Extreme fear in crypto: sentiment, BlackRock in DeFi and macro with John Gillen

Transcript

Black Rockck is taking a buying an undisclosed amount of UNI tokens um and creating a strategic partnership with unis swap. So Black Rockck is going full DGEN into DeFi. What's up everybody? It's LGDA here and welcome to the Milkro Show, the daily crypto show that's daring enough to record a podcast on Friday the 13th because the real scare came on Thursday the 5th. Today is February 13th and we are in for a very poor Valentine's Day tomorrow. Although there is a bit of strength in the market today. Listen, the last three times I interviewed today's guest, the market literally jumped off a cliff within hours of our conversation, but I do think that the fourth time is the charm.

John Gillan, my co-host on Milk Road, is back to chat with me today as we recap everything that's going on in the market, his insider chats at Bitcoin Investor Week this past week, and what he's actually excited for, especially when it comes to Ethereum. Today's episode is brought to you by Sum. Turn crypto tax chaos into confidence. Bridge sends stablecoin payments instantly simple, global, friction-f free, and Warbucks, the easiest way to trade crypto. He's back. We're back together. Let's hope nothing nuclear happens within hours of this chat. John, >> yeah, well, we'll see how that plays out, but it's good to be back with you, LG. I'm excited to find out what we're going to talk about today. [laughter] >> You say that like there's nothing to say, and yet this guy spent what, two or three days at Bitcoin investor week this

week. You even had like a secret chat with Jordi Viser. Who knows what you guys were up to, maybe smoking a couple depression cigarettes in the back alley or something when you were talking. >> I was sipping a Celtzer and asking him questions about the emergence of AI agents in the Ethereum ecosystem. And um you know, he's he's still a very staunch Bitcoin, not maxi, but close enough. Um, but it's always fun to get a chance to talk to a lot of these um, major figures from our industry and and thought leaders off camera, off mic, and to actually hear candidly what they think and what they're what they're thinking and feeling. Um, and so there were a lot of conversations like that at Bitcoin investor week. So, it was a really good experience.

>> Dude, what are those people saying, man? Are those people were those people just as like confused last week when everything imploded like we were, or are they like, "H, whatever. I'm just accumulating, man. 10ear timeline. Are they what track are they on?" >> So, I think there was an article posted about this somewhere. I saw that said that it had turned from a Bitcoin pep rally into a copium session or a cope session. Um, and I think that it's kind of a matter of perspective, right? Because um, you know, Scott Milker retweeted that and said cuz I met up with Scott there as well and he said that I was there and that wasn't the vibe at all. It was very positive and like, you know, a lot of enthusiasm and energy and optimism about the future. I think there is a lot of that, but

there's also still a recognition that hey, this isn't really where we wanted. This isn't really where we wanted to be, where we thought we were going to be. A lot of us thought we would have the Clarity Act by now. we would have a lot more adoption and capital coming in right now. Um, and we weren't really expecting to see this huge deviation um, from bit between Bitcoin and the rest of the market and crypto and the rest of the market. So, there's some uncertainty. There's some a lot of people were caught off guard. A lot of people were not expecting this kind of a move. This has been a sharper and steeper and bigger collapse in many ways um, with more fear somehow than like the FTX collapse and the COVID collapse. So there there's been a lot of things about this that have been unexpected to to

every major participant or minor participant in these markets. However, I do think Scott is correct and overall the the a real attitude about this is one of opportunity and excitement. The the longer that Bitcoin and crypto stay at these price levels, the better and bigger the opportunity to accumulate that these assets becomes. And so I think that the for people who understand this technology, understand this asset class, and understand that thesis, they're really looking at this as an exciting opportunity to accumulate and get positioned. I think this is true of smaller players but also much larger players, right? So like we saw a report from analyst at JP Morgan last week or or maybe it was earlier this week, I don't know, time moves really fast this time this time of year, but anyway, um they put out a report saying that Bitcoin and crypto had entered levels of

valuation or price where the value was really attractive and it was a good time to start accumulating. I've heard that from a lot of analysts around here now. So, um, you know, look, I I don't know if we're exactly at the bottom, but we are at such a depressed level of price and have gotten here so quickly that people who understand this asset class and the investment thesis are very excited about it. And I think that that was kind of a big takeaway for me from the event. >> John, speaking of fear and greed, honestly, like it's something that a few guests have told me in the last couple months on the show where I'm like, listen, what's the best metric to track this stuff? Like, everybody has all these magic formulas and all these charts. But a few people have always come back to the fear and greed index.

