Bankless 🤝 Daily Gwei Friday Livestream (BEAR MARKET SUMMER)

Transcript

so is it the opposite is this like i've shaved it to to save eight let's go come on yeah now now it's down now it's just like desperation mode is like please please go up eth i'll shave my beard if you go up now exactly and sure enough it didn't go up and it came back down and and we went to i don't know what we went to overnight i haven't even checked the prices like 22.50 now so yeah um hopefully it works over the over the the next couple of months uh you know i don't know let's let's talk about the markets actually like we haven't done this in like three weeks this live stream and the markets have melted down since then yeah have you are you calling is that a calling in a meltdown are you calling marcus at meltdown right now

i mean eighth going from 4.4k to 1700 in like a week is is pretty much a meltdown dude like that's that's brutal that's like a raising 50 or more of people's wealth in like a week yes yes and also it everyone got that wealth really like to some degree the tops of markets are also flukes i mean yeah it's it's like yeah i get what you're saying it's like people made that money in like a couple of weeks i think eight backwards like roughly two months yeah yeah exactly yeah exactly but i think this is the funny thing about crypto is that when you look at your portfolio you're seeing a number that has no

bearing into reality because that number that you're seeing is just a place in time and also depending on what you're holding you may not even be able to cash out that what you've got in paper holdings because of lack of liquidity or because you know everyone's running to the gates and and the lack of liquidity really becomes apparent then and that's why i guess where we see those those big crashes is there's never enough liquidity to match the paper gains that everyone has and that's why i actually think that market cap is such a uh a bad metric generally for measuring this stuff is because you look at market cap and people like oh look at the market cap it's so high because there's so many you know there's so much uh the price is so high and it's like well what about the liquidity and then you

look at the liquidity and you're like okay there's nowhere near enough liquidity to handle this okay so if if we want to the first time that ether hit the current price of 2000 let's let's actually be even more bearish the bottom of the price in the last 24 hours was 1 000 or two twenty two thousand one hundred and thirty dollars that was that's the lowest it's gotten in the last 24 hours the first time we hit that was uh sorry one second was it would have been april oh my gosh i you would think i'm finally good at trading view charting but i'm not um yeah it was it was i got it here it was april like april 13th

the first time it hit the price that we are currently at is april 13th the next most recent time before we hit all-time highs going into above 4 000 was april 25th and so it was either 66 days ago or 53 days ago take your pick so we are backwards two whole months which actually when we we consider when we make these analysis of bull markets like going back two months is actually a big deal like a lot gains in crypto happen in a very concentrated amount of time and so when we say we're backwards two months well those are the two months that a lot of the concentrated gains actually happened right um and to some degree that's also

saying at the same time like well that's the fluke right that's like the two month overreach those 64 days like that's not the real we never i never really considered the 1400 mark in 2017 as like the actual top we were there for such a short amount of time same thing for above definitely about 4 000 and like kind of also true above 3 000. we were only there we were above 3 000 for only roughly 15 or 15 or 16 days right in a very short amount of time yeah yeah that's very true that a lot of these kind of things happen in a short amount of time and then you'll have what people call like a blow off top or whatever um and i i think so so i think what what people are gonna i guess can

maybe i don't know if concerns the right word but like a really kind of concerned about uh is the fact that like it's a sideways market which is like super annoying because you don't know what the trend is because you know especially like traders are really annoyed by it because they're like you know there's no trend here it's just range bounds in between these you know these numbers uh on on a screen and there's no way to trade it because there's no trend i mean some some traders will trade it and they'll try and scalp or whatever um and then they'll be more sophisticated traders who try to capture the funding rate spreads but essentially you know the retail is not interested in a sideways market so like retail's gone at this point like they're not gonna be buying into things that aren't doing anything like retail has

such a short attention span that unless something pumps within a day they're over it already and they'll probably sell it and try and you know play somewhere else so i think you know that i actually it maybe i'm i'm this is an unpopular opinion but i think sideways markets are just worse than than down markets in general because at least in a down market you can tell you know where in an actual bear market it's going to go down i don't know where it's going to go to but i know it's going down but in a sideways market it's like where the hell are you going like do i sell now in anticipation of a bear market do i put do i buy back in you know it's so annoying sideways markets you just get frustrated about the confusion right and that's the that's generally the gist

i've gotten from all the traders and market commentators that i followed everyone's just [ __ ] confused like no one knows what happens next and the kind of the shelling point that i've gotten to lately is we had ledger who i really respect as like a trader and charter had him on the state of the nation that was a really good episode uh and he said that you know maybe the max payne is sideways max payne is sideways and i've and the thing is i've heard that articulated a number of times and just right before we were starting this live stream i had this idea in my head like there's enough people articulating that like sideways is the way to go that you know i'm starting to think that uh quick side quest markets react to what people

believe about them right uh and and we should get back into that train of thought later but if enough people believe the same thing about markets it's going to do it and then it's going to fake every one of those people out right so here's what i think is actually the new a an updated version of the fact that everyone now thinks it's sideways what's actually going to happen is it's sideways tilted down and it's going to be just bearish enough to really make the sideways people really question like [ __ ] is this sideways or is this down i can't tell and it's also going to be just sideways enough where the bulls are going to be like it's going to be sideways and then it's going to [ __ ] pop right and but it's also going to be not down enough

where it's going to be sideways and the bears are like please [ __ ] capitulate so i can buy my so i can buy the dip it's just going to be the most confusing amount of sideways to sideways down for a decent amount of time like that that's kind of my hot take here how do you feel about that yeah i mean it fits into what i've been saying lately where i believe that bears are just balls sitting on cash wanting a better entry like i don't actually believe there's many actual bears like crypto bears that think that this thing is just like going to zero or like going down a lot like from here i you know they're rare in in crypto um but yeah i totally agree with you and and i think that uh this is why you know people might wonder why people

