How To Position During A Market Crash | Weekly Roundup

Transcript

What you want to do when the prices go down, like the the math would say prices go down 10%, buy the things that you really, really, really strongly believe and just hold them for years. Prices go down another 10%, just keep buying if you have the cash, obviously and just just hold them and close your eyes and don't try to trade around these types of events. Just hold them for years. For me, I'm buying these kinds of environments. There's probably going to be more extreme volatility, but to me, I think that's a characteristic of a Trump presidency, not characteristic of April 2025. This episode is brought to you by Scale, the next evolution in layer 1 blockchains. Explore the gas-free ecosystem at scale.space/ecosystem and follow their journey on X at scale network. Thanks to

Scale for making today's episode possible. All right, everyone. Welcome back. I should say welcome to uh our first episode in the brand new studio. It's not brand new. I just haven't been here in a while. Yeah. In the in the studio that Santi is brand new in. It's a great studio. I see there a YouTube uh I've actually never seen that in person. It's like Block Works passing 100,000 subscribers. So So that's what you get, right? Yeah. This is what you get. How long ago How long ago did that happen? Look at this thing. Presented to Blockworks for passing 100,000 YouTube subs. Can I hold that? That's nice. This is solid. Yeah. When are we going to get the million one? Is Is that the next milestone? You know, it's actually We don't have the best. Ooh. Got a little mirror in it. We don't love to see that.

Um, now we've got this like house of brand strategy, right? So, we used to just have one channel. Now we've got like all these channels. Oh, right. Yeah. Yeah. But Empire is at like 20 now, I think. 20,000. Yeah. So, we'll be there soon. We just I mean, we got a 100x that rookie number. rookie numbers pump up. Uh so but they won't count like the whole they won't it's not the whole Yeah. Exactly. But we have one channel that's like 200,000 now or maybe 150 guidance. Yeah. That's really good. That macro stuff. By the way, shout out Ford Guidance. They nailed I think it was the single best podcast pontificator media channel, newsletter, whatever you want to call uh of all the media channels out there. I think Ford guidance Quinn and Felix just nailed this. what was going

to happen since uh I I think Quinn and probably Joseph Wang uh were the only bearish guys post Trump post inauguration in November. Yeah, I was I was very bullish. I was you know what we're going to talk about that in the pod, but we are recording them tomorrow. We're recording we're recording with them tomorrow and then that'll be released on Monday. So we're doing a big markets episode tomorrow that goes out on Monday for people that want to hear the now the skinny like why were they bears out of curiosity going into like after the election? You got to wait got to wait till Monday. Okay. You gotta go listen to it and have your friends subscribe to the channel so that we can get another one of those. Exactly. All right. Before we talk markets, um uh how's the New York trip? That's great.

Yeah. Very, very good. I mean, we're opening our office here outside this studio is my first hire. Uh which we uh pumped. Yes. Yeah. Honestly, it's a bit nerve-wracking hiring people. You have to just But the convincing side, everyone that I keep talking to is like, "This is one of the most ambitious things I've heard." Um we're glad someone's doing it. Uh, which I think is really rewarding. Yeah. People haven't believe in the mission. I mean, I'm sure like when you were getting started, like your first hire is like you never You know what's really nerve-wracking is when you start hiring people who are older than you. Oh, really? Yeah. Cuz I think your first hire is is younger than you and you're But when you hire like a you know, like a a real human like a 50y old person like, you know, that's like a

real human being who has children and stuff. That's when it start. You're like, "Oh crap." All right. So, we were talking about this cuz we grabbed dinner. great spot by the way. Yeah. Um of this idea of like hiring really senior people from outside of crypto and or versus hiring someone like super experienced from like a Bloomberg, right, for what you're trying to do versus hiring someone that is less experienced, a bit crazier, more agile and like maybe you want to talk about it, but like I think about that a lot, right, as like who to hire. Yeah. I mean, your first 10 hires dictate the whole company. you get one of those wrong, I mean, it's not like it's not going to work out, but like you're fighting an uphill battle. Yeah. All 10 of those will dictate the culture and the speed and the the the like caliber

of execution of the whole company. So, I I was very careful. First one's good. First hire. Yeah. I mean, you know, it's like a the wow factor because I've I hired um her and like 30 people reached out every day. I gave someone to reach out and say, "Wow." like it's always the wow you get wow you and I was like okay I want to hire more how how many more people are you hiring right now what open roles there's two main roles that I want to fill one is private equity person so at one point I'll hear a crazy story about we're looking at a big acquisition and I literally have like I was at the earlier today I bought this book of course in classic we talked about this a lot Barbarians Barbarians of the gay

right I actually worked for the guy Scott who was the first associate at KKR ended up starting Sage View. He did the deal the Nabiscoco deal which at the time was massive. So the host the idea of Barbarian the gates like you have to be hostile. You got to knock on the door. You're not welcome to the classic version of of private equity. Like I felt like that. I feel like I'm civilized, right? But you know everyone discounts you because you're like who are you? Why do you want You're saying in this current deal? Yeah. Like you know company X is up for sale. I knew about it. I was like I want to get in. like, "Let me in." And they're like, "Who are you?" I'm like, "Yeah." They think you're not a serious buyer. Yeah.

Yeah. I was like, "You're not Apollo. You're not KKR or whatever." I'm like, "Guys, like just what do you care?" Like, so it took me months of convincing. And they still wouldn't let me in. So, what do I do? I'm like, I'm sitting there. Okay. I'm gonna lob in a bid and force their hand to introduce me to the client because once you lob in a bid, they have like a legal responsibility. So, who do you want? You want a private equity? Private equity. Do they need to know crypto? I mean, they need to know about it, but it's more for our strategy. It's a private equity principal, pretty senior person that has done deals before, but really knows fintech and telco. Nice. All right.

That's one hire. What's the other? That's one hire. The other one is engineer like head of engineering. Head of engineering like a CTO type title. I Yeah. So there's like companies that I admire like our northstar is making crypto invisible. Yeah. So I want to hire someone that has built that. You need a very good crypto native engineer now. Two engineers really. One that handles all chain related stuff like knows the architecture in and out livveness you know security validators all that stuff. The other one is more of a product person. So there's two I guess I would split it in engineering like all chain related stuff and I have really good candidates there that know the architecture know everything chain related stuff the other one's a product person nice all right let's go so three hires I'm not I don't know like how quickly block works were in the early

days I think you're like we were still like eight people by year four or five I think we basically our growth is like I mean we just kept it really tight I think maybe I think we were probably 12 people actually by one two three four probably year five we were 12 people and then we went to like 40 then 60 then now now we have 85 I think is that more a function of like there's just more stuff to cover in crypto yeah and plus you launch the data the research piece um yeah yeah it's just more more more stuff to cover but also we I mean it took us a long time to really figure out what we were doing with the business and until you get ext like now we have what I would call extreme product market fit where the the

way the best way to define it is like the market is pulling demand out of the business like we can't keep up with the demand Yeah. And that's that's what product market fit feels like. We we always thought we had product market fit, but you we really didn't. Um I just saw the update. I mean, you guys killed it in DAS investor update. Yeah. Yeah. I mean, it's like biggest quarter in history by far. Like it, you know, and by the way, usually it was very correlated to crypto prices, but like prices have gone down. Last quarter was like pretty brutal and you guys still delivered on that, which is again I think we're in that if that recap we did right after D, which was there's more interest outside of crypto than it is internally. That bodess well for Yeah, we just signed our biggest