And we actually have this on the milk road site now in in the crypto pulse section. So let's just take a look at it that yesterday it was at five which is extreme as extreme fear as you can really get. I've never obviously this thing has never hit zero. I think this is the lowest level it has ever been in crypto or something like that. And even if you zoom all the way out a year, we've only hit this level very briefly. Uh mainly kind of hung out there earlier this year or early or late in 2025. uh a little bit in April but not really mainly just in February uh last year.

And then if you zoom out five years, the only really like long stretch of time we spent in the red below which is below 20 on fear and greed is like the the FTX collapse like saga over the summer of 2022. Um which I believe it was that where we hit six uh on June 19th, 2022. Um so this is this is a very unique circumstance. Let's hope in the crypto world to be this low on the fear and greed index, but clearly you're telling me that the the the the people with the deep pockets or whoever they are going to that in New York uh are pretty unfased and are pretty pretty excited about this opportunity.

>> Yeah, I think that there's a a a big problem in sentiment here. I don't think we've seen this level of of depressed sentiment in frankly almost any market, including our market. Um yeah, and if it goes down lower than five, it'll just be me and the cockroaches left. Um, I do think that there is an opportunity that's being presented by the market and this the sentiment as I've said before is is exactly why I think that's the case. The fundamentals have not changed. Nothing has broken about the technology. There's no like, you know, like radioactive decay happening around Bitcoin. Um, it's it's more of a a sentiment thing, a fear thing. And that presents a major opportunity in the market for people who understand the thesis and are willing to look through the momentary panic and say that there's a lot of value here that's being um

under underpriced and mispriced by the market and and so there's an opportunity for accumulation. I call that an investment opportunity. So I think um that's been my attitude about it. I think a lot of people are like oh I I missed the top. I should have sold and blah blah blah. And like I I hear that feedback and I think that's valid to to feel that way. But, you know, we've also done in four months like a huge amount of bearish price action. And now I think we're we're at a point now in the market where it's like, okay, that the opportunity to sell to exit is is long since passed. So, you're you're kind of here, if you're still here, and the opportunity really is to accumulate and build the position because that new highs will follow that. If you look at that chart, all those deep movements

into the red are followed by recoveries in sentiment and then also recoveries in price. The most recent time we went down to this extreme fear was end of year last year when we saw the the Clarity Act coming into um a place where it seemed like it was going to get passed. That's when price and sentiment started to recover. And then when that um got pulled away again with Coinbase withdrawing their support, that's when we crashed again. Eventually Scott Bent, the secretary of the treasur was on CNBC this morning saying that he believes that we are going to see the recovery in Bitcoin and digital assets as soon as that act, that bill comes through. uh and I do think it will come through because there there's a need for that very much in the market and there's a recognition of that across all the

players and stakeholders in that that conversation. So I'm optimistic here. I think that this is a a very very difficult place to be from a sentiment perspective. But if you understand all these things that the fundamentals haven't changed, they're only getting stronger, then you're excited about that opportunity and trying to take advantage of it. It's it's absolutely insane to me that that day when we got the draft for the clarity act right on the 15th or when around that it was that week that the fear and greed index was at 61 right Bitcoin 95 so not even not even like a blowoff top bitcoin just the fear and greed back up to 61 and now literally four weeks later we are at five or we hit five yesterday like that is some ser at least on the sentiment chart uh that is some serious

volatility man like I don't I I haven't seen anything like quite like that um in our time in my time in the space. The only other time was FTX, but that was such a specific open catalyst that's like this huge market player has been messing around behind the scenes and a clear implosion whereas this time, sure, there's all these theories about 1010 and now February 5th and everybody's coming out with their reasons why we finally hit the bear. But I think it's I think the scariest part has definitely been that it's like we've needed to rely on all these analysts like even some of the guys we had on this week like Jamie Coots and everybody to tell us here's what happened and why it's happening versus there. I think it'd be better if there was a clear catalyst like the tariffs, like FTX, rather than like,

hey, Bitcoin is just doing this to you. >> Yeah. And I think that there's a lot of Well, I mean, there's a lot of data that you can look at that tells a different story, right? So, um I think that we're still seeing a significant amount of onchain activity. We saw a huge amount of of volume around this, which is usually a sign that you're getting some bottoming forming. Um and I think that a lot of this goes back to liquidity behind the scenes. um we we need a lot of things to happen this year to come through to change the liquidity environment uh around Bitcoin which will then lift the asset. But I think that you know the other thing too is like a lot of people are blaming 1010 and saying that maybe there's a big player in the market that's had their arm

