Timing Cycle Tops, AI Narrative Trade, and Bitcoin's Nation-State Adoption | Qiao Wang

Transcript

last cycle everyone in the industry was dreaming really big like crypto was going to disrupt everything every sector on the planet and this cycle the entire narrative has flipped AI from crypto and everyone has gone full nihilistic so everyone is like jaded and so that that like that's what everyone's talking about the top because everyone's jaded everyone's playing meem coins and [ __ ] do you think there are powerful Products that come out of this or is it all I mean because it feels like the products right now is just [ __ ] posting it's ship post and then and then buy my token ship post buy my token ship post buy my token are there Products that come out of this or is the product humor and entertainment scale is the blockchain that is Simply Built different other L1

networks have costly transaction fees clunky user experiences and lack true adoption in Ai and onchain gaming explore the gas-free ecosystem at scale. spacecosmos is scale with a K hit the link in the show notes to get started hey everyone Jason here wanted to talk about something that's been on my mind a lot recently if we should not be just recreating the trafi industry that's why I'm excited to share with you that today's sponsor magic Eden is getting into token trading and their vision is to become onchain binance and then much more as the entire world moves on chain stay up to date with magic Eden's

journey by giving them a follow on X at Magic Eden are you a project founder that wants your team to be paid in Stables or even just give your team token grants both of these things can become complete nightmares toku simplifies every part of global token compensation all in 100 countries on one platform reach out to their incredible team at tok.com or by hitting the link in the description of today's episode hey everyone Jason here there's a reason why Ledger is trusted to secure more than 20% of the world's crypto assets today check out their newest devices The Ledger stacks and The Ledger Flex featuring the world's first secure touch screens take your security seriously hit

the link in the show notes of today's episode to check out their latest devices trust me you won't regret it all right everyone welcome back to Empire we uh got rugged by Santiago he is I think maybe in fundraising meetings for inversion or I I don't know what he's doing these days but uh we have rck twice by him yeah it's classic went on this podcast twice and I was expecting him and both times he didn't show up this is me just trying to replace Santi with you chiao that's uh that's what's happening here I'm kidding I love you Santi but uh you should join us next time Chia joins but chiao how you doing man good good happy 100K day happy 100K day yeah how how we

feeling nothing I know isn't that funny it's um uh my my dad texted me last night he's like 100k like you know and uh it's uh I felt like a real I thought I thought the day that Bitcoin hit 100K I'd be like I don't know I'm not a bottle service kind of guy but if I ever was a bottle service kind of guy it's like uh you know going to a club or really nice dinner I I feel I feel like nothing I think because it's so expected at this point like it's so built into my mental model of where Bitcoin is going and has been for so many years at this point so I think the same will be true when Bitcoin hits a million or Bitcoin hits you know I think today if it passed gold

it would be around 850k today it's like oh my God if Bitcoin was at a million but by the time Bitcoin hits a million it's GNA be so baked into your mental model that it actually won't seem that crazy yeah exactly I I feel exactly the same what is um by the way I'm I I think most people know you but I I did see that who is it kaito has their list of uh the best [ __ ] posters and it's all yeah you're yeah yapper you're you're the only uh you're the only VC remaining so kudos to you thank you I feel good why do you spend so much time on Twitter uh honestly like when I tweet I I don't I don't think when I tweet I just uh

whatever comes to mind I'll tweet it out it's like a it's almost like a journal so like I'm I'm like I'm back-to-back meetings in the morning like from from 9 9:00 am to 1 pm and it's kind of stressful and between meetings I just come back to Twitter and ship post yeah so I was at this um New York Times dealbook Summit yesterday where yeah jome pal said that thing about Bitcoin and um but they I mean it's crazy lot it was like Bezos Sam Alman Jerome pal Prince Harry who is like a total snoozefest um Bill Clinton uh like crazy speaker line honestly the best speaker of all of them was this woman Alex Cooper who runs a podcast

called call her daddy and it's like I mean she she just got signed by SiriusXM for 125 million she's got I mean it was like the one podcast commo went on um you know like basically M she like The Joe Rogan for women basically massive Empire she had by far the best talk at this dealbook Summit and she said the same thing the uh Andrew rorin was interviewing her and was like how do you think about like I mean you're talk you're posting about like sex you're posting about like like mental health like like how do you think about what to post she's like once you start thinking about what to post you're you're losing the game she's like you just she's because I guess she learned from basically pori Portnoy was the Dave pornoy was the one who found her she's

