade XYZ on hyperliquid, huge amounts of commodities trading. And, you know, stock derivatives that are starting to get traded, index derivatives that are starting to get traded. This is now, trade XYZ alone, which is their HIP3 markets, are bigger than like the sixth and seventh biggest perp decks just by themselves. Just that one product is bigger than all these other perp decks.

1:03:44So having both, and of course the fact that they buy and burn their token, they have enormous amounts of cash flow, you know, hundreds of millions of dollars every year. That, the revenue plus the growth story is what makes it such an explosive asset. But having those two together is very rare, which is why, you know, I don't think that's the, certainly not the norm. Last one for today. why should crypto stay why should people stay in crypto when there is an AI brain and capital drain this might not be the answer that you are expecting but I don't know that they should I think that it is correct first and foremost for AI to be gobbling up a lot of talent AI is unequivocally the most important technology of the 21st century Zero doubt in my mind about that.

1:04:40And if you cannot really identify the value you're bringing to crypto, then maybe it's time for you to go. I think that's healthy and normal is the reallocation of capital and the reallocation of talent. That's part of what capitalism is for, is for allowing the market to tell you, hey, your services are no longer needed here, but over here, they might be really valuable. The pioneers in the crypto industry, I mean, that's when we talk about OGs leaving. That's what we mean. We mean the pioneers. The pioneers are the crazy people. They're the people who are attracted to the Wild West. Most people are not pioneers.

1:05:15Most people are not attracted to the Wild West. Most people are terrified of the Wild West. Most people are scared of getting bit by a rattlesnake and getting marauded by Native Americans and dying somewhere in a forest. And that does happen to people. There's a lot of pioneers that got really messed up from their careers getting into crypto early, and you know many of them. And so those people saying, hey, I don't know that crypto is for me anymore. I'm like, great. There's a lot of Wild West in AI. And maybe that's the right place for you. Because this is not the Wild West anymore. There's a lot of building to do.

1:05:51There's a lot of civilization to build on top of this technology now that we have it. And we know the form factors that it's likely to take. But, you know, let me give you another example that I think is kind of similar. there was a period of time when social media was really just exploding like so many different ideas so many different things that were being tried and basically by 2010 it was pretty much all done almost every single social media app that mattered was built by 2010 right LinkedIn existed Facebook existed you know Yelp existed all these things were already created by 2010 The only one that wasn't was TikTok.

1:06:35And what that tells you is that, well, maybe if you're an innovator, if you're a creative person, maybe social media is not the place to go. But that's not quite right because social media after 2010 became such an explosive trend, right? Grew absolutely enormously through the roof and created the biggest and most powerful companies in the world, right? Social media was the story. But the rate of new company creation, the ideas were already all there by 2010. The rest of that was execution. The rest of that was the build-up. We are now in the build-up phase of crypto. We're in the execution phase.

1:07:18And if you are an ideas person and you're like, hey, I need the Wild West, I need the craziness, I think that's very much Kyle Samani. He is absolutely to his T. He's a wild man. He needs the Wild West. and it's not here anymore. It's not in crypto. Now, you can lament that and I think it's, you know, there's a part of me that does but there's also a part of me that sees the vindication of being able to captain the build-out of an industry like this. That is its own kind of excitement and it's its own kind of reward for being right, for being early and for having stewarded through. So that's where we are now as an industry.

1:07:56If you don't want that, I think you should leave. It doesn't mean that it's over. No. Or that there's not still crazy potential gains. Correct. Same as social media. That's what people are confusing. That's right. Social media, 10, 20, 30x between 2010 and today. But it wasn't, you know, if you were to rewind the clock to 2010, everything would be pretty recognizable in social media land, right? It was just bigger. There were just more zeros on the end. Thank you so much, Hasib, for doing this. About a year and a half after the last one. I know. That's right. That's great. That's great. Loved it.

1:08:41Thank you. As you probably know by now, I host some of the biggest names 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 hear anywhere else. If you want the real inside take on Bitcoin and crypto, join my newsletter, The Shift, in the description down below.