data deal in history with a non-crypton native company. Like feel we feel good. So, um awesome. Well, congrats, man. Thank you. Yeah, I'm excited. Our office is going to be in New York, so I'll be coming in in this room more and more often. This episode is brought to you by Scale, the next evolution in layer 1 blockchains. With a gas-free, invisible user experience, instant finality, and robust security, Scale allows for limitless scalability, and has already saved its 50 million users over 11 billion in gas fees. Scale's high throughput, zero transaction costs, and powerful web 3 infrastructure make it the ideal platform for gaming, AI, and other high throughput apps. To explore

the gas-free ecosystem, visit scale.space/e. space/ecosystem and follow their journey on X at Scale Network. That's Scale spelled with a K. Thanks to Scale for making today's episode possible. I wanted to take a moment to tell you about today's sponsor, Zenrock, the permissionless decentralized custody network backed by one roundt partners 10T, Maven 11, and Spartan. Now available on Jupiter, Rock is the native token for transactions within the Zenrock ecosystem and secures Zenrock's decentralized custody network. The first application launching on Zenrock is ZenBTC yieldbearing Bitcoin on Salana.

ZenBTC will be live in April 2025. To find out more, you can follow Zenrock on X or click the link in the show notes. Um, all right, let's talk markets. So, I mean, Liberation Day, so recording this on the 10th, this will go out on the 11th. It's the afternoon on the 10th. And the reason I say that is just one of those weeks where markets are changing so quickly. Um, one week ago we had, you know, liberation day or whatever the hell we're calling it. I guess we are calling it that now. Um, and I mean the markets just puked, right? Equities went down 20%. VIX shot up to like 40 plus. Yeah, VIX went crazy. Um, interestingly, Bitcoin only went down, I think, several percent, I think maybe 10%. delay though in the first day of liberation day it held up

very well and everyone came out of and I was like guys just just don't you're calling it I felt that they were calling too early I'm like give it another day but it did perform very well which was interesting um it has so far so far yeah yeah yeah um and then I mean longer tale of crypto assets got got clobbered soul fell below 103 below 100 hit like 989 yeah that's right I get I had alert I have these alerts of like when I want to like buy stuff and it was like I got the alert of below 100. ETH went below500.

Yeah. I mean it's the lowest level and it's been since 2017. Yeah. I saw I think it was Alex from Nansen was like, "Oh yeah, when I got into when I got into crypto, ETH is at the same price that it was when I started building." Simon from Moonrock was like, "Why should ETH like ETH is at the same price than it was 2017 and 2017 we didn't have all the stuff that we have?" Which we should talk about like the price of ETH. Let's punt on that for a second. So what I want to hear is um what did you do in those days? Did you sit like when the market pukes like that? Are you in?

Okay, look, cuz there's one mentality that says, look, the buy any dip. Something falls 10%, just start buying dips. If it falls another 10%, start buying more dips. There's another mentality that's like we're in the fog of war, right? Don't take action in the fog of war. Let things calm. You might not you might not catch the absolute bottom, but like this is the fog of war and don't take any actions. Tell me like what you actually did and what did you get right and what did you get wrong? Oh, well, I've been here running around meeting, so I don't I don't have that much time, which is I think a a blessing. Uh I think sometimes you do dangerous stuff when you're sitting in the chair and like in your desk. Um but um I sold some soul that I had unlocked um you sold right when the market

started puking or you sold at the at uh last week. So it was like soul is like 113 or so 114. Um you were selling because you just got the soul unlocked or you were just like I want to I want to get out of things on the on the risk you're selling. It's like uh less than 5% of my position or less than 10% of the position. It was uh actually 4%. So it was like a small amount. Um never hurts to have cash. Yeah. Um I wanted to have a little bit more cash balance more because it's it's like a it's a very personal question when when people say what should be the optimal allocation. It's just I want to be in a position where said differently if there's a couple versions here. If my calculus was okay if soul rips again to a thousand

it's not going to hurt as much. I sold 5%. if there's a version where soul goes down to 70 or 80 like anything is possible in this space. So I just want to be optimizing for inverting and saying I want to be psychologically in a position where if I sell now and it goes to 70 I'll be extremely excited to buy back if I don't sell anything right now the FTX price like 66 bucks or so 60. So I was like it's going to hurt and I'm not going to be as inclined to put on the position again. I just know myself.

Yeah. And I just wanted to increase the cash balance a bit. I rotated that into buying ball. Uh I just think it's going to continue to be really choppy. And so my calculus was like, all right, what what can I within a year's time, who knows what the price of soul is going to be. There's a lot of things that dictate into that. But I do think that's going to continue to be really volatile. Like the trade war is by no way, shape, or form over. markets are going are going kind of berserk on the on the on the sort of the daily of what happens on the hour. So I wanna when VA is like this I want to buy structured products like the coupon that I'm able to get. So like I bought with with that position that I sold sold I went and bought uh what is

called I've talked about this extensively here like the it's called Phoenix or reverse auto call convert. What did I Do I do S&P? Like so S&P long the market with an 80% bear, meaning I have a 20% cushion and and so as long as I won't I won't I will get called if at the strike level, if the market goes up, I get called after a quarter or so. So I clip some coupon. Y if the market continues to go down, it can go down until, you know, that that buffer of 20%. So that V I think I get comfortable with. Yeah. Um and as long as that's the case, I get paid a really good coupon. It's uh 17%.

That's pretty good. I want to go long the market. I don't want to buy it right now. I don't want to like scale it into buying the market cuz I still think it's going to be volatile. But this is a good way for me to express a view. Worst case, the market goes down after a year where this gets re like at the end of the the 10 the period. The worst case is at the end of the year the market is below 20%. From where it is now. So for that I talked to like JP Morgan, a couple of players. Like what's your revised target for the market? Are we going to there is a version where the market continues to puke and goes down more than 20%.

Absolutely. Proistically, I think it's less of an outcome, but I'm happy to buy it at that level. I'm not happy to buy now go long. I want to earn cash flow. Okay. And that and that coupon, by the way, before the vol spike was like 7%. Yeah. 8%. It literally doubled. Yeah. Overnight. So you're not buying, you know, Bitcoin hits I think Bitcoin hit 75, maybe 76. You're not buying, you're not you're not just like just a spot buy of something like a Bitcoin or, you know, I know you believe in Coinbase stock like you're not just like spot.