like the main thing I learned from Dave poroy is you can push the limits way farther than people think on on social um I think you've done a good job with that just got to be authentic and just say whatever don't overthink yeah so um what is what is surprising you these days you said Bitcoin so Bitcoin I I would say hitting 100K did not surprise either of us what what is surprising you these days I'm surprised that salana is only still at 250 he should be like at this point should be at like 500 or more um and um did you see did you see Dan tapier extremely bullish salana take oh he is I

thought he was eth Maxi look at this I saw so R posted Soul literally couldn't be a more bullish long-term chart when it breaks higher it's GNA accelerate and Dan tapiero who is uh a great great macro Trader and investor he said crazily looks like two to three [Laughter] th000 h so tell me more about that sorry I interrup you tell me more about why that is your biggest surprise so far um I mean it's really just in relation to to eth like um for a lot of pretty objective metrics salana has already flipped eth I'm I'm

sure you you're you're aware of that and yet the the the market cap is still only onethird of eth um I like at this point I would expect that salana to be close to E but maybe eth has this uh the inflow from ETF like okay so okay the other thing that that surprised me a little bit is is actually the the eth ETF inflow because over the last week or so um the the inflow of eth as a percentage of the market cap is already higher than the inflow for BTC ETFs say wa say that say that s again so the I looked at the data this morning so over the last one or two weeks the

inflow of e ETFs is higher than the inflow of BTC ETFs adjusted by market cap interesting that I mean that it's not uh it's not that surprising but it's like because the the whole n all the entire narrative right now is uh you know the election that's going to be really good for Bitcoin because there there's a fairly high probability of Bitcoin Reserve and then you know everyone is buying Bitcoin but the eth ETF inflow is actually higher adjusted by market cap H that's interesting so what does that tell what does that tell you about

what tell me I I'd love to hear I mean I know your thoughts on Soul because you're you're excited about soul but tell me your thoughts on just eth in general right now um I mean eth was always going to combat like eth the the asset was always going to combat cup as a result of of um Bitcoin going up uh I think the two things that are that has been pushing eth up over the last a few weeks one is the E ETF um I I feel like uh the buyers are mainly like macro H like a traditional hedge funds that would be my guess I don't know I don't have any data points but that would be my gu your take on

that is because it if you're crypto native you're not buying eth right now if you're a crypt native you're not buying eth ETF and you probably not buying eth either because the eth is already pretty over owned by crypto natives so there's no net purchase of eth among the Crypt natives interesting yeah I mean anecdotally the new retail coming in you know I don't know how many text you've gotten or but uh I don't know how old you are I would assume the Younger You Are the more text you actually get from friends like the the closer you are to you know maybe like college or something the the

more text so if you're a 23y old who just graduated and all of your friends know that you're in crypto I bet you get a 100 texts you know if you're like 30 maybe you get 50 text if you're like I don't know 50 I don't have friends anymore like I got like five I wasn't trying to say you have no friends but uh you know I I do think there's a thing as you get older maybe your friend group shrinks um but actually anecdotally most of my friends who don't own crypto and are texting me now said is it uh basically it's Bitcoin soul xrp and meme coins those are the four they don't talk about eth they don't talk about any of the other 2017

coins there's no like you know hadera or algorand or Iota which by the way are all ripping right now um there's no there's definitely no like you know they've never even heard of arbitrum or optimism or apos or suie or any of those um there's no defi there's no they've never heard of Unis swap or arbit like U you know a or compound or anything like that um but they have heard of the meme coins they have basic you know a couple actually a few of my friends said I want I want exposure to meme coins is soul or xrp better so there's not even an understanding that like soul and xrp are not meme coins and then there's this meme coin it's they just want it's like bit Bitcoin or the meme coins and I

think people are L grouping soul and xrp as just like numberg go up tokens but what I realized a couple months ago was that salant and mind share is definitely stronger among young people like by Young I mean like early 20s mid 20s maybe then eth eth is more like 30s and bitcoin's like 40s like there there's definitely some sort of uh generational divide between the the top three assets yeah I mean one interesting experiment that um so I I don't have Tik Tok but um Mike told me to redownload actually I've never had Tik Tok but Mike told me to download Tik Tok and Mike Mike does Mike doesn't have it either but he said if you want to understand the markets right now he said get off

tick get off Twitter and get on Tik Tok and uh I'm sharing one of Mike's posts right now but all of these posts are like this if you go on Tik Tok and you search crypto it's xrp it's algor Rand it's hadera it's these Dino coins um but also there's like there's zero eth content there's probably 5% salana content uh probably 30% Bitcoin content and like 60% xrp content yeah so um what else is surprising you well I guess the fact that they're talking about Bitcoin Reserve it's kind of a I mean this was going to happen at some point but I didn't expect it this time

like the fact that uh you know the the most powerful nation in the world is seriously talking about starting a Bitcoin reserve and then the states are actually trying to front run it yeah yesterday I saw Florida talking about or something and then for sure oh Brazil was yeah Brazil was talking about it I think you saw Putin this week say that you know they like Bitcoin Putin Russia probably already has Bitcoin yeah like democracies and they need to pass a bill and [ __ ] but the are they probably already front Rend um the US yeah I mean I think the first group that will really start to adopt this is um is are the basically the bricks

