Trading the Merge | Arthur Hayes

✨ DEBRIEF ✨ | Find out why 1D = 1B: https://shows.banklesshq.com/p/debrief-arthur-hayes ----- This episode has been a long time coming. Arthur Hayes is the crypto trader of traders, and he's particularly bullish on the ETH trade. Today, he tells us why. We've been binging Arthur's writing lately, trying to get inside his head about how he approaches the markets. Discussing the inevitability of inflation, the chaotic macro picture, and of course the Ethereum Merge, we piece together the mindset of a trader who has survived the massacre of 2022. Do you agree with Arthur? Let us know in the comments or on Twitter @banklesshq ------ 📣 ConsenSys | Mint a Merge NFT! https://bankless.cc/themerge ------ 🚀 SUBSCRIBE TO NEWSLETTER: https://newsletter.banklesshq.com/ 🎙️ SUBSCRIBE TO PODCAST: http://podcast.banklesshq.com/ ------ BANKLESS SPONSOR TOOLS: 🚀 ROCKET POOL | ETH STAKING https://bankless.cc/RocketPool ⚖️ ARBITRUM | SCALING ETHEREUM https://bankless.cc/Arbitrum ❎ ACROSS | BRIDGE TO LAYER 2 https://bankless.cc/Across 🦁 BRAVE | THE BROWSER NATIVE WALLET https://bankless.cc/Brave 🌴 MAKER DAO | DECENTRALIZED LENDING https://bankless.cc/MakerDAO 🔐 LEDGER | SECURE STAKING https://bankless.cc/Ledger ------ Topics Covered: 0:00 Arthur Hayes 6:30 Arthur’s Prolific Writing 12:55 Why Arthur is a Trader 19:10 What’s Causing Inflation? 26:00 The Only Solution 30:11 Structural Inflation 38:09 The Macro Landscape 44:24 Why Crypto? 50:44 Denominate in Hydrocarbons 58:30 The Ethereum Merge 1:02:30 Is the Merge Priced In? 1:04:30 Crypto Markets 1:06:47 Target ETH Prices 1:08:20 What’s Different? 1:11:58 Making the ETH Trade 1:15:45 Merge vs Macro 1:18:26 DeFi and Arthur’s Conversion 1:22:15 The 2022 Retail Massacre 1:24:30 Surviving as a Trader 1:27:50 Arthur IRL ------ Resources: Arthur on Twitter: https://twitter.com/CryptoHayes?s=20&t=fz4N1B7Ifa3OY-tD6l6jhw https://twitter.com/CryptoHayes?s=20&t=fz4N1B7Ifa3OY-tD6l6jhw Arthur's Blog: https://cryptohayes.medium.com/ ETH-flexive: https://cryptohayes.medium.com/eth-flexive-7e1921123f64 A Samurai, a Knight, and a Yankee: https://entrepreneurshandbook.co/a-samurai-a-knight-and-a-yankee-211bf975a31d ----- Not financial or tax advice. This channel is strictly educational and is not investment advice or a solicitation to buy or sell any assets or to make any financial decisions. This video is not tax advice. Talk to your accountant. Do your own research.

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:07Ryan Sean Adams?

  Welcome to Bankless, where we explore the frontier of internet money and internet finance. This is how to get started, how to get better, how to front run the opportunity. This is Ryan Shaw Adams. I'm here with David Hoffman, and we're here to help you become more bankless. Guys, we have a special guest, a long sought after guest here with us today on Bankless, Arthur Hayes. He's a crypto trader of traders. Now he's particularly bullish on the ETH trade. He's going to tell us why. A few things to look out for during this episode. Number one, why is Arthur a trader anyway? How does he approach the market, the crypto market? We get inside his head, we ask these questions. Number two, why Arthur thinks fiat inflation is a near certainty? We talk energy, we talk debt, we talk demographics.

• 0:51Ryan Sean Adams?

  Finally, we get to the ETH trade. That's number three. Arthur says it's the most obvious trade he's ever seen in crypto, and he's been here a lot of years. Is the merge priced in? That's the question we ask him. We also ask, what's more powerful? The merge or macro markets? He answers that question too. Finally, we get to why Arthur is still alive in crypto? When so many other traders have gotten lost along the way, Arthur has survived. What are the secrets to surviving in crypto as a trader? David, really fun episode. Arthur's just great to talk to. He has incredible clarity of thought as well.

• 1:32Ryan Sean Adams?

  And I love the way traders think. To me, they always seem like professional athletes at some level, where a lot of this is obviously data and science, but some of this is just art and raw skill, the ability to navigate markets, kind of like a surfer catching waves.

• 1:46David Hoffman?

  Yeah, he's not a trader that looks at lines on a chart, right? I don't think I've ever seen Arthur Hayes draw a line on the chart. He is strictly looking at more macro, more zoomed out influences. He's looking at the words of the central bank. He's looking at the fundamentals behind the Ethereum merge. And he's cross referencing all of these data points, which as a non-trader, yet somebody who makes content about these same subjects, I can Actually like really understand.

• 2:11Ryan Sean Adams?

  Yeah.

• 2:11David Hoffman?

  Rather than be like, oh, that little like charty chart thing points this way. Like, no, that's not how Mr. Hayes thinks. No.

• 2:17Ryan Sean Adams?

  Well, it's funny. I know we just set him up as a trader, right? And he definitely is a trader, right? But like, also, I find much more in common with him. Maybe this is because he's trading on kind of a month to years long cycle than a lot of the TA traders, or even the narrative traders that I know in the space. Did you feel that too?

• 2:34David Hoffman?

  Yeah, no, I definitely felt that for sure.

• 2:36Ryan Sean Adams?

  It's like thesis driven trading.

• 2:37David Hoffman?