No, I when V is like this, I want to go long V. And I think when when structured products for me have been a way to capture a lot of income with size. Nice. I don't need more crypto long exposure. I am levered to the tits in terms of my career, my portfolio, my family office, my venture investments like you know like at some point um you have to diversify and for me it's been a good exercise over the last couple years where I'm unbothered you know that meme unbothered moisturized face uh there's so many like Bergkshire Hathaway we talked about it here that's like $300 billion all the memes that were on crypto Twitter and just uh you Wall Street, Twitter, like the guy sitting on

$300 billion of cash. Yeah. It feels great to have cash when markets are doing their thing. Yeah. Right now, it does. It It also though feels good to It feels good to have cash. It also just feels good to have the mindset of someone who's been in crypto for a while. I mean, I don't know if you feel this way, but when markets go like I actually tweeted this. I said several years in crypto really warps your mind. Markets were t I mean, it was it was Wednesday or Thursday and markets were just tanking, right? worst week since COVID. Uh biggest two-day wipeout in the history of the equities market. All my, you know, normie friends who work in private equity and in hedge funds got a group group tax. They're they're panicking all all out panicking. My I don't again I actually don't know if

this is a healthy thing or not a healthy thing. I register zero ounces of panic. Yeah. And I think it's because, you know, there have probably been three or four or five days in the last couple of years where your net worth, if you work in crypto, has been cut in half in a 24-hour period. Oh, yeah. And that's not a normal phenomenon, but it's very normal for crypto people who have seen many cycles. So, when something like this happens, my mindset is literally, oh, look, prices are down bad. eventually they'll go back up. Just keep holding and just don't sell. And the key is survival and the key is positioning yourself to no matter what happens optimizing for the peace of mind. Like sleeping well at night. Yeah. Again, if

you're levered, you need to constantly be monitoring prices. You're going to get liquidated and the fear of being liquidated, being marginal called is not nice. Yeah. Again, like you just sort of assume that like in this asset class at any given moment in time, the price can go down in half or more. Yeah. And so you invert and you say, "How do I make sure that I'm super long this space over a 5 10 year period? I never want to be in a position where I can compromise my ability to be in the game because if you get liquidated, you're going to want to leave the space and you're not going to have any capital left." Yeah. Um so so again, I think but yeah, I mean it was just just to recap the magnitude of what happened in markets like there there was a good tweet by

intern who I think then got quoted on a Bloomberg piece. Yes. which is just like all you guys in tradi have like the he said I like how all we I like how we all thought crypto was going to grow up but the rest of finance just came down to meet us you had the C I think it was the CNBC thing about the there was a before Trump actually announced the 90-day pause there was a the fake news there was a fake news that we were pausing the markets markets shot up 10% back down 10% there was like a 2 and 12 trillion everyone in crypto is like oh this is the Cointelegraph intern tweet we've seen thisally Yeah. And then I mean let's do a recap of what happened uh yesterday I think when the actual pause happened. Apparently Trump tweeted like

now's a good time to buy. Yeah. And then this happened. He tweeted in the morning like now is a good time to buy and then on true on true social and then he tweeted I mean and then they announced the uh the the what did they do? So they did a 90-day pause on all tariffs and then but announced except China which they're increasing the tariffs on China. 124 or something now. 105 Yeah, something like that. Yeah. So, I mean I I I I feel like I mean in in in the end, my take on this again, I'm like the worst person to listen to when it comes to macro. I don't know what I'm talking about. Ladies and gentlemen, we are not macro. Go. I mean, people should listen to this episode that comes out on Monday with Quinn and Felix because they they

actually nailed this and they they are the experts. But to me, it feels like almost all these tariff negotiations and rhetoric about this is is just to get China to do a deal. Right. It's it doesn't feel like a big uh it feels like China is the the big kahona here that we're that we're going after and everything else is kind of just like um negotiation posturing and yeah, that's what it feels like. This episode is brought to you by Scale, the next evolution in layer 1 blockchains. With a gas-free, invisible user experience, instant finality, and robust security, Scale allows for limitless scalability, and has already saved its 50 million users over 11 billion in gas fees. Scale's high

throughput, zero transaction costs, and powerful web 3 infrastructure make it the ideal platform for gaming, AI, and other high throughput apps. To explore the gas-free ecosystem, visit scale.space/e. space/ecosystem and follow their journey on X at scale network. That's Scale spelled with a K. Thanks to Scale for making today's episode possible. I wanted to take a moment to tell you about today's sponsor, Zenrock, the permissionless decentralized custody network backed by one roundt partners 10T, Maven 11, and Spartan. Now available on Jupiter. Rock is the native token for transactions within the Zenrock ecosystem and secures Zenrock's

decentralized custody network. The first application launching on Zenrock is ZenBTC yieldbearing Bitcoin on Salana. ZenBTC will be live in April 2025. To find out more, you can follow Zenrock on X or click the link in the show notes. I heard there were some crypto funds that actually uh got completely smoked some because there's, you know, there's this big trend of like liquid crypto funds now. It's not just the venture firms, but some liquid crypto funds I heard got really smoked. Yeah. Um, let me get your take on this. Um, Mike tweeted out. He said, "I believe the four-year cycle is broken. There won't be buller bare markets as we've previously understood them. Best guess is periods of up only, 9 to 12 months, followed by periods of chop solidation, 3 to 6 months, massively healthy

development. Um, what goes into the thinking there?" Um, I think I think the thinking is that like the if you were going off the four-year cycle, this is the second half of the end of the bull market, right? If 20 it's like 2017 is the pico top, 2021 is the pico top, 2025 is the pico top, right? All the four-year cyclers would have said 2025 is the is the is the big end boom of the bull market. Look uh money supply M2 is like the most important thing. Yeah. Yeah. The price of Bitcoin entire asset class is a risk asset. Yeah. So I come at it from like that's one point. So of course it all

computes into what's happening with rates and QE or QT. So that's like one simplistic take. It's like whatever whatever M2 is doing risk assets are going to you know follow. I come at it more from a what is inherently like specific about crypto that may or may not factor. I think it factors in a big way which is couple things. One everything is so tightly correlated with Bitcoin. Yeah. Um that my thesis there is that cor tightly tight correlation decouples because one's a commodity the rest is not a commodity. like but the market doesn't I I don't I'm not here going on the record saying that that's

that correlation is going to break. I do think over 10 years the correlation of a an asset like bitcoin is very different than salana ethereum um so we say hype all the different assets they have cash flow one does not it's a commodity right so that should decouple as the space has more institutional capital as we develop valuation frameworks of cash flow there's like a whole resurgence of bare markets of like fundamentals and all this stuff but like you know that should over time decouple as the asset class continues to grow as more flow come in. Yeah. And you started to see that in some way like the I always think that in a perfect world you understand if if a hund00 million or a hundred billion dollars is going to come into the space over the next 5 years, are

they going to buy Bitcoin first? Because that's historically what has been done and how are they going to express that view? Well, now you have ETFs. So that also computes into how is this going to manifest itself, right? Because there's different ways to express a long crypto thesis. You can now buy Robin Hood stock, Coinbase stock, Circleative. Let me tell you. So we talked about what you did, what I did. I did the uh you know the very retail thing. I just uh didn't do the cover call Phoenix no whatever you know we're talking about how he's treating me I you need to advise your your your poor friend over here and uh tell I mean I literally just started buying I bought Robin Hood stock I bought like Thursday reached you know reached out basically said Robin Hood stock I mean I I I'm

understanding as I speak this out loud how retail I sound I bought Robin Hood stock Nvidia yes um Coinbase stock and then the market went. So that was Thursday. Then the market went down even more. You bought some more. Bought some more. And then I also bought cash. Then I also bought uh started buying this is when I got a little spooked because you can see it. But I bought the S&P and I bought Bitcoin. Right. And then um the weekend came around and I just started buying more Bitcoin. Yeah. Over the weekend. Uh I think it was Sunday into Monday started buying more Bitcoin.