Nations um the it was really interesting so most of the conferences I go to are obviously crypto conferences I'm sure like I'm sure like you um but this New York Times Like dealbook Summit was a really interesting I think uh look into the Zeitgeist of the general not the general public but like what the what like the Fortune 500 kind of executive is thinking about today and one of the big topics was um was like the bricks nations against the US and there was a lot of talk about uh you know tariffs and you know I think I think like tariffs were basically in every single conversation um but the bricks Nations got brought up a lot and it the kind of

sentiment in the room was like look these brics nations which is um who's bricks it's Brazil Russia India China south AFA what's the South Africa and then I think there's not I think there's Iran Egypt Ethiopia and the UAE I think there's like technically nine but yeah the you know obviously BR CS or the the five big ones um I think the sentiment is like they are going to go farther and farther and farther away from us and eventually entirely be entirely removed from the US dollar and I think the way that they do that is by moving on to the Bitcoin standard that would be I think they will be the

first ones to to adopt this the the bricks uh in terms of um GDP per capita adjusted by purchasing power not sorry GDP adjusted by a purchasing power is already bigger than the G7 that is a crazy stat really are you sure about that I saw that stat recently wow yeah here it is okay power as of 2024 bricks countries collectively account for approximately 35% of the world's GDP in terms of purchasing power parity compared to the g7's 30% interesting yeah look at this bricks

expanded their share of global merchandise exports from 10% to 23% um over the first two decades of the the 20 the 20 I don't know what we call this um the 2000s excuse me meanwhile the G7 share fell significantly from 45% to 29% that's that's that's an interesting stat what do you think there is a there is a game theoretical race to like for every country to adopt Bitcoin all right so let's talk about this so poly Market says 26% odds that Trump creates a national Bitcoin Reserve in his first 100 days you you long or short this I have no

idea I have no idea there there's a there's definitely a lot of op optimism for for Trump to sign some sort of executive order on day one I don't know what's the probability of that but people are talking about it so let me get your take on I think I saw you tweet and then delete the Tweet which was some something about the timing of the Cycles um and so I don't know if you want to share share your thoughts on that but I mean I I I tweeted this obviously obviously Bitcoin rips through 100K the day after I tweet this but I said gut says we're at a local top not a cycle top xrp nearing all-time highs nfts pumping Bitcoin up 2x in 60 days and r on

launching a token people saying hype hyper liquid is the next axi um I just bought xrp meme coins good to remember that 20 to 30% draw Downs are common in Bull markets give me your thoughts on like I guess just General market sentiment and Market timing right now and how you're thinking about things um do you do you do you think there is a consensus that around the top at the inauguration January 20th do do you see here okay so here here's the here's the consensus okay so the evolution of I think the consensus trade this cycle and the cycle top um over the last year was basically I think people are kind of following

Chris bernis into this mindset that like Cycles repeat and the top will be October 2024 if you ask like probably 10 crypto natives they would they would have said cycle tops October 2024 now it feels post trump it feels like the mentality is hey uh Trump is going to do the same thing that the Bitcoin ETFs did which pulls a lot of the growth forward in the cycle and actually uh cycle probably tops I mean I was with three big fund managers last night at the super at the superstate event and um you know all all three of them all three of them say hey look cycle probably

tops April May and then it's like sell and may go away and then and then summertime is slow maybe if you want to like buy one last dip you buy in the summer we get one last leg higher and then that and then that's the top and in the in the same way that like I mean 2021 it was like when did the first top in what March or April and then bar you know pull pullback big pullback and then the last like exhaustion was like The Meta excuse me metaverse hype that was when nfts really went crazy and then and then that was the real top so I think that's probably people's mentality right

now there's a count there there's a counter which is um so I think that's my mental model too actually as well is like probably the first top is in like April May and then the and then like we get one last leg higher and then and then the Cycle's over um the counter would just be there are so many crypto natives now that everybody is thinking this way and it feels like everyone's looking for a top right now you know you remember in the last cycle no one's talking about tops no one's talking like oh when's the top when's the top when's the top yeah so I don't know what do you think I mean so there there there is there's also a