  Right, thesis driven trading, which is like something I can really get behind of all of all kind of trading out there. Arthur, of course, he was the CEO and co-founder of Bitmex, which was a derivatives exchange that was extremely popular back in the early days of my early days of crypto. And even before I got in 2017 to 2019, it had the vast majority, 90% of like all volume on like Bitcoin derivatives. There's a story there where Bitmex got into trouble for not doing KYC. That's not the story that we cover here on the podcast. We are strictly focused on Ether, the merge, macro markets, and just some other crypto stuff as well. So this is what we focus on here on the show.

• 3:16Ryan Sean Adams?

  Guys, if you want some of David and myself, our thoughts after this episode, I've got a lot of thoughts to talk about David with you.

• 3:22David Hoffman?

  Always do.

• 3:22Ryan Sean Adams?

  You gotta stick around for the debrief, premium subs. You can get that now. You can access that now. And of course, that is where Dave and I unpacked the episode that was. It's our raw, unfiltered thoughts for the Bankless Nation. There'll be a link where you can go premium in the show notes. All right, let's get right to our conversation with Arthur. But before we do, we want to tell you about the fantastic Bankless sponsors who made this episode possible.

• 3:47David Hoffman?

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• 4:30David Hoffman?

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• 5:14David Hoffman?

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• 6:22Ryan Sean Adams?

  Bankless Nation, we are super excited to introduce you to Arthur Hayes for the first time on Bankless. Arthur Hayes is a crypto OG. He's a trader through and through. Discovered Bitcoin in the early days 2013 or so, co-founded BitMEX in 2014, became crypto's dominant derivative exchange. More recently, both Dave and myself have been binging on Arthur's content because he's become one of our favorite writers. He's got a lot to say. Say about macro, a lot to say about crypto. And even more recently, the Ethereum merge, the ETH trade. That's what we're going to be talking about on Bankless today. Arthur, how you doing?

• 6:58Speaker 02

  Excellent. Thanks for having me.

• 6:59Ryan Sean Adams?

  Can I just like kick things off and ask you, so why are you writing so much? You seem to have a lot to say, and I'm wondering, because I know you're a trader, right? So there's got to be some sort of, you know, we could say it's altruism. Maybe there's a piece of it that's education altruism. But are there some other incentives at play here? Is this about kind of building a brand? Is this about you're just excited about a specific trade? You want to get the word out? I think somewhere you talked about how writing helped you clarify your thoughts, too. Why are you writing so much?

• 7:28Speaker 02

  So I think that that latter thing you said about clarifying my thoughts is probably the most important thing for me, right? Because I manage my own money. I really enjoy doing it. I think it's an intellectually stimulating exercise, especially when you get to have opposing views to other people. So you're discussing them. Obviously, it's me versus many from my blog, because it's not actually a two-way conversation. But obviously, people post comments on Twitter and other social media platforms to see here what people think about what I've written. But at the end of the day, if while you're trying to put together a cogent argument, that's going to be read by, you know, a few hundred thousand people across the world. You don't want to sound stupid. You want to make sure that your facts are correct. You want to make sure that your logic is correct.

• 8:12Speaker 02

  You want to make sure that you're evaluating all the different ways in which you could be wrong. Such that you have confidence in what you think should happen in the future if you're right. And I think if you approach it in that respect, your trading decisions will become a lot better. Because it's not just, okay, let me just go put this trade on and I'll find out, you know, in a minute, a half an hour, a year, a month, whatever your time frame is, if I'm right or wrong. I'm gonna put this trade on, I'm gonna write about it. And then the whole world can see me for what I've done and critique it. And I think that is in, it's scary in some respects, right? Because you don't want to have like missed some fundamental thing.

• 8:56Speaker 02

  Somebody points it out to you in the first five seconds of reading your piece. You're like, fuck, I didn't think of that. That like just completely invalidates everything I've been saying. I shouldn't have put that trade on. Let me go, you know, log back into my trading account and like reverse everything I just did. So that's exactly what you don't want to happen. And I think by spending the time to write and to open yourself up to criticism by anyone with an internet connection, you become a lot better thinker and I think a lot better investor.

• 9:23Ryan Sean Adams?

  By the way, have you ever written something where you did that? Where you got some feedback and you're like, oh, rewind, undo?

• 9:29Speaker 02

  Maybe it's more internal, right? So I had an idea about, you know, maybe it's a particular subset of coins that I was bullish about. And I had a position already and I was like, okay, I'm gonna write about this. This is why I like them. And I start writing and I'm like, hmm, it doesn't really sound so good. And then you start thinking about, that doesn't really fit with my overarching thesis. I think I got this wrong. And then I'll go back and I'll just trade out of the whole thing. I'll remove it from my essay and I'll be thankful that I actually went through that exercise because, no, maybe you could be right in a particular timeframe, but if you don't believe in your position, and at least for me, I'm not trading on a very short timeframe. So I tend to hold things for, you know, months, years because I can and I have that luxury of doing so.

• 10:15Speaker 02

  You have to be able to suffer, you know, like when I was this weekend, once the ether down like 30%, something like that. Something, you know, pretty substantial, right? You actually have to have conviction in your idea, a conviction in your future prognosis. And if you haven't spent hours writing, at least in my respect, then how can you look at the market and say, okay, my mark to market is down 30, 40%, whatever it is, doesn't really matter. But I not only believe in the trade, but maybe I'm going to consider adding more to the trade because I think this is a good buying opportunity. And so I think if you approach it in that respect, it's a very useful exercise as an investor.

• 10:52Ryan Sean Adams?

  Some people in the Twitter sphere have speculated that you actually have a ghostwriter, but I'm guessing a ghostwriter just because of the absolute just like torrent of content coming out of your Medium blog. But I'm guessing if you had a ghostwriter, that would invalidate almost everything that you just said, huh? So there's no ghostwriter behind the scenes?

• 11:07Speaker 02

  There's no ghostwriter. I have a research analyst who really helps me fact check certain things. He'll go and do a deep dive on a particular subject. If we were writing an article about something, he'll go get me a bunch of facts that I want. Instead of me going to the internet and doing that myself, he'll make some graphs for me. And so he saves me a lot of time in that respect. And if I want to talk about certain facts and figures, he'll be able to go and get them from me. So I do have a research analyst. He's extremely valuable and saves me a lot of time and helps me write more.