broken and that they're like you know limping along and and dumping their assets. I don't really think that's the case. I think if you look at the the market behavior of um software overall in the economy and in the market and Bitcoin and digital assets, there's been this kind of like broad-based um rebalancing selling dispersion whatever you want to call it. Um the the overall uh indices are now starting to come down from all this selling. Um but there's been an enormous amount and a very unusual amount of of selling repositioning here. I think that's the beginning of the market beginning to understand the implications and impact of artificial intelligence. But I think in the case of Bitcoin and digital assets, they're misunderstanding the thesis here and eventually that will shift and come around and turn back the

other direction. But I don't think it's going to necessarily happen for a lot of these other software companies. But this is part of what this transition phase has to look like if we're going from this area of of of scarcity of intelligence and software as a service being a viable um business model. And honestly, they're it's it's a lot of sales, too, cuz like software as a service is is sold and people buy these subscriptions and packages and all this stuff and and they're not using a lot of it. But in any event, that business model is changing. The market environment is changing. A lot of these things are repricing accordingly. That is what has to happen in order for capital to start looking for other places to invest, other places to allocate and accumulate. And that ultimately will benefit Bitcoin and digital assets. as the thesis there

begins to distinguish itself and as this decoupling starts to happen the first time we get a strong bounce from Bitcoin that we don't see um from the rest of the software uh you know majors um I think that'll begin to be the first time the market recognizes the difference and people will start to um reevaluate these things that'll be a big shift and a turning point I think in the the story of Bitcoin here in the markets but um yeah it's there's just a lot of things going on and it's no one single thing I think it's very dismissive and kind of like inch deep analysis to say oh it was 1010 10 and after that the sentiment is all all destroyed. I think we're seeing a much broader shift in the markets and a much much deeper change in how people think about value and allocation of

capital. I think it's it's going to take time for that to work its way through. But I do think that Bitcoin is the pot of gold at the end of that rainbow and we're going to get there some one way or the other. >> So I want to pull up this article that Thomas wrote. So Thomas is our is our macro proriter um twice weekly free newsletter. There's a monthly long report that uh is very helpful to kind of get a big big picture view of all this stuff. Um and in this uh free newsletter that he wrote uh two days ago or yesterday, whatever day it was, February 12th, so yesterday. Um he is kind of painting like a rosier outlook, he's saying that unemployment is actually looking good, that payrolls are positive for the first time in a long time. Uh a lot of his healthcare jobs

and uh healthcare is out outpacing and that also transports are looking good in the US and that a lot of this is pointing to um like an economic recovery and the start of kind of this like larger business cycle. And he does he, you know, even though he's right about macro, he always does kind of throw in some crypto mentions and be like, "And for you crypto people, here's what that might mean for you." And he's always positive. He's always like, "Listen, this stuff is starting. This surely will mean that crypto will start to catch up and do all the things that it's supposed to do." But John, I feel like you you've got kind of a longer view on that or or maybe have a contrarian take to to it.

>> I agree with Thomas's analysis here. I think that the the way I would frame this is that economic reaceleration does lead to overvaluation of risk assets and speculation in risk assets that will benefit crypto, but there's a larger environment that has to take place for that to happen and it doesn't happen immediately. So, while we're seeing this economic reaceleration, we're seeing a lot of liquidity come out of the the financial markets and in the form of capex, right? A lot of these major companies that have sold off, one of the reasons is that instead of buying their own stock back, they're now investing that capital in capex this year. Um I think the the some of the bigger hyperscalers are projected to do somewhere around $700 billion of capex this year. I'm sure it'll rise from there but it's all been increasing right like five of these companies have

increased their forecasts for capex. Um that comes out of you know capital they could spend on other things. So that is a economic reaceleration right is going to lead to an economic reaceleration. It's going to lead to this rise in cyclicals rise in demands for goods and services in a lot of ways in the economy. But the markets are forward-looking. They are a tool of speculation. and they are a tool for um investment in the future, not in what's happening necessarily right now. So, the the strength in the economy that we're seeing, right, like we had the CPI print this morning, which nobody cares about, but it was stable, which is great. Um, as long as the I said this on our our our uh macro Milk Road macro pro um AMA this week for our pro community, as long as the dollar continues to weaken,