kind of like use technical analysis or look at charts all the time they're looking for signal that's all they're doing at the end of the day they're looking for some kind of signal to tell them what to do now right now there's no signal and now people i see people going back and looking at you know prior cycles and being like oh you know we did this in the price cycle what if this is like the double top cycle of 2013 and we've had the one top and the next top is going to be we just get two we get to have two cakes so so you know people always go and look back at history for signal and i don't i don't know if that's the right approach i do think that sometimes things can play out similarly and there's like fractals and things like that but

generally i think every cycle has been different i mean if you really just look at the the bitcoin and eighth charts like bitcoin more so because it's got a longer trading history it's just been different pretty much every time i mean you know just going back to 2013 you had the double top there um and and then you know that and then the cr the um the blow off top was actually fueled by mount cox going down or mt box whatever you want to call it going down then in 2017 you had just one top and the blow off top there wasn't fueled by any sort of news it was just it just happened i think i believe i don't remember any particular news coming out it was just like another rotation because we had enough momentum to make that rotation happen yeah exactly so um and i actually have a

theory that i never really validated that during 2016 um ransomware started getting really big uh and btc was obviously the the thing that people demanded ransom in and i think that actually put bitcoin back on people's radars and that might have been what kick-started the the thing that but you can never kind of paint these things and people say like bitcoin follows the harvening and all this sort of stuff that's another kind of signal and there's stock to flow which in my mind has just been invalidated at this point but uh and then you know this current cycle we had news again where it was just like okay well we kind of came off the news of uh the uh elon musk with the esg concerns uh china banning mining or whatever they did with mining clamping down on it a lot of uh regulators going

off going after centralized exchanges for leverage uh stuff and things like that um so you know actually back in 2013 we had we had silk road as well so i think the first dump came because silk road got shut down so so and i think what happened then was like silk road got shut down people panicked sold but then it the silk road getting shut down brought so much attention to crypto that we just started another kind of a leg up so but again the industry is so different 2013 ethereum didn't exist right at all it was it wasn't uh it wasn't even an idea in vitalik's mind till probably like i think maybe mid to late he's probably still working for bitcoin magazine not working for like leading bitcoin magazine yeah exactly so um you know looking at

i i i i totally agree with what you're saying and i think that you know we are in that kind of sideways slanted down and and yeah that is definitely screwing with more people than than anything because usually like based on technical patterns if you see something like just slanting down um especially if the volume's lower it's called a falling wedge and it means it's actually going to be bullish where it's actually going to be a breakout because everyone's just going to pile in eventually um with with their cash and we're going to go back up again but it's just i mean these short-term moves man like we're both long-term people these short-term moves are just like noise in my mind because maybe in a month we're back at 4k and we would just laugh back at this kind of live stream be like hey remember when we said that

sideways slanted down like it's going to be like annoying and now we're back at 4k right there the most recent uncommon core podcast they were talking about how um they were they were talking about how they were taught right after defy summer where defy tokens mooned and then and then dipped and ether kind of really didn't do anything and and they were talking about in in the particular uncommon core episode that they were talking about so we're talking about two on common core episodes right now first on common core talking about a previous on common core episode um they were talking about how uh like overall there's just bearishness about ethereum as a protocol and the eth killers are going to capture attention and and really it's just going to eat

into ethereum's use case and then it means and hazu talked about how amin solimani tweeted out if if ether was literally just double the price of whatever it is right now if it was like at 280 or something and it means that if if ether was at like 400 or even or 500 or whatever you guys would just be all saying all the same things except bullish about ethereum and so what the the what the lesson here is that the narrative is determined by the price right like if everyone is bullet or bearish on ether then like oh yeah the the ethereum killers are going to come if the ethereum's lunch like you know layer layer 2 is going to kill eip1559 like blah blah blah but as soon as like ether starts to just even just marginally touch the bullish territory

like the narratives are back on like oh now we're bullish again like yeah so like to some degree you kind of have to like realize that like people's personal psychologies and straight up your gut feeling here's a side quest i was a psych major you have a lot of neurons in your gut and like the reason why people like play off of their gut or go by their gut is because like it's literally your second brain like your your gut take does like a lot of internal calculations and your gut is like your emotional side like that's your emotions feeling your gut it's not it's not your prefrontal cortex it's like your hormones and just like how you feel and people's like gut takes is largely determined by what the price is right and so if they have opinions about the way that the the direction of

the market it's largely influenced by the actual emotions that they feel so that you can see the same fundamentals the same metrics the same drivers and if ether price is lower or if ether price is higher it will determine how you interpret those things which is crazy yeah i listen to that podcast as well and i mean yeah it's it's pretty funny because uh and it actually inspired uh the newsletter i did yesterday for the daily gray uh call and um was talking about something called recency bias and this plays into that where just because something has done something in like the last month or so it's it's basically clouding your judgment and and you're you're suffering from recency bias and then you're extrapolating one month's worth of price data

or like market action and kind of like putting that on the long term when you shouldn't do that because uh you know if you kind of look at what i guess like the history of what what has happened in ethereum like over the past year and what's what's coming over the next year it's so bullish right it's been so bullish it is going to be continue to be bullish but because you're looking at the last kind of month or so where the price is down 50 from the highs your your monkey brain has this recency bias where it's putting more weight on recent event events than historical events when in reality the historical event should have much more weight because think about how much we've achieved in the last year especially looking at just like launching the beacon chain that was huge absolutely massive in december i remember