Bitcoin was like uh sub 80 76. I think it was 77 787 79 something like that. So give me advice as well well I want to understand so say you had $100 to deploy how do you express that view and what time but like how did you think about because a lot of the conversations I've had with people is like Jordy for instance um game you know he was he came out saying early on like I'm going to pilot a bitcoin like this is the time it's holding up really well and then he was like oh I'm going on the record like I may have scaled too fast like then it was like 5050 it roughly came out to 25% the S&P, 25% uh 25% Bitcoin. Yeah. 50% uh spread between Coinbase stock, Robin Hood

stock. In what time in what sequence? Like how did you think about I have $100 because a lot of people might be sitting today listening. I started with the equities because to me I'm like and this is the reason I'm bringing this up at this point in the conversation is because you were mentioning there's all these other ways to get exposure Yes. to things now like the old me would have been buying Bitcoin, you know. No, but not just Bitcoin Bitcoin ETH Soul uh uh you know, Sooie, Aptos, Hyperliquid, a I would have been looking at different like tokens to be buying. I It did not even cross my mind to start looking at entries into tokens. It did not. And I am like I am about as exposed to crypto as you can. By the way, this is interesting observation because a lot of

people that I've talked to about this also did very similar. not retail like funds. They're like the the real the the question constantly is is am I how many units of risk am I putting on the table to get this type of return? And um I guess the argument could be made that you're going to get a really good interesting return profile by buying Robin Hood if they tokenize stocks, if they continue to become more efficient and the market's going to really reward him. By the way, they have limited downside relative to some other token that has an unlock coming every six months or so. And and I guess you're not like once you do that calculation of the

nebula's riskadjusted return, I think a lot of people come to the conclusion in this environment, hey, I don't feel like I'm getting paid enough to take that long out exposure because I can get a really good return of Bitcoin. I can get a really good return with Robin Hood or Coinbase. You know what it is? is because I was really reflecting on this over the weekend. I was like, why did I just buy Robin Hood and Coinbase in and Nvidia instead of, you know, and for me it comes down to the the uh the alts game has gotten a lot harder. Yeah. And um to me, I'm looking for, you know, I'm not going to go buy like an index product actually like a top 10 or top 20 because so many of those products,

basically what I'm looking for is general exposure, long exposure to crypto. Yeah. And the the products that exist on the market today are like, you know, the Bitwise 10 or things like that. I don't actually like those products because they include all these coins that I don't actually like. Like, you know, the Cardanos and DOTs of the world are still in there. Um, and so I'm looking for general crypto exposure. And to me, things like Coinbase and Robin Hood are the best general exposure plays. And actually, there's a Ryan Watkins tweet that I thought nailed it. Um, and he said, "The altcoins are cook narrative is so lazy. It doesn't take a genius to figure out that 99% of them will fail. Given there's no barriers to creation, they all carry venture risk.

The 2017 to 2022 era was a moment in time given speculative demand for alts vastly outpac the supply of them. Um, this is no longer the case with an abundance of VC dexes and token creation pro uh platforms. Uh, the point is that altcoins aren't cooked. The point is that it now takes skill to filter signal from noise. Yeah. And I think if I'm being really honest with myself, this is why I bought something like Hood and Coin is because I know I used I had I used to have edge in crypto. I used to real like I used to think about what I I feel like I at least I feel like I had edge or I felt like I had a really good take on which liquid tokens are going to go up. There are now so many people like Ryan Watkins spends all day every day

look, you know, the the um the Thea guys spend all day every day looking at the liquid markets. I'm not doing that anymore. Yeah. By the way, um I have some thoughts on there, but um to your point, I I think about this in in the context of AI too, meaning I don't have any edge. So, what do I do? Do you Well, and I asked this a lot of of I've talked to a lot of venture funds that are now focusing on AI. I'm like, do I really think that this manager is going to outperform the S&P? Yeah. And like all these venture dollars are going to fund startups that are buying capex from Nvidia, right? And by the way, there's all these public companies that have the data like

Microsoft that are going to reap the benefits, right? So why am I sitting here trying to either directly or indirectly through a manager do this art of picking with a lot of venture risk power law distribution with by the way AI is just one of those places where you the displacement factor is really high like you have deep seed come along and say oh with 5 million we can upend you know what I mean like I I just feel like Peter the has actually a really sober taking out which is like 99% of all the startups is going to fail you could argue that the S&P is going to outperform nine out of 10 of VCs that are investing in AI. I mean, you mean and so it's like why why and you've said it time and time again, which is you have your business, you're building this

company. This is where historically people build real wealth of like building a business founder mode uh you know Warren Buffett of the world, Mark Andre's of the world, people that have built companies, people that are sophisticated investors say Warren Buffett made that famous bet with all the hedge fund managers, right? half a million dollar bet and he said the S&P you're not going to beat the S&P. Most funds don't beat the market. Yeah, they didn't beat and and Buffett won that. And Buffett won that. This is a sign of this is a sign of crypto as an industry maturing though. I agree. It is. That's a good point. Yeah, because the people who are the stock pickers, the token pickers, they're they're professionals now. Yeah. You know, yeah, give or take.

But yeah, they are becoming professionals. We've got people like Dave Kulk coming into the market and you know um although the the counterargument to all of this is um you still have the top 10 is mostly projects that have launched and had have had an early mover advantage on the attention game. Ripple Cardano what is the top 10 right now? Um it's it's so let's go through that. Top 10 Bitcoin ETH early ETH early. So, Tether skip Ripple. Well, te Tether you could argue early in the stable coin game and had the massive benefit of Tron deploying it. Okay. So, so still early Ripple early BNB early and and distribution of

Binance USDC early Salana Dogecoin Dogecoin one of the first meme you know not one of them but early Salana one of the first 0ero to1 like high throughput blockchains what else dogeon Cardano that's the Tron and Cardano all of them all of them are prior cycle coins that have won the attention of a base that it's funny even the top 20 then you push Beyond that says ste Bitcoin so ignore that Leo Leo is 13 bit yeah exactly uh USDS stable chain link early yeah Avac Ton Toncoin is probably the only one that's not early yeah and Avac is

youngest yeah yeah yeah um Hideera or the this isn't circulating right or fully deed but nonetheless I think the math still the premise holds um Hyera a lot of these guys are mostly Yeah, Hideera was early. Hideera, Stellar, Sheibba, you know. Yeah, there you go. Hype is probably the So, again, we we covered this in the pod. Um, last of the new things. So, if you push in, the biggest one that's probably new is Sooie. Suie Sui say yeah, Sooie, Apttos, maybe Hype um Hyperliquid's 30. The We've talked about this in the pod just as a I'll bring it up again. I don't know if you have any more reaction to it, but as a fund, it's become harder. This cycle has been quite different in that if you

didn't have exposure to Bitcoin, Salana, Hype, and one or two other assets, you underperformed the market. You underperformed the benchmark, which is Bitcoin. That wasn't necessarily true in prior markets where to your point, you could have just gone long as spray and prey approach. Yeah, that's to your point another indication the industry is maturing. Like the stock picking game is very much like you either did that well or you didn't. And so if you're going to go out and raise from investors, whether you're primarily liquid fund or a venture fund, if you weren't in very specific names, it's not the game has become much harder and will only continue to be much harder for a couple reasons. One, there's just more funds like investors. There's like liquid