inflation remains relatively low and stable is the thing, not exploding higher. Um and we continue to see this strength and acceleration in private sector um employment growth. Um and the ISM which is the ISM manufacturing PMI which is usually a an indicator broadly that the the economy is reacelerating. As long as you see these things continue and hold the macro environment stays bullish that results in speculation and an overvaluation of risk assets which is usually the environment where we see these crypto bull runs, Bitcoin bull runs, alt seasons. That's the environment that happens but it doesn't happen right away. So we need to see this environment maintain and continue and then we'll see that come. All of this necessitates Dan Tapiro who was also at Bitcoin investor week. He put

out a tweet describing these circumstances and saying that there's a lot of liquidity that's needed. There's a lot of things that the administration is trying to do to create that additional liquidity. One of these things is this change in the ESLR requirements um which will allow banks to effectively take multiple trillions of dollars of US treasuries off the market and hold them on their books without any you know all else being equal, right? hold everything the same and just create a couple of additional trillion dollars of buying pressure for US bonds. That is a huge injection of liquidity. That's bullish. The US Treasury has around $900 billion in the Treasury General account. That's going to continue to come out as tax cuts uh and rebates um refunds rather um tax returns come back to the American consumer. That's going to result in a lot more um capital in people's pockets.

So I think there's a lot of reasons to think that we are in a high dem an environment of high demand for liquidity but that demand for liquidity will be met and as this economic reaceleration happens and continues deeper into 2026 this results in the conditions for a major bullish reversal in um in crypto which is everyone knows is the cure for all life's problems. So um yeah that that's what I'm seeing here. I don't know exactly the timeline. It could be the summer. It could be the end of the year where most people are saying the four-ear cycle ends and we start a new cycle. But whatever whatever the timeline on this actually plays out to be, the Trump administration is going to kitchen sink the market and the economy to get both to grow at the same time.

Right? They don't want to have the whole market collapse around them and just say, "Oh, we have a strong economy. Nobody cares." Right? So, I think that both of these things have to be achieved together and they're trying to do that. They're mindful of it. Scott Bassent understands these things very well and the incoming chairman of the Federal Reserve also does and the two of them are very tightly aligned around coordination of policy to achieve these outcomes. It may not work but there is a coherent plan to move in that direction and you know I think that's bullish and I don't see any reason why Bitcoin and crypto don't follow the rest of the market higher in that environment. >> Stable coins are reshaping the financial order but most companies don't have the opportunity to participate in the rewards they generate. Plus, launching a stablecoin means wrestling with complex

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platform connects to over 3,500 exchanges, wallets, and crypto projects, including full support for DeFi, NFT, staking, and airdrops. [music] It finds deductions you'd miss, reconciles massive transaction histories without losing track, and generates IRS ready reports that will help you pay the least tax possible. Oh, SUM is also the official tax partner of Coinbase and MetaMask, rated 4.6 out of five on Trustpilot. [music] Turn cryptotax chaos into confidence. Get started for free at milkroad.com/sum. That's sum.com. Milkroad listeners can also unlock 20% off their first year subscription with code milkroad 20. I agree with you and it's a very good case, but it really feels to me that crypto is somehow

immune these days to all of that. And maybe that's crypto's trick where it's just like, listen, all these fundamentals, all this good news, all this stuff, I'm just going to ignore my price action and just shake you all out. They're going to shake out anybody who's not a long-term believer and just reward the people that actually just hold through all of this, right? Because it just feels that way. this cryp when cryptos in the last couple months John is one of those things we're like it's happening to me personally like the the market it went out to get me specifically you know it's just one of those things you can't not take it personally when and you know and we do this all the time we do all these shows you do you macro show you do crypto show we do all these things newsletters that

all point back to be like listen here's why crypto should do good there's not we very rarely have reasons of why crypto should underperform other than well here's Ben Cowan and his one-year bare cycle thesis these technicals and Yet, and yet that's the most simple take and that is what crypto seems to be following. I don't I mean I feel like I ask you this every time we do a show together, but like what the hell's going on, man? Like why we keep saying these good bullish things, but when is crypto actually going to do this or actually realize that's what's going on? >> So I think the key word that you used there was seems to be what's happening, right? And this is what I think is going on here. Now I could be completely wrong on this, right? But this is my my

surmising of this. I think there's a a phrase in in uh analysis that we use a lot called spurious correlation. Things appear to be correlated but they're not. Right? Like a lot of this four-year cycle stuff everybody used to say was because of the Bitcoin having cycle. Okay. And then it was because of some other thing. Oh, it's oh it's global liquidity. What's the ISM? I I think that the the the macro conditions are what fundamentally matter here. There's a lot of things that go into creating that perfect cocktail, like I said, of macro conditions that allow for bullish price action in um Bitcoin and digital assets. But that the every time we see one of these cycles come back, the market landscape is different, right?