celebrating that like live on stream uh maybe not on stream but like in in some zoom or something like that live with a bunch of friends we were maybe no i think there was a stream for yeah we were just all celebrating uh and it was just like a bank of the stream yeah i believe so i think so yeah yeah yeah um it was just like it was great like it was just so much fun and like that is is only like what five or six months ago now six months or probably something like that and you know and and then because like the last month has been like negative price action everyone's just like uh having recently biased over that and it's funny because we were just discussing how just two months ago in april we were at this price so it's like well we're at this

price for for this year like we've been more bullish this year than bearish and now everyone's just suddenly like super bearish right i'm like oh my god it's a bear market we're going back down so uh yeah i totally think that if the price doubles from here those those narratives or not even doubles if it goes back above 3k the sentiment is just going to shift like completely yeah it's literally going to be bull markets back on going to 10k tomorrow maximum leverage let's [ __ ] do this exactly and that's why leverage is such a killer for a lot of people is that they they play on leverage based on just just current like market movements and they'll just lever up when it's already pumped a lot and yeah it's it's it's funny how much human bias human emotion like pretty much

rules the entire market in every market not even just crypto to some degree i think leverage is kind of why it's so easy to flip sentiment right because the leverage players are likely perhaps also the loudest players and so like when the leverage boys get like wiped out they kind of really make the the market subdued because they already have outs like outsized exposure to the market and so they're like and like any meaningful drop counts like two to three x for them right like the the emotions will hit two to three x harder and so like they'll they'll be the people who feel scarred and like won't contribute to like there's a reason why like people pay attention to weekly followers of

crypto exchanges or they're straight up a a block metric for weekly like subscribers to like classic um bank uh youtube like trader accounts or like new youtube accounts crypto trader like trader accounts usually your trader accounts and so like when those numbers really dip it's because like the people that got burned are like you know [ __ ] this industry like i'm out like i i hurt like this hurts and i'm gonna go pay attention to the rest of my life because they they just got hit too hard meanwhile the fundamentalists are like paying attention like oh yeah ether is still ultrasound money to some degree i think that this could be there's a lot of people that came into the world of ethereum specifically in the last like six to nine months and are really bullish on ethereum because they've gone

down the rat behold they found the right rabbit hole to get into and like i my heart goes out to those guys because like guys like this is this is straight up an accumulation time like this is this is the time to accumulate even if it is a bear market it cannot be as bad as like a traditional crypto bear market and so if you are new to ethereum and you feel like you can when you came in and you feel like you came in late because literally everyone feels like they come in late when they come into crypto like this is your time if you are if you have already mentally checked into this uh ecosystem and specifically to ethereum and you are ready to make ethereum like part of your long-term life as anthony did in 2017 and and as i did in 2017 and you're ready to be a

part of this world like this is the time where you put eth on the balance sheet boys and girls this is the time where this is the time where you like plant you plant your flag and be like i i it's not a bear market but wealth is made in bear markets and also kevin milwaukee i i made this tweet where we where i said um this is this is an accumulation zone like don't miss it as a signal to all these people if you came in now like now's the time to buy and then milwaukee followed up and said well i've been accumulating friends the whole time uh friends and and so not only is this the time to accumulate ether but this is also the time to make connections because not again not a bear market but in bear markets friends are made wealth is made

culture is made and then in the bull markets we all get to celebrate together but like begin now like this is it yeah yeah i mean accumulating social capital during these times is is much easier because there's much less noise um and you you know you can kind of get out there and see who stuck around uh and who is like an actual builder who actually cares about this stuff beyond price so and and you know as you mentioned like you and i are like bear market babies like we were born out of 2018 2019 i mean it's funny because ether didn't actually launch officially till jan 3rd 2019 but like late 2018 is when eric and i started doing the podcast and everything and i started doing my newsletter in early 2018 so i you know i i basically like personally

i i don't know your journey specifically um but personally i was like literally no one in 2018 still within the ethereum community no no one knew me like i had no name for myself but i i kind of like had the plan where i'm like you know what i know this shit's going to change the world i know that what what a crypto bear market's like because i actually was involved in 2013 slash 2014 for a little bit with bitcoin um i know how these things go i'm like it's just going to be bearish for a while then eventually it's going to come back and that conviction during that time allowed me to accumulate eth for sure uh during that period of time and also accumulate the social capital and that all paid off in the bull market like really i looked at my twitter follow like follower history

you know i think i'm almost at 100k now just like six months ago just six months ago that was like much much less and like even just a year ago that was i think i think a year ago i can't remember exactly i think i was only at like 10 20k or something like that maybe even less than that so putting in those foundations during these times if you want to do that if you want to become like a community leader or you want to work in this industry accumulating social capital now pays massive massive dividends and of course accumulating financial capital pays huge dividends as well uh but in saying that like it's funny because in in 2018 you know we we we did actually go into like a proper bear market where we went from 14 20 to 80 in the course of a year

uh and you know i know we're not calling this a bear market right now but you know we and i think that's because it's just been too short a period of time i think if we do this for three months or we keep going down or something and like we we don't like uh continue this crab season we actually go down then it's probably safe yeah it's probably safe to call it a bear market and if it is confirmed to be a bear market then you know i not financial advice but usually in those times you wait a while before getting in you wait until it starts to go crab season again i waited until i remember like uh i made a bit of a mistake which isn't a mistake now but it was back then where in october of 2018 i had put like all of the money i had

saved up during the year to buy eighth into eight eighth price was 220 dollars i said to myself you know what i'm okay if it goes 50 down from here because i believe long term it's going to be fine well eth went more than 50 down from there it went down to 80 in two months and i was sitting there and i'm like i just made this huge huge bet and i know it's going to pay off and i had to wait until maybe two seconds like yeah exactly and i had to wait until almost mid 2020 to be in profit on a clear profit in on that on that buy and now obviously it's like 10x from where it was but right as soon as soon as you're in profit the profit amount is high velocity right you go into even more profit very quickly but for that