• 11:36Ryan Sean Adams?

  The reason I've never subscribed to Arthur as a ghostwriter thesis is because I feel like you have a particular voice that's really hard to mimic. Like, it's pretty unique and pretty, like, honestly entertaining. I don't feel like I'm working when I'm reading one of your pieces, which is kind of fun. I'm learning, but I'm not working. But you mentioned before that you're a trader, and that's what I said in kind of your bio. Like, I think of Arthur Hayes, like, part of your legacy is a trader through and through. But you also mentioned that, like, your holding period is, you know, months, sometimes years as well. Can I just ask the question of, like, why are you a trader? Why not just buy and hold? I mean, you were here from the early days, right? A lot of people have had a lot of success, obviously, in crypto. And, you know, some would argue that some of the most successful people in crypto, from a returns perspective, have just bought and hold. Why do you trade instead?

• 12:21Speaker 02

  So that's just my mentality. I think buy and hold works for a certain mentality, especially crypto. I'd have to say you probably have to be a little insane. And that's not a dig at certain people. If you look at some of the longest term holders of Bitcoin, they've held it when it went from, you know, a few cents to... Imagine you bought Bitcoin and it was worth a penny. And it was worth a dollar. You're up 100x. You're like, "Fuck, I killed this trade." And then, you know, ten years later, it's worth sixty thousand dollars, right? How much conviction does it take for somebody to hold an asset? I don't care what it is. You have a hundred times, yeah, you believe it's going to go higher. That's not me. I don't have that mindset. I approached crypto when I first, you know, discovered Bitcoin. I was like, wow.

• 13:07Speaker 02

  I'm an arbitrage guy. I sit at work where I used to all day long and I try to make a few basis points, selling futures contracts and buying stocks. And I did that for five years. And I'd be, you know, it'd be a knockout trade if I made even a percent on a trade. And yet I come into crypto, I log on to something that's changed and I was like, whoa, my P and L is two hundred percent annualized for trading by just doing the simplest trade, selling your futures and buying cash. And that's what I started doing. You know, I obviously, over time, I came to believe more in Bitcoin and the whole ecosystem. But when I approached this, okay, this is, I understand this trade. I understand derivatives. This is this new, you know, ecosystem. But fuck me, this is an amazing trade. And I take the risk of believing in Bitcoin or not out of it.

• 13:52Speaker 02

  And so that's probably where I come at it from. And obviously now, you know, I have, you know, much more capital to play with. I can become a long-term investor and it doesn't really matter to me. The price goes down fifty percent or whatnot because I've segmented that particular part of my portfolio. I know what it should be doing. I'm perfectly happy with the volatility and I don't want to sit at the computer screen all day doing trades. I'd rather write, read a book, do other things. So, you know, to be a, you know, trader on a short timeframe is extremely difficult. Takes a lot of dedication and it takes a lot of time.

• 14:23David Hoffman?

  Arthur, as a trader, what did you see in crypto that struck the light bulb? As in like, oh, I want to trade here now. What about the crypto industry or crypto thesis, investment thesis or be it whatnot, attracted you so much?

• 14:36Speaker 02

  The fact that, you know, it takes an internet connection, you log on, you start trading. So you have a whole, this whole spectrum of humanity. And because it's, you know, money, right? Money is completely fictitious. It's a mental construct of socialized humans. There is no intrinsic value. So it's very religious. So you either have people who hate it, or people who love it. And those are the best kinds of markets because you're in extreme volatility as you move from the greed and the fear emotions, and you don't have anything intrinsically to base it off. It's not like you're buying and selling property, or like something you can hold in your hand. There's nothing. It's literally somebody, or some organization posted a paper on the internet

• 15:17Speaker 02

  and said, here is a piece of software. Let's mine this made up currency and look at where we are now, you know, trillion, three trillion, whatever you want to call the total market cap. And you have everybody who thinks this is a complete scam to, you know, this is the way that we should be organizing human affairs, using code as law and whatnot, right? So these two spectrums. That's we want to trade. You want intense volatility, intense beliefs, because you're going to catch people on both sides who are wrong. People who believe too much in the upside, believe too much in the downside. And as a trader, you want a highly volatile asset to trade, because I think that's extremely interesting, at least for me.

• 15:54David Hoffman?

  I think it's interesting that your answer begins with, well, crypto is super religious. But I don't really see you as having picked a crypto tribe, right? Like, you're not a Bitcoiner, you're not really a theorian, you're a trader. Have you ever been compelled by a particular tribe in crypto? Or like, how have you navigated these waters?

• 16:11Speaker 02

  I think everything in life is nuanced. It's like thinking that in markets, right? Nothing goes up or down in a straight line. It's a wave. And so, while there might be a camp that's particularly right in the long term, you know, I think Bitcoin is obviously the shining light, benchmark asset, the purest form of money in our ecosystem, probably the one of the best designed currencies in our ecosystem. But it'll go through ups and downs. Some of the coins will outperform it at some other times. Bitcoin will outperform it other times. And so if you're in this, you know, okay, just buy an whole Bitcoin and that that could be your life. And that's completely fine. And that, you know, to me, that's not that interesting. I'd like to try to, you

• 16:52Speaker 02

  know, trade around, see what else is interesting out there. You know, Ethereum obviously has captured my interest and there's a lot of other new things that people can develop using Bitcoin, Ethereum, and some of the other early projects as a substrate to just bring our creativity to it and see what they can create.

• 17:09Ryan Sean Adams?