sentiment change uh from last cycle to this one last cycle everyone in the industry was dreaming really big like crypto was going to disrupt everything every sector on the planet and this cycle the entire narrative has flipped AI from crypto and everyone has gone full nihilistic so everyone is like jaded and so that that like that's what everyone's talking about the top because everyone's jaded everyone's playing meem coins and [ __ ] but if I if I had to guess uh the three the the three big fun managers that you spoke with um they all agree with each other but in the end they're going to try to friend run each other so so the top will probably happen

before uh yeah April April May that would be my guess so maybe March so so here okay here's my base case um we're going to we're going to have a local top in late December early gen because from my perspective there is a consensus around January 20th as as a local top so the market is GNA front run bed um and then uh we we dump for a month or two and then the final pump in March Maybe because because everybody is thinking hey may is the top oh well I don't want

to be the sucker who waits till the top everyone else is gonna front run me let me try to front run them that pushes it into April March yeah even remember last cycle last cycle um we Ted in November 2021 uh but the fouryear cycle dictated that we would have topped in January February the year after and then the cycle top actually top two months before the foure um pattern okay here's here's here's a question for you what is the Catalyst though because the Catalyst in the last um if you go back to 2021 you had rates um you had rate changes you had the

equities Mark you had some things happening in the equities Market you had um uh let's see you had you had um you had Luna blow you had Luna blowing up you had the L you the lenders blowing up which causes FTX or which causes three arrows to blow up which causes more lenders to blow up which causes you know FTX to blow up like there was this like cascading effect which um I think you could liken it to in 2017 you know the the the Cascade that pulls prices down 80% not 30% was um was the was the uh icos who all raised an eath and then they they didn't have stable coins to convert into so they just sat on a bunch of eth and then as eth went down more

they had to sell more eth and it was just this like really negative Cascade um uh from the from the icos who had to sell off eth what is the cascading effect that happens here like what is the what is the ri what is the tri the needle that burst the bubble you know the needle doesn't have to be anything it could just be the the market uh going to euphoric and people are are taking money off the table it could just very well be that last cycle we actually had a real Catalyst uh I think the Catalyst last cycle was uh Jerome pow hiking the rates in in November 2021 that was the Catalyst and everything that happened afterwards all the

deleveraging the FTX blowing up these were symptoms not the cause of the um of the bare market so these were results of um the market crashing which was in turn a result of uh rate hikes but this cycle there doesn't need to be any real Catalyst concrete Catalyst it could just be that the market is overheated and then people need to take money off the table Yeah but taking money off the table doesn't doesn't drive prices down 80% taking money off the table drives prices down 20% or 30% well if we get a parabolic uh you know top then that can go down a lot like more I don't think

we'll see 80% down this time because we we do have a lot more um institutional adoption than last time so people might like we might like we may once again form a round top around the top and around the bottom and the peak to trough is might be way less than 80% maybe like 30 40 50% I have no idea yeah I don't I don't I don't see that happened it's never that's never happened before the round the top like the last time was the first top was actually round the top and the first bottom like if you look at last time um the the one in in May April May 2021 all right let's look at

this ah this one I see what you're saying yeah so the and and then the summer was around the bottom um 2021 2021 I was actually pretty surprised that we had a round in top and round in bottom um and I think that if that if that happened last time it's more likely to happen this time yeah you're saying price is just kind of sad oh I'm not sharing my screen you're saying prices just sat around here for like you know all of February March April and May yeah yeah okay but yeah I'm like I'm we're we're doing astrology here like I have

no idea what's going to happen have to wait and see what like the so first of all I I don't believe in foure Cycles anymore I think the most important things to to watch for is I think there's two two important things to watch for one is sentiment uh is the market going to become really euphoric yeah and that's super objective subjective and then the other thing is Central Bank liquidity economic cycle and I'm not an expert in that either I'm just going to watch like drug hillers and interviews and [ __ ] like that yeah yeah that's all you have to do all you all you got to do is just copy trade drug yeah um all right maybe take me let's talk uh let's talk non non- asrology um so there were two um I've seen I've

seen Imron obviously your your co-founder tweeting a lot about AI agents um you mentioned before the podcast you're like look I'm not not that deep into the AI agents I I would say you are uh deeper than most and nobody's actually that deep maybe if you're like running virtuals or something like that um but it does feel like that is the topic dour right now that is the narrative it feels like crypto's kind of in love with AI agents right now and the AI agent sentiment feels like it's at an all-time high not just in crypto by the way like even outside of crypto AI agents feel really hot so you've seen uh you've seen goat you've seen social media influencers like Luna you've seen Venture funds like AI 16z you've seen launchpads like virtuals you've seen Trading um what's