funds and venture funds. The amount of capital in privates is like continues to grow. So you get squeezed out around that's more competitive. So the the alpha there degrades when there's more capital chasing deals. um like multi-billion dollar funds, right? Then you have liquid funds, which I would argue that that's where the most amount of opportunity exists, continues to exist. There's less capital in this market environment. You can pick up stuff that, you know, the valuations are like below the prior round. You could argue, hey, maybe Ethereum trading out where it was at 2017. I actually don't think personally I would buy it. I think that is cooked. Um and but you know you could you you you you have the opportunity liquid side like like the Davids of the world like come in and are

very sophisticated. Yeah. Uh there's still more opportunity there. But the other point is all that capital may just go to express views in different ways. Yeah. Through the ETF or just Coinbase, Robin Hood, more companies that as more companies continue to adopt crypto. Yeah. Why not express a view that way? Um interesting thing that happened this week was uh I just saw this. So, Athena, I'm looking at the US uh let's see, SEC filings digest. Uh TLGY Acquisition Corp signed a non-binding letter of intent with the Athena Foundation to explore a potential partnership involving the acquisition of a validator business and the purchase of up to 100 million in ENA tokens uh ENA, which is the Athena token at a discount. Um there's actually all

these I'm sure you get the same pitches. There's dozens of these companies if you saw the Kraken guys, Marco Santo, the the Salana, Micro Strategies. Yeah. So, there's actually all these business. So, there's obviously the ETFs. There's like a precursor to the ETFs getting created for like Yeah. Actually, probably that top 20 that we just listed. I'm sure you get the same pitches that I do of like, yeah, we're just creating a micro strategy for insert your top 10 token. Um, so there's there's all these happening. Yeah. um how does so I guess uh just to round out the discussion on both macro and allocation. I mean there there might be a lot of listeners that um still have um have been sidelined or have capital to allocate. We're going to

talk about it tomorrow in the pod. I am curious if you had $100 coming in to say you had a lucky enough to have decent cash balance before the liberation day you know um volatility and draw down. How you if you were to do it like if you have capital right now cash meaning Yeah. Yeah. What do you do? What you want to do when the prices go down like the the math would say prices go down 10% buy the things that you really really really strongly believe and just hold them for years. Prices go down another 10%. Just keep buying if you have the cash obviously and just just hold them and close your eyes and don't try to trade around these types of events. Just hold them for years. And that's that's what I did. So like if you have cash right now, pick three to five

things that you strongly believe in. And I mean I think I for me I'm buying these kinds of environments. When the fear I saw the fear and greed index hit three, which I've never seen it that low in the and it wasn't even that low in during March of 2020. So, there's probably going to be more extreme volatility, but to me, I think that's a characteristic of a Trump presidency, not characteristic of April 2025. I mean, this guy rips a tweet out and the market moves 10% and then it rips a tweet out and it moves the other way 10%. You best believe Vault is going to continue to persist in this administration. This is a four-year phenomenon, not a not a not a one week.

Go long V. Yeah. Don't use leverage for this reason because you will be liquidated, right? Uh uh and preserve cash. Yeah. And optionality. It never hurts to have cash. Yeah. Um I think uh that allows you to be operating in a position of strength always and peace of mind. Um, so I I think the the best thing that I've done in my trajectory in crypto has been have a stream of cash flow that comes in that is not tied to the industry. You want to solve for that. I don't pretend to give any advice, but as I think about me becoming a better investor has been knowing that I have something that is not correlated in

my portfolio that funds my lifestyle that funds that gives me the peace of mind to then maybe step up. Like I haven't drawn from that bucket at all. It's there. It's earning. These are your yield products. Yield products. I'm not going to go long the market. I'm happy to clip a 16% coupon cuz I'm playing the law of the rule of 72. What's the rule of 72? Divide 72. Divide the yield that you get on any product, whether it's you're investing in a fund that says I'm going to give you 10% return. So, say you do that. You can buy something that per year gives you 10% return. Divide 72 by 10. In 7.2 years, you will double that. That's the law of 72. Simple math. So when someone quotes

you an IRRa yield thing, your yield farming, your investing divide by that, that's how long it's take you to 5%. It's going to take you 14 and a half years to double your money. And I constantly think about that. If I can do that in size, if I'm there and in six 10 years time I double my money, that's a good outcome. Yeah. And and you don't always have to be super aggressive with everything that you do. I mean, I think the simple Shiao had a good tweet about this, but like, you know, you pays to listen to what other investors are doing. Warren Buffett telegraphed what he was doing for years. He was selling into the market. He has a $300 billion war chest. Like, I've been listening a lot to the Let me just play devil's advocate to that though, which is that

Buffett's been selling for years, right? I think he started taking chips off the table in 2022, right? Um, if you had not bought into the market in 2022, you missed Yes, 20 30 40% upside just in and I've said this time and time again in the podcast. I am not in the business of capturing 100% of what the market cycle will deliver. I think that is the shest way to get at some point lose your shirt. All the market wizards in the book like they all went out of business. Greed at some point gets into you. I think there's something to be said about I'm comfortable going in and saying whatever the cycle is going to be, I will capture maybe 50% of all the return. I'm happy to sell in when others

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So what so what would you do? Let's say you had a listener let's say you had a listener who maybe had $10,000 of cash right now and it's it's Friday. It's the real numbers Friday, April 11th. What do you suggest they do? And and importantly they don't have access to JP Morgan to do a no or can't get 10% yield very easily. What do you do? I would ask them what what what do you intend to get out of this product out of this pocket of money? Are you relying on that to pay for bills or can you not see this or touch this for the next 10 years? Like that's a simple question that any wealth manager is going to give you, any robo advisor is going to give you. Now, let's assume that it's discretionary. It's the same money that you can fund a vacation

or go to Vegas, right? Well, if that's the case, honestly, S&P all of it. Yeah. Not bonds. All of it. S&P. Go do whatever it is else you go find another 10K by working. Yeah. Why? Because again the one of the things that uh I'll I'll directionally quote but like the composition of the S&P over the last 20 30 years went from being entirely focused on industrial companies to tech companies. You don't have to know a single ounce of technology. But if you allocated in the S&P the rebalancing mechanism, you would have captured that. You would capture like a 12 13% return. Go back to the law of 72.

There you go. Seven years you double your money. Compound that. Then reinvest that all the dividends. And so again, it's really hard to outperform the benchmark unless you think that you have some prodigy type of insight. It's really hard to continuously outperform time the markets. And so I would put in this P. Yeah, I wouldn't necessarily go, you know, maybe clip secure. It's 10K, so like five, you know, 5% on some treasuries is meh. Just allocated. The market's down a lot. You know, I think there are some really, really big transformations that are going to happen. I think the S&P is going to capture the impact of AI and crypto and you might see some companies that from that use crypto and leverage cost gains for that. Maybe ones we will buy and

take public over the next 10 years will make part of the index and you're going to benefit from that. Yeah. Or you can follow me into the Robin Hood, Coinbase, Nvidia, S&P, Bitcoin retail. There's um uh in moments like these it pays to have, you know, a cool head. Yeah. Um, I just listened to a founders podcast. You know how much I like founders podcast. We should have You know, you know what? You know what episode I just Oh, wait. This wasn't founders. This was invest like the best. Michael Oitz episode in Michael. Well, there's a founders podcast on Michael. Phenomenal.