We've got AI this time. There's a whole lot of other places people are speculating. All the dens that used to be um going gigalong on Bitcoin with leverage are now doing that on gold and silver because the world is upside down and nobody knows what what's going on anymore. So, it seems to be that the four-year cycle is playing out, but I think that the the underlying drivers of that have shifted. I don't think this is a traditional bare market or crypto winter. I would call it a macro downtrend in digital assets there. Like I said, this is a big a lot of this is um not specific to crypto and digital assets even though like you said it feels that way. There are a lot of investors um in software who feel like they have just hit they're calling it the SAS apocalypse, right? The SAS

apocalypse. Um, so it feels like it's crypto specific, but it's not. And so like you said, it seems to be this way this way, but I don't think that's going to be borne out by the data and by the markets as we get deeper into the year and we get more information about what's going on here. Um, but I will say it's it's it's important to recognize what market environment that you're in. It was announced recently that Goldman Sachs is has a position of$ 1.1ish I think billion dollars in Bitcoin. They also have a position in Salana. It was announced recently that uh this week that Black Rockck is taking a buying an undisclosed amount of UNI tokens um and creating a strategic partnership with Uniswap. So Black Rockck is going full DGEN into DeFi and I mean not full Gen, but they are partnering into DeFi,

right? And they're coming into the Ethereum um decentralized finance ecosystem in a meaningful and real and committed way. that pump that we saw on the UNI token was immediately sold off because market sentiment is so terrible and retail investors just do not care. Right? So, there's a bunch of people who are here now who are either here because they're bag holders or because they wanted to pump do a pump and dump and couldn't get out in time. But, I think all of this stuff goes to show that there's this big gulf happening between sentiment and fundamentals. Eventually, that closes. Um whether or not the sirens are still here when that closes is another story. But I am going to still be here when that closes because that's that to me is the market opportunity, right? Like there's all of this capital and fundamental adoption and growth happening and everybody feels

like, oh, it's just the four-year cycle playing out over and over again. No, that's not the case. And I think that eventually we'll see that this has been spurious correlation and that will break down and the people who could see through that understand the deep value that's available here and accumulate while everybody else is making fun of them and selling off pumps. Um because Black Rockck bought unis unis swap token. Uh those are the people who are going to benefit the most from this. The people who are going to get rinsed by this are the people who are going to recognize eventually once price begins to recover that oh there is still value here. This isn't just all over. Let me go back and FOMO in and top blast you know the next Bitcoin euphoric blowoff and those are the people who are going to get um you know that's the capital

that's going to be um let's say not uh not capitalizing on this opportunity. So that that's the way I see this. But like you you can't tell me that Black Rockck coming into DeFi is bearish, right? Like I I'm not I don't believe you. So I I think that's where it is. And as long as it feels this way, it's going to continue to feel terrible. But it's not specific to crypto. It's not true. I think it's it's correlation to say that the calendar is what's dictating all of this and driving all these markets. And there's a lot more things being built here that are just not being appreciated by the markets right now. >> Yeah. Well, I mean, and that's the thing, right, is I was pointing out that, you know, last time fear and greed was low for a while. It was like, well,

FTX, there was clearly something that went wrong and we knew who was doing it. And this time, the fear and greed index is in the red for a long time. And it's like the opposite. Like during that time, you have nothing but this cascade of good news for crypto, right? So, it's funny to be in the same spot price-wise and almost calendar-wise and yet uh you know, you have the opposite news, but like you said right at the start of that whole rant is that uh what did you call that that there's some kind of principle or or idea that makes you think >> spurious correlation. Spurious correlation correlation >> they appear to be moving together, but it's just a coincidence. It's not because they're actually fundamentally related to one another. I feel like that's what most of our macro content is or not just us but like everybody else