the name spectral uh I've seen Imron tweeting about slop father um I don't know if they're like a portco of or in the in yeah so I I don't know um I eth Global I saw some data from eth Global they had a big hackathon at Devcon 713 projects submitted uh and AI agents were the number one thing that people were building so give me your take on just like yeah AI agents in general I'm curious to get your thoughts I think 90% of it is is a is n is a narrative trade like that like price going up doesn't mean there's necessarily something real happening um I think there's probably a few teams that are very good that are

building AI agents so Imran for example talked to the the founder of AI 16z he said he's pretty good uh he also thinks that Jeff Jeffy is pretty good Jeffy is the guy behind uh zerro um but I don't have firsthand information and and regardless I think to build a really good product like this takes this is going to take a lot more time than just a few months so like real products might actually happen like two years from now right now for me it's mainly a narrative trade what do you think just generally I mean we T I think maybe two years ago we were talking about AI agents and that was your that was your or maybe a year

ago that was your take on like big crypto option would come from from these AI agents is this what like what you're seeing now this is like the first like flirting with starting to be your your thesis from you know a year or two ago no not at all two years ago I I didn't I didn't expect this to happen at all um now that I think about it um so here's one potential thesis so you know we've been experimenting with a social tokens for many years right like starting with um what's it called big cloud remember big cloud from back to day and then there's frch and then there's a couple other experiment like but but frch and big cloud were the most uh prominent experiments and they sort of both failed

um in hindsight I think one of the big reasons uh that social tokens failed is because uh real people like you and I we don't actually want a token associated associated with our name like we don't want an official social token like you don't want an official token called Yano that you Endor and then you make your like followers like lose money I don't want that either someone someone Someone created that actually on pump they put like my name in my face on a mcoin I was like don't don't buy this yeah right yeah and and then yesterday um the the HW Tua girl she rugged the entire Community like don't like most legit people don't want a token and I think that was the biggest

exp uh impediment to this experiment now AI agents don't care AI agents don't care if there's a an official social token associated with them right so like it might just so happens that the the entire the whole social token experiment actually takes off with AI creators rather than creators so that's my thesis today yeah that's interesting do you think that um do you think these become in the next like year or two I mean several years that imp literally impossible to predict that that is also uh astrology I would say but in the next

year or two do you think there are powerful Products that come out of this or is it all I mean because it feels like the products right now is just [ __ ] posting it's ship post and then and then buy my token ship post buy my token ship post buy my token are there Products that come out of this or is the product humor and entertainment it's so hard to say like right now the trend is is uh is entertainment but there might might be other sorts of products two years from now like slop slop father is is dating news and it's it's kind of funny news yeah I mean Mike's been sending me it too he's I think I mean it's it's gotten pretty impressive honestly it's so so if you think it's impressive today like in six to 12

months it's going to be even better so who okay so tell me about this team who who is this who's creating slota and like how do how do they do it it's it's a three kids that are not very well known um but they're super uh autistic and into Ai and they Shi this I actually think this product would would be better if um if it was like 25 to 50% less to generate um I actually think if it was like yeah 50% less I I would actually see this as like a potential blockworks competitor down the line okay yeah I'll I'll uh I'll pass along that your feedback I'd love I'd love to talk to these guys that's

interesting anything else in the AI agent world that you think is cool I saw one called dowo Genie okay uh that was um basically it's a do you remember Rune when he was talking about like the new vision for maker um he's like look there's all this bureaucracy and DOW governance uh what I think dowo Genie tries to do is it's like kind of cutting through the bureaucracy of Dow govern governance with with AI agents that have just learned everything uh no not this one maybe it's this one um where they've basically learned every single thing about the Dow and about the the delegates and about the governance members and about what people want and uh it reads the slack channels of the

teams and things like that and then it can it can actually help make decisions inside the Dow I thought that was kind of cool I I'm open to to any idea at this point like yeah thing is the surface is so large like AI is very programmable and and and crypto is very programmable and you mix those two together there's going to be something interesting so I'm open but for now like I don't I don't I'm not that deep in it and in order to get deep you have to be like you have to spend a lot of time with a specific project which I don't have the time for yeah right it's mainly a narrative trade yeah yeah that's true scale is the blockchain that is Simply Built different let's face it

other L1 networks have costly transaction fees that increase as the network gets busier scale has solved this problem with a gasf free scalable infrastructure where users never pay gas fees scale was awarded the most active gaming chain in 2023 by coin Gecko and host five of the top 25 games on dap radar you should definitely check out scale I was using it the other day it really is incredible to use that's scale spell with a K hit the link in the show notes or head on over to scale dospace ecoystem to get started today hey everyone Jason here I wanted to take a second to break down why magic Eden's getting into token trading their team is extremely concerned that crypto is still