Great pot. Um, there's uh he has three or four maybe he has a ton in Warren Buffett and Charlie Mer. There's one we link in the show notes. Promise that we link in the show notes. So, the listener said, "Every time you say link in the show notes, it doesn't." Turns out for years, we've been saying link in the show notes. Never once. Thank you for whoever this Thank you for calling us out. Never once have we linked in the show notes. It turns out we I'm going to send this to our producer well Shadowwell. He does fantastic work. Um there's one of the collection of essays of Warren Buffett and David Cern from Founders. Uh it's like a two-hour long episode. M honestly a gold mine uh an MBA of just a education of a course and and there's a lot of good insights there

that um I I I like to listen time and time again. Yeah, it's good to listen to that. Yeah. Um let's talk about uh the well actually quick one on this and then I want to talk about the Ripple acquisition. Okay, can we talk about practical for the traders out there? Uh there's really smart minds that I talked to about like Arthur Hayes tweeted about this actually. move index is something that is interesting. Like a lot of the people that I talked to this week about like how to when to step into the market, when to go long. A lot of them follow this index, the move index. Maybe we'll, you know, we can show it, but it's like if it goes above 140. Shout out to X Kai uh Kai and yeah, they all seem to converge in this idea and I

don't pretend to know move index is short-term ball, right? Uh I think so shortterm ball. Yeah. Yeah. Anyways, this index has always been like if it hits above 140, it's like everyone and there someone is being carried away. There's like a blow up. Yeah. Body bags like like there's and it's only hit that level in like crazy like uh COVID that day. It hit now. It's still in that range. So, it just it's a for our trader friends out there, which I appreciate you guys. I'm not, but you know, this is something that smart people that I follow that are really good traders.

Quinn and uh Felix about that. Yeah, we'll talk more about that. Yeah. Um as a venture as an ex venture investor, I should say, and LP and a bunch of these funds. How much do you think this impacts the venture? I think as an exventure investor, you were an ex venture investor. What about it? Have I lost? Well, you know, like at Parafy, you were a professional venture investor. I'm an institutional angel. Yeah, I don't consider that as a venture in I guess. Yeah, I'm I'm in founder mode now, ladies and gentlemen. So, you know. Okay. Um but anyways, uh you should consider yourself a founder, not an I'm founder. I'm It's more fun. I do this. It's way more fun. Way more fun.

Um okay. What uh what will this if you're in the seat of some like imagine yourself paraphy during these days? Are you like full steam ahead allocating? Are you pausing fog of war, not sure what to do? Are you going back to founders and saying, "Look, uh maybe the leverage just flipped into my to my hands. It used to be in your hands as the founder. Now leverage flipped in my hands. I'm going to get a little bit better of a deal. Like what do you do in this phase? Depends on the structure of the fund and the tenor of my capital. So structure of the fund would be all of the big venture funds. Electric, Panta, you have a 10-year fund, you you you're liquid, you have the duration of that like you're not that capital's locked up, right? Let's just assume

venture funds. Yeah. Well, a couple things. Uh yeah, I I I'm bullish. Of course, I'm bullish. So, do you think that the venture allocations will slow? No. No. No. No, no, no, no, at all. There's a lot of capital out there. If you're building a good product, it is very opinionated now. The stable I've seen hundreds of pitches on stable in and around stable coins. No, absolutely not. This I mean, let's put aside this whole noise, which I I describe as noise. Yeah. Yeah. Uh I'm not a policy expert. I'm not a macro expert. It is noise in my mind. If you take it doesn't take more than taking more than a a year a 12 month horizon to be as as someone as my first hireer says I'm so bullish I can't see straight why

all the reasons and I just came out from a meeting one of the best investors full stop not just in crypto they've done the best investments in crypto the best investments like inventor outside of crypto they're based out here and we were both of the agreement all of the hurdles of this industry have gone away. The question now becomes who are we going to blame if we don't export this technology? Yeah, but there like why wouldn't you be bullish? Regulatory stuff clearing up. We're going to have stable coin regulation. Hopefully clarity comes soon that opens up God uh PayPal, Stripe, CL, all these FinTechs, you know. Um you have um what else? I mean all the major SEC stuff has been dropped. you have a very pro- crypto

administration. I mean, and mind you, we've been building infra that can now support these use cases. Why wouldn't you be bullish? Yeah. Like, I agree. If you've managed to survive and you're here and you have some capital and some capital, I I would be if I if I were a pairy, I would be calling up my LPs and be like, "This is time to like this is time to give me call the capital. Call the capital. Give me more capital." Yeah. Yeah. What's that conversation actually like? Well, it's tricky. Definitely tough because a lot of the LPs might be licking their wounds. Yeah. You know, they're like, "Oh man, like being battered down in my traditional portfolio. I don't my allocation alts

just got slashed. I can't get buy in from." And it's it's always again this is why I come at it from when I left Parapi I said I just think look there's a reason why folks like Drunka Miller and Soros and all these people have transitioned to a family office style or a holdco structure permanent capital like Berkshire Haway why because most funds are in a position where you have to allocate the capital in four years and you have to deploy that forcibly Warren Buffett on the other hand says, "I'm going to do whatever the hell. You're paying me to protect your capital first and foremost and then allocate that in the best risk adjusted way as I see fit. You either

believe that I can do that or you don't. And if you don't, sell the stock." And I think that again when you talk about the four-year cycle and the timing is very important in this game and unfortunately many funds find themselves in a position where the moments where you want to be investing are the moments where you can't find the capital. Yeah. And you don't have the capital. So it requires a different structure to express the view in a very volatile and emerging asset asset class. And I I I thought about raising a private equity fund. I said, "Okay, well, but why why would I want to play the IR game on a on an industry that I think over the next 10, 20 years is going to produce immense amount of value?" How many how many public companies do you think are going to be

purely cryptonative? 20, 30, 40, 50, right? I want to invest in all of them. I want to own all of them. Why would I have a fund structure that I need to forcibly sell after a certain amount of period? Either because my LPs want their money back because they're playing the IR game, the law of 72. Yep. Or because I just need to allocate forcibly. Yeah. We should and any question every time we bring on a manager here, whether it's liquid or venture, we should ask them, how comfortable are you, how comfortable are you holding cash? And sending an investor letter saying, I'm holding 50% of my cash. You know who's done that really well? Jason Fus. Fus. Yeah. It's crazy. I'll give him an immense amount

of respect. I he raised his fund when um Salana Breakpoint conference the peak of the Euphoria. Yeah. I think and he just raised like he raised I think 50 75 million. Yeah. And you could see his his like he was struggling a bit. He's like I don't I don't feel like I should allocate. I don't want to allocate. I'm not going to allocate. And I was like, "Hey, man. Well, you know, you get paid to do some of that money." He's like, "Yeah, but I'm going to protect principal." Three months later, market crashes gets allocated. Yeah. And you know, it it's we don't talk about that enough because it's really really hard to not do anything and that's equally valuable as doing something like we

always have that itch especially if you're managing outside capital. So the short of it is if you're electric, if you're Han, if you're A16Z, one, I don't I don't see the pace of deployment slowing down anytime soon. Not in the private side. We just had dinner with this guy, the really good company and you know Yeah. Yeah. You could tell smart people continue to come in the space. Yeah. Yeah. 100%. A lot of activity around certain ecosystems around certain use cases. Yeah. Um all right, last the other thing I want to cover outside of the markets and venture stuff is uh M&A. Yeah. So I mean it is just hot. It basically feels like you had this uh it's uh you know like a dam.