time you were like well like it's if it's a multiple factor of like you could have been every ounce of profit you had you could have had like 2x of profit right uh-huh exactly exactly so but the thing is i didn't beat myself up about that like i didn't even really get get you get sad about it i just figured to myself like i'm in this industry for the long term so why do i care about this short term stuff uh and and and you know i've recently i've been saying a lot that i i don't plan to ever sell my eif so really the the price movements of eight in the short to medium term like literally have zero bearing on me and that's just me personally there's a lot of other people that they don't and they want it to go up so they can cash out

some and you know do something that's fine uh but the thing is is that you know i think this industry sometimes get gets painted as like a get rich quick scheme and like you'll be rich overnight when in reality it's a get rich slowly scheme where you actually have to go through a lot of these down markets and survive you know survive and not sell too early to to really get to where you want to be i think yeah no that's totally right and to some degree like uh building building in bear markets and building means a lot a lot many different things for many different people and to some degree like building is just straight up you and the way you and i built in a bear market is that we we like were persistent on twitter we engaged

with other twitter people we made content we stacked eth and when you do that in a high conviction environment which is a bear market in my opinion so like in a bear market if you are buying ether in a bear market it's equivalent to leverage without the liability right you get the you get the 2x 4x 10x like increases of ether when it's finally come turned without the debt of a of a of leverage with the benefit of like all the other like kind of clout that you got for doing it in the first place and the only uh they're only outsized risk is that you did it during a bear market when things were a lot more unsure and confused versus you know oh yeah ether just went from from 200 to 600 to like 1700 i guess

i'll buy in now and i'll write it up to you know 3 000 right like well congrats you made a two two x-ish but no like the convicted people when they they bought when there was uncertainty they made like outsized returns without any of the well with risk because there's always risk but you know if you're convicted you don't actually think there's risk but that exactly like the conviction that a lot of the long-term kind of eighth people and the ogs have has just come from experiencing these kind of like down markets lots of times in the past and and surviving them like that's that's all it really is it's just experience it's it's wisdom so people often kind of like uh like to to ask the question like what's the difference

between knowledge and wisdom and really it's that key thing where knowledge you like anyone can acquire a novel you can read a book you can learn something you can read something online whereas wisdom is acquired through actually experiencing it and actually going through it and going through the motions and going through time because you can read about a bear market you can read and hear about us talk about 2018 and 2019 as much as you want but unless you actually experienced it you're going to have a very different uh context on it than than we have a personal thing like it's in your own head yeah exactly it's very personal definitely and and it's actually funny because i was looking at some old photos from late 2019 on in osaka uh defcon there and i was looking at that and i went and checked the eighth price when

those photos were taken it's like 180 or something the absolute depths of of the bear market still right we weren't there was no there was no inclination that 2020 was going to be a huge year no one knew that covert was coming there was none of this it was just me and some buddies you know at some kind of bar in in having a great [ __ ] time having an amazing time and i actually consider the second half of 2019 after i joined set because i actually got to travel to a bunch of conferences um to be the best time of my life and i i you know i haven't had such a good time in my life ever uh and and and that was when you know it was like 180 or something like really just brutal and i think going through that kind of

stuff and like just getting over the price and actually you know if you're in this industry for the long term as we said acquiring friends you know doing cool stuff like going to conferences i know it's harder these days because of covert like it's killing me i can't go to any conferences but just those kind of things uh is what strengthens your resolve like i remember going to conferences and being like there is no [ __ ] way the world doesn't wake up to this like i went to east denver the the one of the most build focused conferences and i looked around and i'm like holy [ __ ] like the world is either sleeping on this but we're all [ __ ] insane it's magical yeah eat then very straight up surreal uh i mean i i hold it in very high regard because

eat denver was the moment in 2018 in february of 2018 where i realized that i was there's no [ __ ] chance in hell that i was missing whatever was going on here i couldn't articulate what was going on i didn't really know i couldn't even code i felt a lot of just like fomo about not being able to code and not being a developer because at that moment in time like if you weren't a developer you weren't anybody but like still like the conversations i had and ether had just like ran from 1400 at the all-time highs in 2017 down to 600 where people still had some money but like it kind of kind of felt like kind of right now it's like either ran up really high and then it crashed really really low and like there was some sort of

semblance of like we all just had a lot of money recently we still have a decent amount of money right now we don't really know what happens next but no one gave a flying [ __ ] everyone was just everyone was just talking about the potential of ethereum and like literally it it didn't even matter what the price was the price wasn't even relevant like maybe it set the mood but to some degree it was just a bunch of builders who had a really cool visions about the future of ethereum and like i i hold the youth denver in such high regard because of how magical it feels when all these optimists come together and be like here's the reason why we're optimistic it's about ethereum and if there's one thing that the outside world needs it's some goddamn optimism in his life

yeah exactly and the fact that they were optimistic and they were still there um you know uh through the through the bear market or through like a down market i mean for me i went early 2020 like feb 2020 was my first 8th den bar and that was the first time we met brother yeah it was it definitely was we i remember us having lunch in some restaurant i don't know why portuguese tacos how could you forget yeah the tacos yeah yeah yeah yeah yeah i had those like three times and i was there that was dude they're so good yeah yeah you pay for it later um but i i remember like the we were still so so feb 2020 was a very funny and weird month because covert you were hearing rumblings about in february like

you didn't know it was going to become a thing but you were hearing about you're like okay is this thing in china and because whenever something happens in china us westerners like i i don't know if australia is considered a western i don't think it is but like i'll put myself in the bucket but we think to ourselves like oh it's just happening in china just trying to do in china no way exactly so so so when that happened like it was just rumblings of that but then there was also like more builders than i had ever seen before at a conference and this was after the brutal bear market that means that those builders came in during the bear market the majority of them so when i saw that and when i you know the eighth price was like whatever it was still in like the hundreds or