would be like, "Well, let's just find two charts that look the same and then say that they will always be the same." [laughter] No, I don't mean that as shame towards Thomas at all. I just think that that I see that on crypto Twitter as well all the time. People like, "Oh, listen. Ethereum always moves at this like other random metric, you know?" Uh people just try and correlate them. John, before we continue, I do want to ask you about Ethereum and um AI as well because that's obviously like you can't talk about crypto these days without talking about AI. Before we do, I do need to just quickly plug um a little bit more about what we do at Milk Road. If you guys want to talk to John every day, you can in our Pro Discord, you can go there. If you want to talk to Thomas,

who has a macro newsletter, you can go and do that in our Pro Discord. Um you can go pro, all that information will be below here. If you listen to the podcast, you already know about Pro. Uh, but our community um is very tight-knit in times like these, really good at challenging us and also giving us a lot of ideas as to what to look at in the market. So, shout out to them. Um, and also shout out to one of our sponsors that we're actually doing a bit of an elevated promotion with them this this time. And don't don't just skip through this like you would with maybe some other ones um when you listen to podcast. No, it's true. That's what people do. Um, some who used to be cryptot tax calculator uh is is a fantastic software to use to do your

taxes for crypto which is very relevant for a lot of us right now and and last tax year was probably very interesting. um to go through and uh we have a a discount code for them for anybody who's listening right now for free users. Um you get 20% off uh some it's su mm. So you go to the website and you go through all the stuff to go to the checkout and you type in milkroad 20 and you get 20% off uh that full year subscription from them. Pro members actually get a little bit more than that or actually quite a lot more than that. So you have to be in the pro discord to to get that deal or get be signed up to pro emails to check that out. Uh but these guys they've integrated like 3,500 crypto apps.

They're available in like 200 countries. So, it's something that should be very easy for you to connect all your wallets to all your exchanges to whatever you're using to. So, make sure you check them out. And as usual, um you know, our pro community is always looking for more people. We want you guys in there. So, go pro when you can so you can harass John uh as much as you want and then ask me questions about weird DJ So, let's continue, John. Uh [laughter] our podcast. Um so, let's let's get to Ethereum because this is something that I feel like you're most passionate about. um and even talking discussing [clears throat] this with Jordy Visser at um Bitcoin investor week uh is everything that's going on in AI on Ethereum and it's something where it's like even for me personally when I log on to Twitter or X or whatever and I

look at all the people that I used to DGN with we used to trade memecoins and trade hyperlquids and all that kind of stuff and and a while back traded all the the kind of vaporware of of virtuals um they most of their content now is like here's how I'm using Claudebot like here's the agents that I'm actually programming to go out there and make money for me or do tasks for me, all that kind of stuff. Um, let's let's just dive right into it, man. ETH, uh, what do you how do you how are they pronouncing that protocol? 80004804, what do you call it? >> Uh, you call it whatever you want. It's ERC 8004. So 804 or 8004, whichever you want to call it, but that combined with X42, um, which is an API for microtransactions using USDC, um, I think is a really powerful unlock. I

think in the first 24 hours there's something like 13,000 agents that were launched. um just you leveraging this protocol. So what this is for people to understand this um I one of my big thesises on digital assets overall is that the adoption of the agentic economy of digital assets is going to drive an enormous amount of economic and uh monetary value to this asset class. Um this hasn't happened yet but I think like humans the way I would think about this is like human beings have sort of been the prototype users for digital assets and we've kind of like worked out some of the kinks. Um, but I think that the more likely scenario now is that crypto becomes infrastructure for the rest of the species that is is leveraging any sort of um uh financial transactions or or doing anything that needs to settle down to a base layer.

So, it's going to replace a lot of this like legacy Rube Goldberg expensive slow um uh security risk riddled machinery that we have as as settlement rails and um uh sort of like infrastructure now um with something that is secure, stable um and scalable and uh you know a lot of other great things about Ethereum and public blockchain networks. But that's just going to be what people do with that. On top of that is going to come you know something about 10 times the size probably um which is the agentic economy. agents doing economic activity settling down to the Ethereum base layer um is going to be or you know Solana or other base layers of of public blockchain infrastructure but that's going to be a huge driver of value. So what this looks like and what the the the prototypes that Ethereum is like

rolling out with this ERC8004 um it looks like this basically it's a a passport and a a reputation system for agents. So instead of, you know, LG, you know, you having to go and like specifically build an agent, tell it what to do, human supervise a lot of it, it can go out into an a marketplace of other agents and hire bots to help it with tasks that you give it. So rather than doing the whole task itself or having to like, you know, have you handhold it through the process, it can find other bots who have worked on similar tasks, who have reputation and reviews showing that they're trustworthy and did good work. and then it can use the X402 microp payment system to pay these other bots for the labor that they put in on helping complete those tasks.