  Yeah, what's really interesting, I think, Arthur, is, well, you may not have a kind of like a specific tribe, like Bitcoin maximalist or something, or either maximalist or something like this. I do think you have a very pro crypto thesis. Like, your thesis is that crypto is going to appreciate relative to almost every other asset, and certainly relative to like fiat-based assets. Maybe that's where we want to kind of pick up the story if we're sort of unpacking Arthur's brain here. You wrote an article recently I really enjoyed called "A Samurai, a Knight, and a Yankee." And the Samurai, of course, is Japan. And so the Central Bank of Japan, we've got the Knight, which is the EU, and the US, which is kind of the Fed, Jerome Powell and company. And they all, beginning of this article, they

• 17:52Ryan Sean Adams?

  all meet at an inn. And they discuss what they're going to do, what each of their kingdoms are going to do about this great bear, which is, I think the analogy is Russia, that's kind of attacking the kingdom and wreaking havoc. And the scourge of the bear, which is inflation. How are the Samurai and the Knight and the Yankee going to quell inflation for their respective kingdoms? What tools do they have to bear? And so the article begins with this discussion. Can we talk about that for a minute?

• 18:20Speaker 02

  Sure.

• 18:20Ryan Sean Adams?

  Because I feel like if we're going to dive into macro, we got to hit the subject of inflation. From your perspective, what is the cause of inflation right now?

• 18:29Speaker 02

  I think there's two causes. There's one cause of, okay, you know, maybe we'll back up a bit, right? So World War II ended.

• 18:39Speaker 02

  United States didn't really have any, apart from Pearl Harbor, the contiguous in the United States was not damaged. Europe, destroyed. Russia, destroyed. China, destroyed. Japan, destroyed. So you think about the major industrial powers pre-World War II, most of them were in shambles. And then in rides, the US to the rescue and says, hey, Europe, here's this Marshall Plan. Here's a bunch of money, I'm gonna loan you some money, rebuild yourself. Didn't really do so much for Russia and China. Japan was essentially, you know, a pseudo-American colony for a few years. They exited that and they were on their way to industrializing as well. And America said, hey, guys, build yourselves back up and guess what?

• 19:22Speaker 02

  We'll open our markets and you can sell your excess stuff to us and we'll buy it. And that worked really, really well for, you know, thirty, forty years. And as a consequence of being their global reserve currency, you know, America had to open up its capital markets. And, you know, post the seventies, when America went off the gold standard, had to become more financialized. And I think you have two big trends that sort of made the, you wanna call it labor or the right of the workers or their percentage of income that they earned secretly in decline. And that was women in the workforce and China. So you have all these new people who want a job, who can have a job and obviously the wages go down. And so corporate profits go up, great for corporations.

• 20:07Speaker 02

  And so, you know, and then you have technology, the internet, computing. And so stuff just gets cheaper for most people. Energy, we get better at extracting oil and natural gas, other hydrocomers out of the ground. That gets cheaper as well. We get more efficient in our economies. And so that lasts from, you know, nineteen eighties until probably, you know, early two thousands, two thousand teens. And then we get to the COVID era where, you know, we think that, okay, we've conquered this energy thing. We're gonna become green and we're done with fossil fuels and we're gonna go wind and solar and whatnot.

• 20:44Speaker 02

  And then we have a pandemic, which we do about once every hundred years, right? Spanish flu, now we have this one debatable, you know, severity or whatnot. And obviously, a lot of people died, which is very sad. And what did they respond with? We're going to print a bunch of money and hand it out to people. Now, US did the biggest, you know, M two in the US was a forty percent from like nineteen, from two thousand nineteen until current. And everybody else did, you know, something similar. And so we have this monetary aspect. And so we're said, hey, people, here's a bunch of cash. We're going to hand it to you. Go buy stuff. And so people bought stuff. They bought a lot of stuff, especially in America, you know, stimmys, right? Maybe they went to the Robin Hood account and they bought GameStop or they went down to their auto dealership and they bought a new, you know, pickup truck or whatever.

• 21:30Speaker 02

  So we have inflation because people have a lot of money. And then, for whatever reason, you know, West, US and EU slash NATO and and Russia have a little, you know, falling out over this whole Ukraine issue. It's irrelevant whose fault it is or right or wrong, it doesn't really matter. And the response was, hey, we're going to kick the biggest energy exporter in the world. And that's what Russia is, whether that, and that's, you know, crude, natural gas, fertilizers and some foodstuffs. We're saying, you know what? Fuck you, we're going to take your money, we'll freeze it. We don't want to trade with you anymore. Okay, cool. And so now you have real inflation of energy and food.

• 22:11Speaker 02

  Because when you move, remove the biggest exporter out of the global equation, make things more expensive. So not only do we give people a bunch of money to buy stuff, we also have, we, let's take, not we, a particular block of countries said, we're not going to trade with the biggest energy exporter. And so you have that, those costs going up. And so I think you have two forces in place. There is the monetary aspect of printing too much money. And then there is, we're going to upend global supply chain. So it's just more expensive to get energy from where it's produced to where it's consumed.

• 22:49Speaker 02

  And unlike Bitcoin, when you build a gas pipeline or you drill oil wells, you have a destination in mind of where it's going to go. And so to reroute oil and natural gas from Europe to buyers in Asia, India and China, it's not the easiest thing to do. And I think Zoltan Poznar, however you pronounce his last name, Credit Suisse has written very extensively about it's not that easy to reroute these commodity flows. And that is structural inflation. And there's nothing, you can raise interest rates to 30% if you want to as a Fed, that's not going to build an oil pipeline. That's going to get the oil from where it's produced to where it's consumed. And that's the problem. So I think we have two pillars of this inflationary problem.

• 23:32Speaker 02

  Now, yes, you can solve the monetary one by raising interest rates, cutting off the quantity of money. But unless the West wants to reengage with Russia and say, you know what? Sorry, we'll buy your stuff again. Then that other structural part of inflation is still there. And it's not as if we have another China or another half of the population that we're going to add to the workforce to make things cheaper to produce.

• 23:57Ryan Sean Adams?

  And so you said this later in your article, the kind of the conundrum or the predicament for the Samurai, the Knight and the Yankee is like, is this? They have a whole bunch of debt that they eventually have to inflate away. You said this, "I will argue that the only solution left for any governments of countries that are not productive, which includes these countries, is to pay back their debt loads by inflating them away." And so that you think is the eventual outcome for all of these countries? And maybe that's what inflation actually is. It's the process of these governments inflating away all of their debt. Can you talk about kind of that end game scenario for the central bankers? And why you think that is the only solution left?