something like that i i was at that point in time i was like you know this is this is insane if eighth price doesn't do anything this year then i'm crazy uh because there was just so much energy just pent up energy waiting like the spring was coiled like we just think about like a spring that was coiling for two years it was it was coiling something amazing and then we obviously had the explosion and you know some people say oh it's because it because covert happened and stuff like that and i'm like i don't think so i think crypto was just ready to go back up in 2020. i think it was time i think it was for the value it was on its way up all throughout 2020 and then we had a massive hiccup in covid but like it was up and to the right regardless

throughout 2020. like covet threw everyone a curveball but like the chart the chart had a mind it had its mind set and it was going up and to the right and as somebody who is at youth denver in 2018 and then also in early 2020 just like you said the amount of energy and excitement and straight-up magnitude and size of of the event was straight up like 10x like not not in population like population but maybe there was 50 more people but that was because it's already sold out and so they had to figure out how to fit more people there but like the energy and just bullishness and optimism in east denver in 2020 which when eath price was uh 60 lower than the last time i went there was absolutely

insane and now that was one of those things where it's like dude like i i i hope just doesn't like go too crazy because i want some more of this like this is great this is this is cool i can ride with this yeah it's funny i we all i think most of us rode through the bull market without going to one crypto conference uh until bitcoin miami which was the biggest one i think that happened during the i mean miami happened after the crash to be fair but still it had been like the first time there was a big kind of conference that happened in person conference where we were experiencing kind of like these these massive price rises and and that that's just like an even bigger context for me it's like all the conferences i experienced were through a

bear market those eight months from july 2019 to about february 2020 all during the depths of the bear market uh whereas you know i've never experienced one in a bull market and to be honest i i i don't know if it would be very different for ethereum i think with ethereum the the price is the price and what people really focus on is just always the building the products the services the the the technology because that that is what ethereum is kind of like geared towards because and i think that that's what separates it mostly from big points whereas bitcoin caters towards a very specific set of people and a very specific kind of use case which is number go up whereas ethereum will cater to everyone and that's why you know the amount of bitcoin maximus i've seen at ethereum conferences or like bitcoin maximalists who like a

maximalist in the streets and like you know not maximalists in the sheets they're just like you know catering to a crowd but the amount of people that i see like the different kinds of people that i see at ethereum conferences it's just hilarious like it was funny like in uh in august or something of 28 or 2019 at dapcon or like 8th berlin whatever you want to call it udi was there right like udi was there and he was just like chatting to everyone and like he's like a huge bitcoin maximus i would say but the funny thing is is that ethereum conferences regardless of like your views because you if you're if you're just interested in the technology at all and if you're you're a builder all the cool stuff is happening in ethereum so you kind of set aside those kind of like

monetary maximal speech because i think at the end of the day the maximalism comes down to the asset so bitcoin maximus are really btc maximalists they just some of them actually see a lot of them actually see the value in ethereum but maybe they weren't convinced on eight maybe lately that's that's changed but that's what it comes down to the asset stuff so if you're a builder you can't just be an asset maximalist because you want to build things you can't build things on bitcoin so interestingly btc maxwellis and i agree with that distinction btc maximalist will call bitcoin this the technology as a liability and as like literally the metaphysical reality of the 21 million units of btc is what they are maximalist about and everything else including the bitcoin

blockchain including the proof of work including everything is a liability and all the bitcoin system is is trying to minimize the size of that liability to uphold the holy 21 million units just one i wanted to add that color there yeah that's a that's that's perfect and i think that describes it describes it very well but it's funny because then people say well ethereum must be the opposite where eth is considered the liability and it gets considered this thing that just needs to exist so the ethereum network can function it's like maybe in the very very early days this is what people thought these days no not at all eth is considered a financial asset in of itself and people who are into ethereum are also very much into east and very much understand uh that eth needs to be

a proper economic asset and it is being kind of like designed that way and and means into reality that way so i think with ethereum you really do get the best of both worlds if you're an asset maximalist or like if you if you're into both maybe you're like a asset and builder maximalist totally totally i feel like we i want to transition you you said something that cued i think the next conversation but once again i want to do our mid-roll cut and say uh thank you everyone into the youtube who is listening here is uh the anthony cesano daily gray channel that i'm posting into the youtube chat which you should totally follow this is the friday bankless daily grade live stream if you guys like this content definitely subscribe to bank list and also subscribe to the daily grade where anthony does this five days a week which

is five days a week or six days a week five days a week not every every week day yeah every weekday on the daily way it's how i keep caught up with ethereum and here's what i think anthony we should talk about next you you talked about how the builders are always in ethereum and to me like this is a known metric where you know if you are a developer you kind of come to ethereum like ethereum has all of the developers off all the software builders and to some degree bitcoiners are like that's not even a metric that matters for us like you're supposed to not be a bitcoin builder we don't want you to build on bitcoin we want you to build a company that uses bitcoin like important distinction ethereum is like no no builders developers developers developers like that crazy meme of like

all the microsoft people like on stage going developers developers developers is it's a very known metric it's a known quantity because we talk about it but it's also the most underrated metric i think in this space because smart contract platforms which if you're ethereum aligned you kind of think that like the money of the world is going to be built on the smart contract platform and the beauty of ethereum is the symbiosis between a smart contract platform and a monetary asset smart developers and why connecting to what we were talking about east denver and why east denver is so [ __ ] awesome is because there's a bunch of developers there but developers are creating the like near infinite amount of surface area that is needed