So, it's like recreating the sort of like crowdsource um crowdfunding um economy that we've seen, you know, the the freelance gig economy that we've seen human beings have, but for bots and it's doing that with Ethereum Rails settling on in Ethereum on Ethereum. Um and so I think that that is a really bullish development and it's something that I think we're seeing. So the the the the head of the co-head of the Ethereum Foundation has just changed and it was announced this morning and I think that one of the things that stood out to me was it was specifically mentioned in the announcement from the Ethereum Foundation that there was a focus on quantum resistance continued development of um Ethereum and you know protection of the cipher punk values but they mentioned specifically AI and the agentic economy and making sure that

that the facilitation of that and its development on Ethereum and in alignment with Ethereum's values is a big focus. focus of the Ethereum Foundation. So I think that's a really bullish development to me at least to see Ethereum so clearly and um visibly pivoting in this direction trying to make changes and implement new protocols to enable this adoption of the Gentic economy. I think this is something that people have difficulty wrapping their heads around because we don't really know exactly how this is going to work and again this is still prototyping. We're trying to find product market fit. We'll see how this develops but to me it's a really interesting and um very bullish initiative that they're they're rolling out here. I think there's a lot of opportunity to be captured here, market share to be captured. Um, and so it's good to me to see they're trying to

find product market fit there. I'm I'm really closely following this because I think that whoever does end up capturing the the lion share of agentic e economic activity is going to be really well positioned for long-term economic success. Um, so yeah, you know, and I think that you get lots of different opinions on this, right? Like, oh, maybe there's no moat there. Maybe it's, you know, the liquidity will migrate rapidly to other other ecosystems back and forth. We'll see how all this stuff plays out. But to me, that's a really bullish development and it's something I'm paying close attention to this week. And then I just want to say this again, too, like we have major financial institutions that are buying altcoins.

That is a huge change and it's something that's only happened in the last couple weeks and everybody who has gotten bored or gotten washed out because of bad sentiment is missing all of these huge developments that are happening right now. And I just I still can't believe it. Like institutions are buying altcoins. This is a huge huge change that we're seeing happen here. Um, so yeah, it's I'm just very bullish and I'm getting more excited all the time and I'm I'm really interested to see how the Ethereum Foundation and Ethereum itself continues to grow and develop and pivot into this direction of trying to compete to capture market share in the agentic economy.

>> Are you going to use this? Are you going to build a little AI agent that works with other ones and does all your trading for you? >> I'm going to use everything, man. And I'm going to let the agents use it for me is the main thing, right? Like I want I want the bots to I want to learn how to let the bots do things for me and generate value for me. Um, and that's that's I think the direction of travel that we're going here. But yes, I'm I'm using a lot of AI tools. I think everybody should be. Um, and you know, you don't have to like force yourself into this, but I think it's it's definitely a point now where it's like, hey, you need to start paying attention. You need to educate yourself on what's what's available to be used because if

you use AI, it's just I say this all the time in crypto. If you don't pay attention for 6 months, you're a dinosaur, right? Because things change so much so quickly in 6 months in crypto that you're kind of out of date. It's the same thing with AI. If you're not paying attention to this, at least on a weekly basis, the developments and the speed of improvement in the changing landscape and the technologies and the tools that are available, it moves so quickly that you're a dinosaur. So, a lot of people think that chatbt is just like a a kind of Google that talks to you, right? And it's like you use it as a substitute for a search engine. Whereas now, it can do unsupervised tasks that last several hours that would take a human expert, you know, days to complete. And it can do it without human

intervention. It can write hundreds of thousands of lines of code without human intervention that compile and run without errors. There's really significant tasks that it can do. And there's there's been a lot of talk about this on Twitter that has started with a focus on code, right? So beingcoming really good at AI generated code because that will make this recursive self-improvement loop possible that will allow AI to get better and better at even more rapid pace. But that same sort of recursive improvement is coming to every other profession under the sun as well. Right? So it doesn't matter if you're a u you know any kind of like knowledge worker in any industry whether that's consulting or law or medicine or whatever it might be AI is going to have a a huge in influx of of power potential and impact on your industry that's

coming quicker and quicker. So I think the the value here is not using these tools to become a master of them necessarily but if you don't stay current with this this is going to overwhelm you like Elon Musk says like a supersonic tsunami. um and the availing yourself of these tools now allows you to be nimble and to benefit from some of these changes um and maybe benefit a lot from some of these changes as opposed to just getting steamrolled by it. So that's kind of the way I'm thinking about this. I'm not trying to become a coding expert or vibe code my own um you know salesforce.com but I am trying to leverage this and understand how it impacts the asset class that I'm most interested in.