I'm picturing like a the Hoover Dam or something and there's just all this water getting backed up for years and then like dam just opens and the floodgates open. I think what you're seeing is you know the there's no M&A for several years just dead no M&A and now you're seeing several years of M&A compressed into a one-year time. Yeah. Why do you think that is? Uh just regulations opened up. Yeah, I just think it's regulations opened up and now the the industry is mature enough where people are saying I'm going for the jugular. I'm trying to take the crown right now. Part of my pitch is so um uh there's these foundations that have a lot of money. Yeah. Right. The theorem foundation consensus kind of tried to do this but it was too early and I asked them hey what did AOL

do in the peak of the do bubble bought? Yeah. Tom Time Warner. They swallowed Time Warner, biggest acquisition of the time, and they like used their currency, which was totally inflated. They knew that I straight face run any valuation methodology around that. They bought a real business. Yeah. Uh who what was the largest acquisition that just happened to date ever in crypto? Crypto. Well, there was the Ripple Ninja Trader one. Excuse me. Excuse me. Kraken Ninja Trader 1 was5, but Ripple just bought Hidden Road for 1.25. Yeah. So, the second largest, but let's unpack that.

Yeah. Yeah. Especially the Ripple one. Yeah. Ripple. This one's interesting. So, for people who don't know, uh Hidden Road is uh was started by in 2018 by this guy Mark Ash. He was an exec at um um what is who's the guy that um SACE Capital 72 exec from 72 set up the shop in uh in in uh like global shop, Netherlands, UK. I think they're actually struct headquartered in BVI. Shout out Nick Carter. Um they I think they backed them. They led the the first round in 2018. Basically, they are an institutional um prime brokerage firm, right? So basically, so they do clearing, financing, um they clear more than three trillion annually across markets.

Started not just crypto, not just crypto. So they actually started as an FX firm and then expanded into crypto. 300 institutional clients. Everyone from like uh Winter Mute to Vertu trades on them and they're a massive massive massive clearing house. Uh they don't do any prop trading in house very like they you know promote like conflict free very tech forward I actually met with one of the founders the other day a phenomenal phenomenal firm and yeah so they they clear like FX equities commodities digital assets crypto fixed income cross margining capabilities across all of those massive firm they just got bought by Ripple just bought them for 1.25 So, what's going inside of Brad's uh brain when he decided to buy that?

Genius. Genius. Ripple willed a uh not the most int like Okay, what is the polite way to put this? What I think was a very retail driven idea um which is using XRP as a clearance currency, right? Obviously, that's never going to work. You can't have like a volatile asset as a clearing currency. uh Ripple and Brad and David and that whole team willed this basically like silly idea which was using XRP as a clearance currency into reality by just I mean basically shilling this thing for years getting the token to go up using the capital and now building a massive war chest and they are turning Ripple into a

real business. They will will it into existence. This thing is a rare and I would say I'll give him I will give him the most amount of credit because this is what every foundation yeah should should be doing. There's another I I would say the other person who did this strategy is Sergey at chain link. Yes. Sergey turned a meme link which was a memecoin into a war chest of capital into a company that has hundreds of employees and does deals that are eight figure deals with L1's and L2s. you will it exist. There's a there's a there's always a fake it till you make it kind of thing in every and there's a fine line of how you walk that. Yeah.

Yeah. Hidden road is a legit extremely legitimate business. And um I mean this is the pitch for inversion quite literally. Build a war chest of capital and then acquire real businesses. And um I think this is genius. I think Brad I I don't care what people say about Ripple anymore or Brad Garlinghouse is a phenomenal operator. He not just in crypto. He might go down as one of the best pro like best evangelists. But just think about what we're saying here. A year ago, I would have been like ragging on Ripple and ragging. This tells me that they're serious. This is a uh they they they might go and and become bigger than Ethereum. Yeah. I mean, we did this episode that you were on with um Charlie Noise from Paradigm and uh BAM, who just

raised for Mesh. They just raised 82 million from Paradigm and Stablecoin Clearing House. And I said, "Uh, what what are you seeing that I'm not seeing?" and he said, "Don't sleep on RLUSD. Don't sleep on Ripple stable coin." Um, look, and we talked about that what other company gets mocked protocol, large protocol gets mocked and doesn't get enough credit by OG crypto uh you know uh uh uh purist other than Ripple. Other than Ripple, there's one very obvious one, Salana. Tron. Oh, yeah. Yeah. Yeah. Yeah. Yeah. And I will give Tron credit where it's due. They have been instrumental boots on the ground of evangelizing and and deploying so to speak USDT. Yeah. Like what

percentage of USDT happens on Tron? What is it? 607 roughly. I'm probably getting that wrong. 60 70. Yeah. Yeah. And everyone everyone in crypto laughed at Justin and oh Justin and whatever. Yeah. But but you know again that that just tells you the reason why USDT has been so dominant in the stable coin market. They preserve basically 75% of all stable coins in circulation. Yeah. And I think take a long-term view that's if there's other players in the market that are going to be degraded. It's not necessarily them because they've been so focused on deploying it. Let me tell you why this Ripple acquisition is so interesting. So they're clearing three trillion annually. What database are they using to clear that? I don't know.

Either like Solano or Ethereum or an L2 or traditional databases or MongoDB or whatever. They're going to move that all onto the XRP ledger and they're going to clear those trades in RLUSD. And if you think about why Tether and USDC, the real usage of stable coins right now is a clearing mechanism for trading houses. Um, now there's some like real world adoption stuff like that in emerging markets for with Tether, but it's really just clearing um and and settling and um yeah, I mean they're buying a platform that can then serve up their own stable coin. And look at Circle and Coinbase and Tether's revenues. This thing's going to pay for itself in a few years 100%. I mean, I I um as you know at Inversion, we are very

focused on Deepend. And I've thought a lot about the economics, the tokconomics, why deepen networks, they structurally have certain problems. But as I think about like the same exact same playbook which is you need to have an anchor partner that deploys a technology and like absorbs the supply and I'll give you an example. Say we buy a telco company. Um right now if you're helium you have all these different retail guys people that have bought a hotspot. What are they going to do? They want to sell H&T to recoup that investment. So there's constant supply that gets the that gets doesn't get absorbed in the market. You earn the reward, you sell

it. Bitcoin had the same problem early on. Yeah. You need to have someone that steps in and says, "I have idle energy capacity. I'm going to mine Bitcoin. I don't have to sell it cuz it's all free. Like it's all, you know, gravy. If I own the mobile carrier that is offloading data to the Helium network, I'm saving so much money on COGS that I don't the Helium awards are like an afterthought. And and when you think about you need these anchor stewards in the same way that Ripple bought this clearing house to justify the use case for XRP. Yeah, you need the anchor of the business. And I think like this is where the enter it's not a meme the enterprise adoption the enterprise use case of these asset ledgers or deepen networks. You need to have an anchor like that that realizes the cost