for a monetary asset to do everything right every single time a developer touches the ethereum blockchain like ethereum just gets a little bit more interesting and ether the asset gets a little bit more useful and so this is this is this is the story of fundamentals like the i think it could be argued that the number one fundamental metric is the man-hour labor of useful dev work on top of public permissionless blockchains which ethereum has and has had since 2016 or 17 like 99 monopoly on and no i i think it's when you kind of think about it like that and you think about back to what we're just saying about what what what's what exists to serve what you know the bitcoin

blockchain exists as waste to serve btc um whereas like ethereum exists to serve developers i believe like where um it's it's a way to just get all these developers into the ecosystem to build on it and then as an ecosystem we come together and we decide how to drive value to eat as a community we don't just do it based on faith we say okay well you know eth is the economic reserve asset of ethereum so everyone should have eighth in their d5 protocols like each should be the first thing that you add support for whether that's for your new fancy amm or whether that's for like your money market like eight is always the first uh kind of like asset that gets put into any deep product on ethereum and that's because 80 is the most trustless liquid you know uh

highest market cap most kind of shop you know has that has a shelling point of ethereum because everyone owns eighth because you have to own a to pay gas but also you want to own eight because if you're using ethereum you're probably thinking to yourself how do i get exposure to all this activity well you buy each and i remember people making fun of um of of me and some others were saying this and maybe even like mid to late 2020 when d5 summer was on they were like why would you buy eth when d5 is just going to outperform it it's like well i mean the cat the cat the the jury's still out on that right and then the jury was out on that because now we've seen that d5 did not outperform eight over the longer term it actually vastly underperformed it and when people said that that was

the moment to trade your d5 tokens for you yeah yeah exactly and you kind of look at the chart and since d5 summer none of them have um you know recovered against eighth because each went on such a massive run right because at the end of the day the asset people want to hold in the ethereum ecosystem is eight like everyone wants to hold eight not everyone wants to hold your favorite default token like some people might have mkr some people may have uni some people may have like alcx and some other tokens out there but not everyone's going to have the same token it's not going to be that cohesive shelling point whereas with ethereum i would guarantee that everyone has eighth whether even that's just to pay for gas everyone has a little bit of eath and that's what separates eat as an asset

from the rest of the things on ethereum and that's why bitcoin is actually so um so so high in market cap a big reason is that most people within crypto own some bitcoin even if they're playing in in other kind of like coins traditionally most people have owned bitcoin now i actually think that my thesis one part of my thesis is that that would actually flip to ethereum or eth where a lot of people will hold maybe bitcoin and eat for a while and some other things but then they'll slowly and slowly move over time to the the better asset the asset that has the better narrative and i think that ethereum and eth has a better narrative than bitcoin so slowly over time that kind of that's a flipping that i kind of um i think is happening and i've seen it happen generally with

people that used to be 100 btc they now like 50 50 they started it probably like 80 20 or something but then eighth went up so much against bitcoin they they're they're they're kind of like portfolio gets very re-weighted like that so i think that that is a major reason why ethan has outperformed d5 but also because a lot of default tokens are you know people can't see beyond the valueless governance meme they don't realize that governance uh sorry holding a token that has governance rights gives them power to affect change and do anything within the system but you know if you can't do that right now if there's no value capture right now people just don't want to hold it it's a riskier asset the project's not not guaranteed to succeed as well whereas ethereum as a platform has like you know a much much much much greater

chance of succeeding and being there for the long term than one of these defy apps does so um that's why i think that that kind of like happened there but that's not to say that you can't outperform eth but but it's very hard it's very very hard to do it's easier to outperform ethan in a shorter term and it's harder to outperform ethan in the longer term and and i mean we can people who don't think that ether is itself an index of the ethereum ecosystem or so straight up deluding themselves like we can have some defy summer and like every single thing will outperform ether in some period of time but to some degree like as soon as you zoom out and like how many there were so many food farms and deep fry somewhere and i can only name like i can only name

like five things that came out of defy summer sushi swap yearn cream um yeah [ __ ] out after that like yeah i'm still around yeah but it's very small sure you know that's the thing like on the topic of yam i mean i love the the project i love the people working on it um but the thing is though yam was the talk of like the town in d5 something like everyone was talking about yeah right and now no one's talking about it as an idea though we were talking about yam as an idea and same thing with like comp like the yield farming uh no one was really intrinsically bullish on compounds they were bullish on on the idea and and over time um like when when you were buying

ether if you were an individual who's buying ether in 2016 like you would have like a very small handful of apps to talk about one of those things for example was pipith which is like decentralized twitter and so like you're like look at that look we have decentralized twitter on ethereum like look what we can do and in hindsight completely wrong completely wrong like makes no sense and so to some degree ether is the best index of what's going on on ethereum because things that go on on ethereum constantly change for the better because we went from ppith to all the d5 platforms that we have nowadays like orders of magnitude improvement and if you were just holding ether you got exposure to that over the long term not over the short

term but over the long term you got exposure to every cool thing that ethereum has done and so the improvement of the ethereum app layer has directly one-to-one like correlated with the actual improvement of the ether price that it that you see on the secondary markets i gotta run real quick you talk yeah yeah yeah i'll just i'll just add to that for the for the audience here um i think uh you know it's very interesting what david says about kind of like it being an index and a bet on the ecosystem because when you think about an index product you think that you know it's a long-term product it's not something that you're going to actively trade in and out of like they're not built for that and each was never built as an index for the for like the d5 or the ethereum ecosystems or

whatever but it is that for all the reasons i outlined just just before um and you know if and you know one thing that i actually think a lot of people don't consider uh in in in the western countries the ones that have capital gains tax like in europe in in the us uh canada you know wherever you are um that has capital gains taxes what you don't consider is that those taxes are denominated in your nation's currency whether that be us dollars or or kind of like euros or whatever it is not denominated in eighth so if you're trying to outperform eighth by trading another token you you have to pay tax on the dollar amount or the fiat amount that you gained you don't pay tax denominated in eighth which means that you could actually end up with less eth than you had because you pay more in tax