>> Warbucks is the easiest way to start trading crypto. No deposits, no wallets, no complicated setup. Choose your path. One step instant target or instant funding starting as low as $40. Trade, stack profits, and withdraw on demand in crypto or USDC. Blow the account, you only lose the test fee. Reload and [music] go again. With Warbucks, you can profit from crypto moves in any direction, up or down. Get funded today at milkroad.com/warbbucks. Absolutely. And I think that that's that's part where a lot of people miss because they're so depressed in the bare market, right? Their price is down.

their their assets are down and they're like man maybe I just need to take some time away which is good go and relax go touch grass but at the same time they miss a lot of the developments that are being done especially under the radar as people keep moving forward and people keep pushing the medium forward right so I think that that you know there is a lot of home it's a good time to do your homework and to learn during these times so that you can really benefit and maybe hold the right assets or have the right bots or agents or whatever when we finally turn green again so um very well said man and and I feel like hopefully we can do a lot more content about this on Oak Road uh and learn about it together and and and help everybody learn about it uh as we kind of go and

as we wait while we wait John while we wait for for for the inevitable reversal. Um all right, John Gillan, it's it's time to wrap up uh our last three episodes. Just to recap them, October 10th after the Trump China tariffs announcement, we thought that that was the bottom. Uh and you told me famously that you you'll panic once we hit 100K and then we hit 100K 3 hours later. Uh we didn't expect that. So that was basically the 1010, but before the 10-10 collapse, we did a show. December 19th, we did a show going into the holiday break and I think the bottom the the local bottom from for December was 3 or 4 days later around December 23rd. So that was a reversal. And then last week, February 4th, we did a show together and the next day was February 5th, which had

that massive dip, that massive, you know, 75K, 80K to 60 dip on Bitcoin. John, what's going to happen between now and our next show? real quick. Give me 30 second rant on on where you where you see at least us in in the local term. >> I think we're going to see a gigantic bullish reversal. Uh no, but I am expecting I am expecting a bounce into March. I do think we'll see a recovery here because the the it's a it's a beach ball underwater, right? Like the RSI we're so oversold. We're in such deep fear that there's really only nowhere to go but up from here. Um so I do think we'll see a bounce into March. I'm I'm watching for that to see what strength that shows. But yeah, look, I mean, just to land the plane here, it's not just a it's not a bare market because you're

scared. There's opportunity everywhere. Just because this feels bad doesn't mean it is bad. Um, and I think that there's a lot of things that could come through very quickly that could rapidly change the sentiment and the price levels of all these assets, especially because there's so low volume and especially because shorts are stacked up so high um and poised for liquidation if we get a reversal. So, I would just say like stay educated, stay safe, stay bullish. You know, the same things I always say, but lean in in this time, right? like use this as an opportunity to educate yourself, give yourself an advantage, get positioned ahead of people, right? Like the the the pump on Unis swap token, I'm not necessarily recommending that as an investment, but that got sold off all the way back to where it was before Black Rockck bought it and now

it's still on the market for the same same opportunity there. And the thesis is only getting stronger. So, I think that there's a lot of opportunities here for education, for investment, for for uh giving yourself a leg up and setting yourself up well for the next huge bull market that we see. Um, so that's what I'm watching for. I think we're going to see this reversal. That's what's going to happen next. We're going to see some bullish price action here. And we're going to continue to see adoption um and fundamentals grow and every every conceivable metric in terms of total value locked in terms of investment, real world assets, tokenization, utilization of stable coins, wallets on chain, activity on chain, users on chain. Um and so it's just going to get bigger and better from here. And the AI agents are going to really really push

the amount of people or let's say agents, actors, individuals using crypto and crypto rails to new heights very quickly. That's going to repric very quickly and rapidly and so don't be wrong footed when that happens. >> I love the take, man. I love the positivity and uh I'm going to take that into the weekend. Thank you, John. Good to chat with you on this Friday. Uh and everybody have yourselves uh in North America at least have yourselves a wonderful long weekend and um we'll see John again. I mean, you'll see both of us on the podcast. you listen to the show, these are the two main voices you hear. So, plenty more of us coming down the pipe.

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