• 24:39Speaker 02

  Well, it's not the only solution. There is another solution. It's just one, so my opinion and my view is that the role of the central bank is to protect debt-backed asset deflation. And if you're a bank, that is game over. Because what you do as a bank and it's procyclical is, housing is the easiest example. Banks lend against houses. Because a house is so expensive, the majority of people can't afford a house without financing. Therefore, the value of the house is entirely dependent on how much financing is available. And that's great if the prices are going up. Because the bank lends money against the house. You can get financing, therefore the asset grows up, the bank's loan looks healthy, you make your payments. Everything's happy, everything's great.

• 25:23Speaker 02

  But what happens when the asset price goes down? Well, the bank says, oh no, I don't want to lend against this asset anymore. And so by restricting lending, you actually cause it to go down even further. And it's procyclical on the downside as well. And this negative feedback loop, and you know, anyone who owned U S T and Terra understands these a little bit better now. Is something that the central bank is there to protect. And in the nineteen, you know, thirties and the Great Depression. The lushen let a lot of these bankers learned was that the Federal Reserve and other global central banks. They took the austerity path, they didn't step up and give the fiat money to protect the banking system from cleansing all these loans.

• 26:04Speaker 02

  And that is the cause of the depression, and we never want to do that again and let the banking system essentially fail. So every time there's a little hiccup. Where the banks overextended themselves, we're going to say, you know what, don't worry, we'll back you up. Here's some more fiat credit cash, we can print it. Don't let the loans go down, don't extinguish the credit and get back to a healthier standpoint. So we've been doing this since the end of the Great Depression. And so we've gotten to this, to this point in human civilization and the arc of human civilization where we don't, unless someone's going to discover a new form of energy that's going to be extremely productive. It's not like we have another hundred X improvement in the use of energy in our economy. So then how are we going to pay back all this debt?

• 26:47Speaker 02

  And it's not as if the most productive developed economies, their population are growing, they're actually falling. Because as people get richer, they have less, they have fewer kids. So there isn't this population in the future to pay back all this debt. So yes, they could shrink the economy to the level of which. The future projection and energy uses demands that be pretty painful and you know, their constituents, the banks would all go bankrupt. Or they can inflate it away and the global population or citizens can pay for it. So you have two options. And so my view is that because central banks are there to protect the banks' asset books from falling, they won't choose the option of deflating the world economy to a more sustainable level, which would be extremely painful.

• 27:31Speaker 02

  They will inflate it away, which is what most governments do when they face this conundrum. And this is not a new problem. Every major civilization faces the same issues. You run out of cheap plentiful energy, whether that's slaves, oil, or wood, or coal, or whatever it is, and you resort to inflation.

• 27:50David Hoffman?

  This phrase structural inflation is the first time I've heard that. And like my understanding, just to check it, is that we used to have this global economy that was all plugged into each other. And then we had this like war in Europe that decoupled the fiat currencies of the West of Europe and the United States from the energy supplies of Russia. And I think America is kind of hooked into Europe because there are political allies. And so their desires are our desires to a decent extent. But then when Europe gets unplugged from Russia because they stopped buying Russia's energy, because Russia invaded Ukraine, something that pissed off politically Europe, all of a sudden we like decouple the energy backing to our fiat dollars.

• 28:32David Hoffman?

  And now like there's this systemic like demand for energy that can't be supplied by the market because that market is broken. And that creates structural inflation, which is aligned with all of the banking system with what you just said, which is that we can't allow for too much deflation because then it'll cripple the whole thing. So your natural conclusion is like, well, we have this separation of fiat currency and energy in Russia versus Europe, plus this systemically financialized economy that can't go down or else it goes to zero too quickly. And so therefore your conclusion is that like everything inflates. Was that a fair summary?

• 29:08Speaker 02

  Yeah, I'd give it a bit more nuanced. And US is in a better position than Europe because the US is a net energy exporter, I think.

• 29:17David Hoffman?

  Right.

• 29:18Speaker 02

  Yeah. Someone can check me on that. Has a lot of land.

• 29:24Speaker 02

  Feed itself. Europe, maybe it can feed itself, cannot function at the industrial level. And let's forget about everything Europe except for Germany and France, that they don't want to matter. They cannot function without cheap energy. Germany especially cannot function without Russian gas. And we're seeing that play out in real time. Was it German producer prices were up, I don't know, forty percent year on year in the last print? Or something ridiculous. Trade balance is negative. Some of the biggest industrial giants in the world are contemplating shutting down these facilities. And these are not, and I am not a chemist or, you know, I've never built anything at this scale, but from my understanding of these very complex systems,

• 30:06Speaker 02

  it's not as if you flip the off switch, you know, three months later, everyone goes, okay, sorry, Russia, and we'll take your oil again, and we'll take your gas. And you flip the switch back on, and the next day it turns back on. It's not one of those things. So if it goes off, it's going off for a while. And so that is, I think, the problem of Europe. Now, US is, I think US will have structural inflation. Will it be, you know, crippling? Probably not, because, you know, geopolitically, it actually has enough stuff to, you know, feed itself and has enough energy. Europe is in a different situation. The question that I posed in that article was, okay, what's America's resolve to help all their ally?

• 30:46Speaker 02

  Are they willing to print money to hand it to Europe so that Europe can hand it to its citizens to smooth over the cost of energy? That's the question. Similar with Japan. Japan's a net energy importer. They're only starting to now think about restarting the nuclear reactors. And so if Japan is going to be the US's staunch ally, which essentially is facing China, they contain China from a naval perspective, can US let Japan go its own way? Or are they going to come and support Japan? Because I think Kuroda-san in his recent, I think he was at Jackson Hole. He said, I'm going to continue the policy of Yolkur control and cheap interest rates way below the rest of my peers at other central banks,

• 31:30Speaker 02

  because I believe inflation in Japan is transitory. That's what he said in so many words. He's going to continue running this play where the yen is going to get weaker and weaker and weaker. Energy costs are going to go up and up and up unless politically Japan is allowed to buy Russian energy. I don't know. So the US has a decision to make. How much they want to support their allies?