Consolidated in the hands of a few centralized exchanges who act as Gatekeepers ultimately recreating the trafi space they believe that crypto is still missing an onchain binance and their aim is to move trading completely on chain fully decentralized they've done $6 billion in nft volume in the last 3 years and have had more than 1.4 million users visit their platform in the past year making them the number one nft platform in the market today they are the ones that can do it stay up to date with magic Eden's journey by giving them a follow on X at Magic Eden are you a project founder struggling to pay your team in Stables or even just giving them token grants

I've seen this issue firsthand throughout the space traditional payroll or E providers don't support crypto even if you wanted to do it yourself it's really complicated to figure out all the tax withholdings report to the IRS or any government and manage local filings toku simplifies every part of global token compensation everything from paying full-time employees in stable coins issuing token grants to your team and investors all in 100 countries on one platform you can plug toku into your existing payroll setup or even choose a fully managed service no guesswork no missed deadlines no complexity reach out to their incredible team at tok.com or by hitting the link in the description of today's

episode earlier in today's episode I mentioned Ledger's latest products the stacks and flex and I wanted to take a few seconds to tell you more about them these wallets feature the world's first secure touch screens which don't just simplify your digital transactions but also keep them extremely safe these wallets are virtually impenetrable to online attacks because they store your private key in a secure offline chip you can manage more than 5,500 tokens and install up to 100 apps choose the most trusted name in Hardware wallets and take control of your digital Security today at ledger.com or hit the link in the description of today's episode to check out their latest

wallets let's pivot a little bit let's talk airdrops so I I'd say the the aird drop of the year it feels like is the hyper liquid aird drop what are your thoughts because you guys have a lot of f were launching tokens in 2025 like what what kind of guidance are you giving people right now the guidance um or or general thoughts just on hyper liquid and token and yeah so when people say an nerop goes well what they really mean is the price goes up the price goes up yeah the real question is why did the the hyper liquid price token price go up and the other airdrops didn't uh I would was actually a little bit surprised that that hyper liquid token

went up that much within such a short Peri oh my God hyper liquid's at 13 bucks and and I'm surprised because uh the centralized exchanges have not listed uh the token it's only traded on hyper liquid itself right and perhaps that's the reason why the price went up because when when like this token like imagine this token was listed on binance you probably wouldn't start at a valuation of or fdv of like two billion you would have started at like maybe 20 or something and when you start at 20 there's only one way it's it's down but hyper liquid started at like two billion and it has it has a number of narratives behind it like it's

it's first of all a layer one so that already puts the T at like like 10 times 100 times more and then y actually has a lot of usage he has a great product like every perp trador tells me that it is the best per decentralized per product in the space so the combination of these things it's probably why the price went up yeah do you think there's a so people tell me I don't trade perss but people tell me I was at this dinner with a bunch of Traders on Tuesday night and they're all massive hype bag holders and stuff like that and they were saying they're like they're like it's just a 10 times better product and I was like well well why is that they're like one Jeff came from The High Frequency world but two um it's a

centralized product it's like a completely centralized product um and that's just the trade off they they made they said look we we can't build a 10 out of 10 you know 10x better product in a super decentralized way let's build a pretty centralized product and clearly people want that and they're okay with that so I think I actually think one of the bigger takeaways from hyper liquid is not anything to do with the airdrop it's about moving the app layer to more centralized products and think keeping the protocols uh decentralized which has always made more sense to me it's like I don't think you need an application to be decentralized um necess NE until you start moving oftentimes there's like you launch the app then you kind of launch

the protocol as well but like when people just start with an app like I think it can just be a centralized app I think we're moving towards that world right there is a regulatory risk though like how do you defend against the like there's no kyc right when you use hyper no kyc yeah so oh but speaking of like you mentioned that uh uh the team come comes from a high frequency trading background and I I was thinking um I don't know if this is true but um maybe they are the one of the key market makers for hyper the hyper token itself maybe that that could be a reason why the price doesn't go down because

the alternative like all the airdrops or token launches we've seen so far is is token gets listed on binance and then there's like like traditional market makers and I don't actually know how they price the token but the generally the combination of the exchange and the market maker they tend to put the price at a very high valuation right and so that is really problem problematic for for the token price so so maybe the hyper liquid team they have a their own internal Market maker and then then they purposely price the the token at a fairly low valuation you are just speculating on this right I'm totally speculating like obviously this would be

a little bit problematic from a regulatory point of view as well but I'm totally speculating I have no idea yeah so what do you think about the um I mean is your I think the general sentiment is that the regulation will change and that things will get more flexible are you seeing Founders get more excited about La just or maybe not excited but comfortable with launching tokens in the US oh yeah everyone is is preparing for a token launch now yeah yeah like q1 yeah yeah and everyone is coming back to the US or at least thinking about it yeah if you were advising someone said look I Chia I can I can build my company anywhere in the world you tell me where to go I'm gonna I'll go there where