saving. You need to make the business use case otherwise it's all a speculation. Yeah. And we know how that ends. That that is a four-year cycle. that is like, you know, it's all tied to what Fred Wilson talks about is the the self-referential aspect of this industry, which is it's all tied to crypto prices. Yeah. Um, all right. I tweeted about the Ripple deal, and the best comment was from Bitcoin Cadet. How nice. For anyone who's not been in the space long enough, Yano has to tweet bullishness about shitcoin scamming shitcoin scamming coins because he doesn't want to work a 9 to5. So he engagement farms to be a net negative influence on all of society purely for his greed and laziness. He is a true leech of life. So there's the

counter to the uh I can't wait for the YouTube comments after this one after we praised uh so we we basically go on the record of praising Ripple a true uh the YouTube chain link and praising Tron. Where are they going to have all the the the link? You're going to want to see some nasty messages. Go look in my DMs by the way every time. Why do you have your DMs open? Um, one in 50 ends up being someone who we end up hiring. Yeah, true. So, so, uh, you know who also tweeted about this? Uh, uh, Duda said like our our best deals have been like cold DMs. We we hire I mean like Dan Smith, who's our head of data, like came from a cold DM. Like a lot of Blockworks' best hires have come from cold DMs. Yeah. Yeah. Yeah. I I still

don't think I'm gonna open my DMs. It's it's it's hell. Yeah, it's hell. Um, that's all I got. Anything else? Um, other deals. Um, yes, Magic Eden acquired Slingshot. Magic Eden acquired Slingshot. Yeah. Yeah. Yeah. That's good. Uh, we talked about Jupiter acquired uh Drip. Drip. I'm an investor. Shout out to Vishnu. Um, interesting acquisition though. NFTTS. Yeah. So I think the other thing you're seeing with all these deals mo by the way most of the deals that you're seeing today whether it's deals from like the C5 players or or these kind of deals you're either using a there's only two ways that people are financing these deals.

You still I'm still waiting to see cash deals. Yeah, you don't see cash deals right now. You're seeing a lot of token deals where we've got a bunch of tokens we're sitting on and we don't know how to use those things productively like you're saying with the foundations. So I don't know anything about the Magic Eden deal. I would guess a lot of that deals just in tokens and they're probably locked tokens. Same with Jupiter. Same thing. I'm I'm guessing discounted locked tokens. And then on the CFI side, I mean, you've got a bunch of companies that have overvalued equity from 2022 and you know, we've mentioned a lot of those companies before. If you're those companies, you want to use that equity to make acquisitions. So when you see a $50 million acquisition, hundred million, $200 million acquisition,

milestones, often times very very little cash. I heard I heard of one deal was a nine figure deal. There was zero cash involved. It was all just tokens very overvalued equity. Yeah. Yeah. So just just like when people see crypto companies and public companies, they use your currency as a stock to constantly be strategic and all right. I want to get your take on something. Uh Circle, we talked about it. What happens to Circle? They've delayed the IPO. Yeah, I want to talk just briefly on we've talked a lot about M&A, we've talked about markets, there are a a slew of companies that were perhaps IPO candidates before liberation day.

Yeah. Chain analysis, Fireblocks. I'm just saying these like these are I don't think either of them were IPO candidates, but point taken. Point taken. the IPO markets got excited and so traditional VC traditional VC and also like there's a lot of companies in crypto that have done growth rounds of like at multi-billion dollar valuations that could go public let's just say that yes what happens obviously circle delayed its IPO let's just talk about first about circle and then like are there going to be more I've been saying for this is actually where Mike and I disagree is he thinks there's I think I don't want to put words in his mouth there going to be a lot of crypto IPOs he's putting words in his mouth yeah I I don't think I I have been saying there's going to be a ton of crypto M&A this

year. There won't be as many crypto IPOs as the markets. I just don't think these companies are actually mature enough to to IPO. I don't think they're IPO ready companies. Someone like Circle, but you have a micro strategy that has that massive premium. Like you look at that say, hey, people clearly there's market trading on it being a real business, right? That's it's a meme. It's a memecoin. It's not trading on being a real business. Um someone like Circle will probably get out, but Circle's in a really tough place. I mean, so we actually just recorded an episode. you weren't able to make it. But with uh the founder of Zero Hash, they actually are one of the largest uh mters and burners of USDC in the world. Um several billion a week of of USDC and and other stable coins that they mint and burn. And uh we

just dug into like 45 minutes dug into the entire circle business model. Really good podcast that comes out not Monday but the Monday after. And um TLDDR is the issuer business of stable coins is a tough business. Yeah, it's a tough business. So you can think of the stable coins as a the stack as a sandwich, right? Where you've got the uh distribution, great place to be. The kind of chain where all the transactions flow, great place to be. The issuer of the stable coin, tough place to be. So I think if you're circle, you need to be thinking about do we how do we build a platform where the payments actually happen or how do we build the distribution? That's

for a point. Yeah. Do they get acquired? Do they go out of business? Do they I mean that over I saw a lot of tweets about you know Coinbase is going to acquire Circle. I don't think that happens because Coinbase is getting uh you know rough let's call it roughly you can kind of back into the math. So somewhere between 600 to 900 million in free cash with zero with zero operating expenses. So you've got Zero Opex pulling in almost a billion in revenue which is driving roughly a quarter of their valuation. So that's what 10 billion of valuation from Zero Opex. Why don't you just keep that thing running? Yeah.

Yeah. You don't need it. Yeah. Yeah. Yeah. So that's my quick take. That's right. Yeah. All right, folks. Thanks for listening. Any any books other than, of course, Legend Barbarians at the Gate. Any any series? White Lotus came out. H I I don't like that show. slow, too slow. Season three just it's it's man, you know what I'd say? It's manufactured anxiety. It's like, you know, the banging on the drums and the I'm like, why? It's the audio. You take the I got sucked into it, too, cuz I feel like all of society is listen is watching it. But I I'm like, this is a bad show. To be fair, White Lo is some really interesting cases where every season you have like a artist that breaks out and maybe it's this this guy like there's a couple of like an artist

who breaks out from the show. Like I don't know if Sydney Sweeney like broke out because she was in White Lotus season 2. I think she was like before like there was a lot of stuff. Well, she was in um it didn't make her HBO show too. Yeah, it was the HBO show. I think that made Euphoria. I think Euphoria made like Sen like Breakout, but it helped White Lotus like she wasn't as well known. And in this case, I think there's like one or two young like the short guy. I think he's like now all over now and like it's an interesting like plus it's like free market him for four seasons. Yeah. Yeah. True. Anyways, but anyway, I've been back listening to Invest Like the Best. I was years ago I started listening to that show and back on the train. So, I I I really like the

um both Michael Oitz episodes that they did. Yeah. We're good. So, Founders Founders Podcast, Warren Buffett notes. Yeah. Invest like the best. Michael two podcasts, ladies and gentlemen. Don't hit the buy or sell button if you don't need to. Shouldn't we be plugging uh Blockworks podcasts as Shoot Go listen to the one that we're going to record tomorrow. Yeah, go listen to the episode on Monday. Very good with Felix and uh and Forward Guidance. Yeah, exactly. Of course. Cool. All right, folks. Thanks for listening. Thanks, guys. [Music]