to get out of it so if you have performed eight by ten percent but the fiat value outperformed it by much more than that you end up paying more in tax and then you're left with less eight so this is why it's that's a two pronged thing without performing eight one you you're speculating on other tokens that are much riskier and people you know much more people don't want to hold it long term and two if your capital gains tax then you just wreck yourself because you're taxed on the feared amount so that's one thing that i think that uh you know this is why aid is such a long-term asset is that over the long term you get the tax discounts depending where you are um you know you don't have to worry about outperforming eth and you get exposure to the whole ecosystem

anyway especially with things like 1559 that are going to directly drive the value of ethereum to the asset and the activity and utility of ethereum to the asset so i think that's what a lot of people missed in in you know during d5 summer during you know even as early as 2021 people were still missing this where they were like will ether crew value and then again this goes back to what we're talking about before about people asking will eat the crew value then it's shot up to over a thousand dollars a bit it's all all-time high again and everyone was like oh yeah okay eighties is cool like oh i guess it will do that yeah yeah like flipping all this sort of stuff hilarious how like the recency bias of defy summer made people bearish on

eighth when they really should have immediately after d5 summer came down they should have sold all their default tokens for eight and just sat in eight for like the last you know few months the subtext of defy summer was oh you forgot about ether oh that's too bad like whoops shouldn't have done that you know what's hilarious fun fact for people that haven't looked at this july 17th yearn went live wi-fi token went live the price of eighth was 260 dollars right in july 17th right right and and and you know if you bought your at the very very beginning yes okay you out performed eight right but most people who bought beyond did not own wi-fi did not outperform eighth and eighth has gone to what it is today like 22.50 from 250

bucks and and but then even even you know before the crash it went to like 4.4 k from that right in less than a year and you and you know everyone was like oh deeply somehow and look at all the d5 tokens against eight literally go look at all of them tokens are flat as [ __ ] and ether did it 10x minimum it did a 10x it almost said 20x yeah yeah and this is why it's so hard to outperform 8th as well is that if d5 tokens are going down against usd and is going up against usd that means d5 tokens are going down against 8 as well so it's like a double kind of whammy there where they just get absolutely brutalized if you're denominated in ethio and that's what i denominate in i'm like david i'm sure you do as well

and i'm sure a lot of people in the ethereum ecosystem do and if you don't you eventually do because you're like [ __ ] i just spent all this money and i used my eighth to buy this thing and now i'm like massively down and eat i should have just held eight so the longer that goes on the more more people that experience that the more people just hold eighth and that's why you have like a stronger holder base with eight than you do with a lot of these other kind of things i think one thing i'd like to share with listeners and is something that's really definitely benefited me from being in the second cycle of my life right like had the first cycle got worked in 2017 thank god i wasn't playing with too much capital because you know everyone gets worked on their

first cycle the second cycle one of the main benefits that i've had is just moving really slowly and intentionally where in 2017 i'm like oh there's this brand new token of this protocol that i've never heard about all of a sudden i'm really bullish all night because i read a blog post let me go buy it really quick and then i would just be moving around and migrating my portfolio straight up just like not understanding taxes and not understanding like no straight up pla playing with like ten thousand dollars like as a portfolio size so like taxi like who the [ __ ] was is taxes and you're playing with ten thousand dollars like i was a [ __ ] like amateur uh and the second time around i see all these like oh like my friends messaged me is

like oh there's this new token i'm like oh that's great like but i like eth and so moving slower and more intentionally and more purposefully has benefited me because i don't make too many trades and the dude the trades i do make are more intentional and more informed and so overall my like tax events are lower and everything just feels feels so much more in control and i feel like i have a much more grip on the market than i than i did in 2017 and that's just because i'm not chasing like these random tokens uh and to some degree it's maybe because i established some amount of capital over the last like four years and so like i don't when you only have like 10 000 or less you're trying to like you're trying to shoot the moon um but when you

actually have an amount of capital that you want to protect like you're okay with moving slower but that's definitely a big difference between first comers like uni cyclers and and and multi-cyclers is the unicyclers like really like try and try and like fight hard for that 100x and the multi-cyclers are like i'm gonna i'm gonna play to the fundamentals like i'm gonna keep myself calm like i'm not going to get anything too risky because i know i'm going to win no matter what and yeah that's that's the difference really i think is that wealth accumulation versus wealth preservation right where you know during like your first foray into crypto you're definitely in wealth accumulation you're trying to you know make money wherever you can or however you can and on

whatever token you can and you do chase a lot of these smaller things but you end up losing like i remember in 2013 2014 i came out like at a loss because i started i actually bought bitcoin at 100 back in 2013. i traded it a lot of it away i traded doge and i traded something called quark and i traded a bunch of other [ __ ] coins out there as well yeah i it was my first for and i i lost a lot of it and then i ended up just selling my bitcoin um in 2014 at like 500 because it had come down from its all-time high um that was like just amateur hour like completely but the funny thing is and i've said this before um maybe on the refuel or something but for those listening in now uh in march of 2020 my portfolio was

like less than six figures like it was i was not a whale i was not rich i was not anything like and that was a portfolio that i had built up during the bear market as well like most of that was not profit it was just me buying kind of eight because um you know i bought most of my eighth between 50 and 100 because i didn't actually have enough money to buy a lot at ten dollars so and then and then uh you know obviously today it's it's higher than that um and you know it it affords me the ability to kind of do what i want to do but uh you know it's just funny how like fast things can change and how now i'm in wealth preservation mode i don't want to speculate on any of these kind of tokens at all but you know maybe if i had much