would you recommend they build number one is New York number two is SF B area uh there's no number there's no third best I I agree to me there's not even a second best to me it's new New Yorker or bust like if if you're a Founder building a crypto company like unless actually unless it has something to do with AI then you maybe go to San Francisco anything else go put go put that company in New York there's no there's no second best like I hear crypto Founders building in like I don't know these random I don't know random cities I'm like you're just at such a disadvantage yeah yeah exactly the reason why I put SF in number two like SF a bay area has pros and cons the the pro is uh like the

entire culture of building like that's great like you have the peer pressure the that's great it's cool it's cool to build things on the weekends and right exactly the con is they uh I think they're kind of uh like the group thing is can can sometimes hurt because like last two years they've the the entire narrative in in in the Bay Area has flipped AI from crypto and so the crypto Founders in in SF in the last couple of years they felt like the pure pressure they felt like uh like what the hell am I doing in crypto when everyone when all my friends are building Ai and so a lot of them so if I looked at our are the the startups that we backed that gave up

on crypto sometime in the last couple of years they're universally based in in the Bay Area yeah and insight I realized what the problem was is is the group thing it's pure pressure yeah yeah I agree with that what is the most interesting uh app or product or company inside of this cohort of Alliance right now I can share the details yet but there's a couple of prediction markets that I'm really excited about uh they're they're very different from poly market and they try to solve problems like uh misinformation and and academic uh fraud so a market- driven approach to to solve fraud and

misinformation it's very early but I'm very excited about those ideas where what what chains are they building on um I don't know if they've decided yet I don't even mind if they build on Sal or base like as long as they're building on a chain that has that already has some are those the two options in your mind it's salana or base those would be the top two for like again like where you build is is Case by is Case by case but I think for most cases salana and base would be my top choices what are 3 four five um like if they say they build on blast or

arbitrum or optimism I I wouldn't mind or are you face say um uh you know s or uptas like it depends on on on on the product that you're building like if if your product is Crypton native then you probably want to be on a chain where that that has a already a lot of users but if you build a product that that abstracts away the onine blockchain then you can build on any highr chain yeah yeah what is the um is there anything that just from your seat running l number three is ton is

Tron because there's a lot of stable Co startups uh and they are building on Tron because Tron is where all the stable coins is happening interesting is number three interesting even if they're building in the US sure yeah yeah yeah what um what what is there anything from your seat in uh just like running Alliance that feels very obvious to you that doesn't feel as obvious to the rest of the industry yes uh there was one and that was related to the US election I thought it was really obvious to me that uh you know one of the two candidates is going to be very Pro crypto and I and I I

thought it was obvious to me that the election was going to determine the fate of us crypto and apparently it wasn't and I thought it was obvious to me because I had hard data showing that in the last couple of years the percentage of high quality crypto startups that are us-based went from 80% to 20% that was a crazy change within a span of only two years we went from 80% of the startups in in Alliance were in the US to 20% that's right

and the other thing that wasn't that thought I thought was clear to me that wasn't clear to anyone El that that that wasn't clear to most people in crypto and certainly not Mo anyone outside of crypto is when Mark andreon went on Joe Rogan and mentioned that the whole you know de banking thing I was like do people really not know this yeah that I mean that was that was fascinating to me too that was like whoa the general even like Elon tweeting about it I was like wait you didn't know this you didn't know this was happening yeah yeah but I think it's actually a good reminder that um thing crypto is about crypto Twitter is about as early to things as you can

possibly get because it does skew more uh conspiratorial is the wrong word actually here but it is uh very it basically questions anything that has to do with that comes from like an with with quotes around this word authoritative Source it questions anything it's got this like natural defensive Shield to it and so it's very early to Trends um and oh and it's and and people there are hyper online like about as online as you could get so it's those two combos make make you essentially as early as humanly possible to anything that will eventually be a big Trend online I would say um and I think you forget how long the lag time

can be being on crypto Twitter like the lag time here was uh it was about two and a half years I would say like it was I like I remember people tweeting I remember like even even uh who Brian quintens from Andre Horowitz posted like early 2022 saying hey a lot of our Founders are starting to get debanked that's like that's like that's not some random like anon on crypto Twitter that's like the head of policy at Andre and then it takes two and a half years for that to become like in the public sphere so yeah yeah it's really weird how information