• 31:53David Hoffman?

  And this decision has to come by this winter. I was seeing a chart like just last week for like a German megawatt hour and like the price chart for that. It's up like three X in the last like six months or something. And so like there's already very expensive energy in Europe. Some of my European friends were talking about like, yo, even in the summer, energy prices and energy contracts are already like super elevated. And so it seems to be like, we're not going to be able to get past the winter here because this is when Europe gets really, really cold. And that's when energy goes from a nice to have to like, I need this to survive. And so like, are you kind of focused on like this winter as like a big, this moment when a lot of these decisions must be made?

• 32:34Speaker 02

  Well, have to be made. It's just the outlet will be anger from the populace. And so if US is going to come to the rescue and save the political construction of Europe, where you have, you know, Brussels making all these decisions based on their ideology, which is at odds with the average person who is going to have a lot harder time feeding and heating themselves this winter. You know, either they'll express that in elections, Italian elections are September 25th, we'll see how those goes, or they're going to express those in a more probably, you know, peaceful protest, violent protest, what have you. And so when it's hard to eat and when it's hard to heat your home, you go out in the streets and we'll see what happens.

• 33:17David Hoffman?

  So Europe, Japan, increasing inflation. Of course, there's inflation in the US too, but you introduced kind of this prospect of the US helping, right? The Yankee riding and kind of saving the day. What form would that take? Is that sort of like the Fed purchasing Japanese and Euro bonds? Is that what that looks like? And yeah.

• 33:36Speaker 02

  That could be, that could be one way. You know, the Treasury is authorized to do this. They've done it in the past. They can go out and they can purchase the bonds of ECB, well, that Euro members issue and the BOJ issues. And Japan, not the BOJ, the Ministry of Finance in Japan. Or the Fed can stop raising rates. It can go back to easy money. The dollar is, I don't know, twenty percent, fifteen percent, something meaningful over the last, you know, twelve to eighteen months. That's very bad for Europe and Japan because energy is priced in dollars. Therefore, their import bills go sky high.

• 34:12Ryan Sean Adams?

  Ah.

• 34:13Speaker 02

  So by, you know, Powell continuing to bang on a thing, I'm going to be Paul Volcker, I'm going to raise rates and break inflation. Well, your colleagues across the pond, whether it's the Atlantic or the Pacific, they don't have those options. If ECB stops buying the bonds of Italy, Spain, Greece, Portugal, then those countries won't be on the euro. But on the other hand, they need to raise interest rates to combat inflation. They can't do both. They're kind of fucked either way, unless somebody with the global printing press can come and save them. But that's a political decision. I don't know which way it'll go. But, you know, if these are the allies of the US and essentially do what

• 34:58Speaker 02

  they're told by the US political establishment, then the reciprocal action would be, well, you've got to help us survive politically because politically, the euro project will not be able to survive if the ECB goes it alone without the help from America, in my opinion.

• 35:15Ryan Sean Adams?

  So, okay, so the setup that you've just described is this. So the US doesn't want Europe or Japan buying energy from Russia, right? They don't want that for geopolitical reasons, war in Ukraine, et cetera, right? So we've got that. And yet, if they stop buying, which they have, energy from Russia, then they're faced with this rampant inflation, which causes domestic issues, domestic turmoil, citizens revolt kind of thing. And so the way to alleviate that is for the Fed to ride in or the US to ride in and to start purchasing bonds or decrease its inflation rate. But in doing that, then you maybe cause more of an issue in the US with inflation that we already have. And then the US gets its

• 35:59Ryan Sean Adams?

  own political instability, you know, population revolt sort of issues. And we all know The US is not exactly a stable place, or at least certainly not as stable as it has been in the 1990s and the early 2000s, in the 2000s era. So it's like, we've got all of these counteracting forces, some of which are, I guess, just raw, physical, like, energy and the price of energy and that sort of thing, many of which are geopolitical. And it almost feels like the central bank is kind of taking a backseat to like, the Secretary of State and like geopolitical issues. So that is the landscape we find ourselves in right now.

• 36:33Speaker 02

  Oh, yeah, I would agree. And again, there's a decision tree. What and what do the politics dictate for those in charge? And there is no easy solution here.

• 36:41Ryan Sean Adams?

  Can we talk about another difference, I guess, a subtle difference between, you know, Japan and EU and the US? And that is demographics. And you just hinted on it, but there's like this tantalizing, you know, two liner in your article. When you live on a farm, children are free labor. When you live in an apartment, children are expensive conversation pieces. I thought that was funny, cleverly put.

• 37:00Speaker 02

  I got it from Peter Zeihan. I have to say.

• 37:04Ryan Sean Adams?

  I've heard him say that before too. But it's this point that as countries mature and become economically more advanced, they start to have less children. And the EU and Japan are in a far worse place than the US. But even the US is starting to have, you know, far fewer children. And, you know, not repopulating your population, that is deflationary from an economic output perspective. And so that's a problem too. Can you reflect on that a little bit?

• 37:31Speaker 02

  Yeah, sure. So I think at the end of the day, we're all a product of the baby boom. This is global across most of the developed world. Post-World War II, everyone had a bunch of kids. And the promise, at least in the US, you know, stay in the US contract. It was, hey, kids, go out, work really hard and spend all your money. Because the US government's got you back when you get old. And, you know, when you get old, we got Medicare, Medicaid, Social Security.

• 38:00Speaker 02

  And we're gonna take care of you. So don't worry about it. Go out, buy the new car, get the starter home, then move up to the next home, get the ski house in Tahoe, get the beach pad on the Hamptons, get the boat, do all that stuff. Don't save your money because the government's got you. And so the third rail of US politics is healthcare spending. I don't care if Republican or Democrat, there is no chance that you will be reelected if you vote against old people and their healthcare. Because it was a promise, an implicit promise made to the boomers of this is how it's gonna go. We can work really hard and do what you're supposed to do. Now unfortunately, they didn't have enough kids to support them.