less capital i would even with my experience i would still be like i need to buy into this thing i need to 10x here i need 100 xtr because i don't have enough kind of like money right now so uh yeah i i think if people like are newer to the ecosystem don't like take this a as what we're saying is kind of like uh like you're an idiot for doing this it's just like the motions you go through when you're when you're in this industry for the first time to some degree like you have to go through these motions because you don't get to level two without going through level one right like you kind of need to learn some of these lessons and and honestly it's it's there's one thing like one thing you can do is you can listen to all the people that have gone into their

second cycle but those are really that's a really advice for second cyclers right like to some degree like you need to go through the first cycle with other first cycle people you guys need to do this together like straight up a right of passage type environment and you should definitely definitely learn to everyone in the industry because to some degree you want to understand a full spectrum of like this is why i listen to kobe kobe who's been around for like all four cycles i listen to what he has to say and i try and understand that but also i also respect the fact that like i'm not there yet like he's been around for four cycles i've only been around for two like i need to understand what that's like for him and and also experience what that's like for me because you don't you don't get to skip ahead like

you don't get to take take shortcuts like you put in you put it if you want one hour into this industry you put in one hour like you don't get to skip ahead yeah exactly and as i said the difference between knowledge and wisdom is this wisdom comes from experience and you're not going to get it you're not going to get the experience um someone can't experience it for you you know they can tell you what it was like but you're not going to feel the you know feel what it was like at all you're just going to have the knowledge of it so yeah totally um i i think that taking all that into account for newer people especially during these down markets is something important to do absolutely well anthony we're coming up to the top of the hour this was another fantastic

friday live stream uh to everyone watching apologies for the inconsistency in the live stream it's a 100 my fault been doing a lot of traveling recently but that traveling was to get me here in this like new apartment that you guys can see half put together behind me uh and so these friday live streams are going to be much more consistent moving forward anthony sign up to sign off on this live stream i think we should talk about something that we are excited for over the next two to six months when you when you see the next two to six months ahead like what gets you really welled up i mean one five five nine of course but i think at this point everyone's aware of that uh i think the other thing and maybe it's a little bit boring people now but the continued rollout of

ethereum scalability solutions you know particularly the layer twos that are coming online um and they're gonna be available to people you know people might think to themselves well why do we need these layer twos if gas is so cheap it's like gas isn't cheap guys this is recency bias again this is you saying that gas is cheap relative to what it was gas used to be one way exactly exactly it used to be very it used to be actually cheap if you think about it one way and and what's gas right now 10 great that's still a 10x right above what it was at one way so with with the layer 2 stuff we actually get back to that one way experience where you're going to have ultra cheap and fast kind of transactions on these layer 2's and that is the real benefit and consistently because layer one is

not going to be this shape forever like if the market heats up again you bet your ass would go back to 100 way like if we go back into like another bullish momentum we're going back up and as more layer 2s come online they're going to be eating more block space and we're going to go back up so i think just watching that over the next uh you know a few months uh layer two is continuing to roll out um is gonna be extremely exciting and also just keeping up to date with what's happening with the merge as well because that's still being worked on of course and that's scheduled for early 2022 hopefully but you know seeing that kind of go ahead and seeing that come along is is another exciting thing so those are the two things i'm paying most attention to right now and of course the continued

growth of d5 is just in the background even though it's a major thing it's just like trump it's like coming along doing doing what it needs to do i think um with regards to l2s i think something that people try i'm sorry also trying to find a link one thing that people forget is that there's a number of things that could only be built on layer twos that is distinct from just being cheaper fees and they also with these certain applications also need uh almost almost near instant uh uh confirmation times and so um there's just the thing about l2s is like it's all it's going to be absolutely fantastic that we can do the things that we're used to doing on the l1 but with very

fast confirmation times and cheap fees but there's going to be a whole cohort of new activities that we can only do because of the instant confirmation times right think about gaming think about just like i don't know claiming some sort of like i don't know some blackjack i think blackjack i don't know some casino thing there's a bunch of users being able to do yeah being able to do more high frequency trading is a big one because the oracles will be able to update a lot faster so that's that's a big one for sure um but yeah i totally agree with you it unlocks a whole new set of abilities for developers absolutely right and and so if we are in this bear market which i'm defining a bear market as flat with a slight down curve um congratulations guys like we are going to as a convicted cohort of

people experience what like early l2 adoption is like and we're going to have a ton of fun on the l2s and we're going to experience first hand so some of these cool novel applications because there's a lot of novel applications that came out on ethereum kind of like right after d5 was really proven i was like yo if you believe in ethereum you understand that this is what's up and then like a next wave of defy apps came where people who were convicted builders saw that initial like sign of strength and they're like okay well i'm also gonna build here i feel like that's what's about to come it's like oh yeah like l2 already proven out we know it's going i feel safe building here i feel safe like spending a lot of time here i'm gonna build something new i'm gonna

build something unique that specifically leverages the properties of these l2s and so i think for for the the second half of 2021 i'm i'm personally excited about seeing unique use cases come to ethereum because of what l2s have unlocked yeah totally agree with that i i think it's going to blow people away uh that what's going to come when developers get access to these new tools totally i'm trying to find the link for it but i'm not going to do it all right well if you're watching the stream and you live in san diego i made a san diego ethereum meetup group so go join that we're gonna meet up and and drink some beer and we're also going to end the stream so i can also go drink some beer with some friends but about to put

anthony's daily great youtube channel in the chat once again so if you like this content go and subscribe to the daily gray and anthony i will see you back here in a week yep yep and awake from today hopefully hopefully we don't skip it again yeah hopefully i promise i promise a legendary hey we hope you enjoyed the video if you did and we're done awesome man cheers all right i will see you in ga brother peace you