flows that it took so long yeah I don't know in a in a way information flows like hyper quickly but it also takes it takes a really long time to permeate the the last like leg of information which is going to the mainstream source ources yeah like I would say de banking hasn't even reached the mainstream sources yet it's like there's like the hyper online crowd which is like seven it's like this and that information flows like almost in real time here but then there's like the last leg which is like getting to the general online public like Elon posting about de Banky and stuff like that and then there's

like the last line which is Getting Thinner and thinner and thinner in terms of like how thick the distribution is which is uh mainstream yeah and also this ties back to the earlier discussion around the cycle top like if you feel euphoric on crypto Twitter you're probably still a few months away yeah you're few months yeah that's well said yeah will you uh will you sell all of your crypto when you think the top is in no no will you sell 10% will you sell 90% will you sell your shitcoins but hold on to bitcoin like how do you think about that oh it definitely sell all the shitcoins but my shitcoin Holdings is is a small percentage of compared to to bitcoin

like I was actually thinking about this this morning like it was really stressful because like what if I feel really strongly about the top and you know it's it's just so hard to sell Bitcoin like I've held this [ __ ] for like so many years it's really hard to sell something that that you've held for so many years uh and on the other hand I I feel kind of Overexposed to bitcoin so it's a you feel Overexposed you feel Overexposed to bitcoin I feel very Overexposed to bitcoin what else would you buy um like if Bitcoin is really euphoric I would uh I probably hold some cash raise some cash ah

yeah but yeah so like I I actually think that Bitcoin is in a super cycle like famous last words but Bitcoin is in a super cycle crypto is not the the alss are going to um I I think think in I feel like in the medium to long term ALS will will underperform Bitcoin because right now we're really we're seriously talking about bigcoin National Reserve yeah that was the other big topic from this conversation last night um was I think the consensus is most folks are incredibly bullish on bitcoin and not bullish on really anything else I would say right now and there's this idea that this could be the first cycle that we are there's a strong Divergence between

Bitcoins outper performance and the rest of alts running yeah I mean we have to be specific with our time Horizon right like within the next uh two to three months if Bitcoin keeps going up then Al will outperform Bitcoin at this stage of the cycle but medium to longterm meaning time Horizon of one or two years to 5 10 years I could totally see Bitcoin dominance go way up yeah I mean to me it feels inevitable that we get a bit a strategic Bitcoin reserve and I think once you get that like Bitcoin just goes parabolic I would

say yeah I just don't know what that is yeah chat man good chat anything anything else you're thinking through oh I'm curious to get yeah do you have any takes on why hadera and Iota and you know Al I think the the answer is just that um the the norm they they come to they're coming back and they're using centralized exchanges to trade the coins and then our centralized exchanges there aren't that many like their their options are limited and just so happens that hyera and Iota is one of them one of them and then they also feel uh some sort of brand familiarity with those coins like these

coins uh pumped in the past why can it pump again so they buy the same the same coins yeah so it's really like a combination of brand familiarity and um the lack of options which turns out to be a good thing yeah yeah my take is you close your app and then you come back to it and there's a massive cohort of people who bought things in 2017 and they've just closed their apps and now they come back and they look at their phone and they say holy [ __ ] my my hadera is up a lot and they say let me buy some more hyera and let me tell my friends about hyera yeah yeah the OG coins simple as that um cool CH anything else we

missed um I think I think it's just important to to stay relaxed well it's it's hard to stay relaxed but try to stay uh um I don't know unemotional yeah during the next few months because it's gonna some get stressful yeah we have a actually funny we have our monthly All Hands we like a all every month at block works and that's that's like the topic of the month that Mike and I are talking about is like just keep keep calm fomo is we have the saying it block works it's be the line so in bare markets you want to be the line and like you're you're not actually as bad as your metrics might say because but in the bull markets you're not actually as good as the mar

as the metrics say so you just want to like just steady be the line and that relates to like how you think about your company and how good you are right now but also relate I mean like every everybody's I mean we have record month at block Works in November record quarter at block Works alltime high in Revenue alltime alltime High everything and like I'm sure all the companies are seeing that right now if you are but like it's not you want to you want to calm your ego a little bit but it also means calm your mental state like don't don't have fomo around every coin that's not going up yeah like you know it feels like I feel like in these markets all the coins you hold are not going up and all the coins your friends hold are going up a lot but just remember that's

not not the case spot on yeah so uh when's your next cohort uh February so February I'm swamped in interviews right now nice nice where are users coming from us or all over all over now and quite a few in from uh SF nice folks so they're coming back nice cool ciao pleasure man always always enjoy chatting hey everyone thanks for watching today's episode just wanted to quickly thank today's title sponsor scale scale really is one of the best chain experiences out there today and I've used so many different chains there's a reason they

are gaining so much adoption in both gaming and AI use cases hit the link in the show notes to explore the scale ecosystem [Music]