• 38:42Speaker 02

  And their kids aren't making enough assets, right? The boomers have all the assets. They have what 35, 40 trillion dollars of financial assets. The millennials, you know, are probably one of the worst off generations. And I don't know what the Gen Z situation is. Gen X is just not that big. So it doesn't really matter. And so like, who's gonna take care of all these old people? Who's got the money to take care of? We're all the nurses. We're all, you know, we're sitting here on Zoom or I forgot what the name of this app is. We're all computer desk jockeys. We're not doctors, we're not nurses, we're not janitors. We're not, you know, cleaning people's, you know, feces and urine as they die in a hospital bed. That's what we need.

• 39:23Speaker 02

  Because we have the oldest, the biggest generation and the wealthiest who are gonna die over the next, you know, 20 years. And there's not enough stuff and people to support that happening in a way that's going to be affordable. And so that's the real problem. And so as the workforce has aged, the central banks responded by printing money to keep the asset prices high. Everyone feels rich. Stock market's still, you know, doing well. Obviously it's down a bit. Still, you know, it's doing better than it should if you think about the fundamentals. And I think that's a real issue. And, and I think I pointed this out in my article, a very crude chart of, of a very, very long period of time. It looks like the central banks are just printing money to cover the fact that the labor force is declining.

• 40:08Speaker 02

  And they don't have any other way. You just can't create people. You can't create 18, you know, 18 to 55 year old workers just because it's reelection time and you need more people to pay taxes to support the old people. It just doesn't work like that, you know? A baby takes nine months. It takes 18 years to come 18 years old.

• 40:30David Hoffman?

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• 42:35David Hoffman?

  Which contributes funds to One Tree Planted, an organization with ongoing global reforestation efforts, creating a world where digital participation and the health of our environment can live side by side. Soon Maker will be present on all chains in Layer 2s, bringing the biggest and best DeFi credit facility to everywhere there is DeFi. So follow Maker on Twitter @MakerDow and learn from the oldest and most resilient DAO in existence. Arthur, it feels like any place that we inject ourselves in this conversation, everything gets funneled down to like, well, some central bank is printing money. Well, what do we want to talk about? We want to talk about war in Russia? Well, some at the end of that, we're printing money. Want to talk about like our Asian demographics? Well, at the end of that, we're printing money. So like, not only is like the same conclusion, no matter like what part of this conversation we

• 43:19David Hoffman?

  want to start always the same, it also just feels like really messy. And for like a whole entire like industry of crypto people, I think a decent number of them are these cohorts of people that were like, you know what? I don't want in my life, politics and mess. You know what? I want something really simple and really objective, something like code is law or something like this. And so I'm wondering if like, this is a little bit of to like, why you are somebody who's a trader, but specifically a crypto trader. Like, is this why crypto for you is like, well, every single point of like conflict in the real world ends up with a federal bank or a central bank printing money? And it's also just like politically messy every step of the way. And it seems to be like crypto is

• 44:01David Hoffman?

  this really elegant antagonist to both of that, where we have these monetary policies that are codified by code. And, you know, it's not messy. It's actually quite interesting. There is much less political surface area on all of these things. And that makes this thing like a much more just intellectually curious of a industry to be in. Is this like the juxtaposition between these two industries? Is that why you're here?

• 44:22Speaker 02

  I think it's, it's just, it's one of the first times, oh, okay, if we think about transitions in monetary technology, if you want to call it that, right? Double entry bookkeeping, that was what, I don't know, sixteenth century Italy, somewhere around there, Medici's. Yeah, that's right. Um, something around there. Uh, you have the printing press, major technological advances, printing money, right? Paper money, big thing. You have the telegraph, communications, you know, being able to communicate value across the world. That's kind of like Bitcoin. Do you have these big, you know, and you have the, obviously the computer, right? And so we, you know, we're moving forward in the way that money and technology interfaces.

• 45:08Speaker 02

  And we don't consider these things technological advancements, but they are and they were back in the day. If you had a telegraph and the other bank didn't, or the other trader didn't, you had better information and you made better decisions. And so I think crypto is part of politics. It is monetary. If you try to deny that and think it's just, okay, I'm just gonna put some code on a piece of paper. Then you're kind of missing the point. We're reorganizing how we interface with each other socially. With this money thing and we have a new piece of technology, the computer and the internet, cryptography. And we're expressing it in a different way. And we're expressing it in Bitcoin, Ethereum, and you know, all these new things that people's minds have been able to create.

• 45:53Speaker 02

  Because the physical constraint of, okay, I need to, you know, build this massive building. I need to have a bunch of people with guns to guard this fictitious thing we call money. Because that's how we, you know, engender trade amongst each other. Well, I can just code up some lines, put them up on the internet and if enough people like what I've, what I've done, then I've just created value. It's the first time in history that, you know, anyone who wants to learn a little bit of code can literally create their own currency. Never before in the world could you ever do that. And so it's extremely powerful. I think we're unleashing human creativity. I'm like, okay, this is how we've done things. You know, for the last hundreds of thousands of years in terms of social finance, there's another way to do it.

• 46:38Speaker 02

  Is it gonna be more successful or not more successful? I don't know. It's up to the quality of the stuff, um, and the people involved. And how we react to different stimuli. And so I think that's what's supremely interesting. And you want, in my, as a trader, you want to be at the forefront of new technology because you want to have the better tools versus the other competitors, because that's how you become, you know, a better trader and you have better results.

• 47:02David Hoffman?

  Yeah. Yeah. So your answer really just boils down to just, it's the new frontier of digital technology and financial technology. And so, you know, the frontier means like I get to front run the opportunity. Of course, we say this line every single bankless podcast. But I'm wondering if like this mess that we're getting into with this war in Ukraine and like our conflict with China and just overall the politically chaotic state that we seem to find ourselves in. Do you think that that, once we're done with all of this, whatever that means, whenever there's like a new normal on the other side of the Ukraine war, on the other side of just like the winter here, when we do find ourselves in a new normal, do you think that crypto as an industry will

• 47:39David Hoffman?

  kind of be elevated in the sense that people will kind of see its merits for what it was like, oh, every single central bank's printing money like, well, like there's this Bitcoin thing. It's got this 21 million units. Maybe it's not so crazy after all. Like, how do you think the political landscape changes once we're through all of this mess in terms of crypto? Does crypto have like a main center stage role to play here? Or is it still just kind of like, well, it's like the frontier of technology and so it'll survive under its own merits? Like, how do you think of these things?

• 48:04Speaker 02

  Idiosyncratic personal thing, right? Everyone around the world lives in a different system. Lives in a different country, has different rules. Those countries are going to react in different ways to, you know, this new global conflict that's going on and this new world order that's being worked out and this whole messy process. Hopefully we're not all, you know, ashes and some nuclear conflagration. That's, that's what I hope. And, you know, depending on how a particular country handles it or what's the adversity that they're facing, crypto may be something that's used or maybe not something that's used. It may completely demonstrate its value or be completely useless.

• 48:50Speaker 02

  Like, imagine if you're in a country that decided the best course of action would be to just shut off the internet and shut down the electricity grid. You know, we're just going back to burning wood, go back in your hut, right? Is crypto really going to be useful for you? How are you going to charge your cellphone? Right? So I don't think you can make a blatant statement in saying like crypto is going to demonstrate its value. It might demonstrate its value for a particular set of countries under a particular set of circumstances, but it also might be completely useless, depending on how things turn out.

• 49:20David Hoffman?

  But for you, so for you as a trader, what do you denominate your value in? Is it the dollar? Is it the yen? Is it the euro? Is it Bitcoin? Is it ETH? Is it something else?

• 49:30Speaker 02

  Um, I, you know, I probably need to create a screen for this, but it gets, my thesis is it's oil. At the end of the day, everything I do is predicated on a, you know, oil, let's call it hydrocarbons, right? My whole existence is predicated on hydrocarbons. I'm sitting inside of an air-conditioned apartment, hydrocarbons. I'm talking to you on a computer powered by electricity, hydrocarbons. Bitcoin is mined using, you know, electricity, hydrocarbons. I go to the supermarket to buy my food that's flown all around the world so that I can consume whatever veggie or piece of meat that I want to have, hydrocarbons. The fertilizer used to get the yields that we need, you know, ammonia, you know, potash, all these different things,

• 50:15Speaker 02

  hydrocarbons. My car, hydrocarbons. So everything, I want to go travel, I'm going to get on the plane, jet fuel, hydrocarbons, right? Everything, our whole life. And so your ability to maintain a certain standard of living, depending on your use of hydrocarbons, is the gold standard. It doesn't really matter if you have Bitcoin dollars, gold, yen, euros. If I can't buy enough hydrocarbons to have the lifestyle that I want to live, then I don't have the right mix of investable assets. And that's all that matters to me, at least.

• 50:46David Hoffman?

  And so your denominator is energy. We had this podcast with Joel Menegro from Placeholder, and he really defined capital in, capital is this thing that can influence and change the state of the world. But I think if you really just like boil down to it, that's kind of what energy is. And so your denominator is just like the things that can change the physical atoms of the world. And that just gets really, really meta really, really quickly.

• 51:08Ryan Sean Adams?

  It's like the cost of moving atoms.

• 51:10David Hoffman?

  Yeah.

• 51:11Speaker 02

  Yeah, I mean, our entire human civilization is just, we take the potential energy of the earth, which took the potential energy of the sun. And we convert it into action and that action is our economy and through those actions we build things. And so that's all we do. And the money, money, the best forms of money is just a representation of pure energy because energy is not money because energy is useful. We want to store energy. Storing oil is hard. Want to store natural gas is hard. Storing Bitcoin is easy. If I can't go in the, and you know, in my basement and go store some oil that I need to use next year, but I can store Bitcoin because Bitcoin is basically

• 51:52Speaker 02

  pure energy that's spent to solve math problems. Okay, I'll take the Bitcoin. Or, you know, the dollar is, you know, the US military's ability to go get oil from around the world and deliver it to whole loads of dollars so that they can buy things. Okay, then maybe a whole some dollars or maybe a whole some euros or maybe a whole the ruble because the ruble has vast stores of energy and they're willing to sell it to the world for the ruble. So at the end of the day, I just want to own claims on energy and I don't want those claims to depreciate over time. I don't want there to be a billion dollars for a billion barrels of oil. And then 10 years from now, it's $10 trillion for the same billion barrels

• 52:33Speaker 02

  of oil. Right? Unless my wealth has gone up by that much, then I've actually lost energy purchasing power. And that's how I like to think about things.

• 52:41Ryan Sean Adams?

  So you want your store value to be the thing that preserves the value relative to hydrocarbons?

• 52:46Speaker 02

  Basically.

• 52:47Ryan Sean Adams?

  Basically. And that could be a portfolio of assets, but it's not necessarily just Bitcoin and ETH. You know, it could be a whole portfolio of things.

• 52:54Speaker 02

  Correct.

• 52:55Ryan Sean Adams?

  Interesting.

• 52:56David Hoffman?

  That's the first time I've ever had that perspective. Is that an Arthur Hayes original or is that borrowed from somebody that you respect?

• 53:00Speaker 02

  No, I mean, this, I think it's just reading about different things and like trying to like go into the real, what is this piece of paper or this, you know, big credit that I have? What did it actually represent? Well, it allows me to go and request something of value from somebody else and they're going to give me their time, they're going to give me something that they own and they're going to take this piece of paper that's fictitious. Or they're gonna take this Bitcoin that's made up, or they're gonna take this shiny rock, and they're gonna give me something of value, they give me their time, they're gonna give me essentially their energy output.

• 53:34Ryan Sean Adams?

  Hmm.

• 53:34Speaker 02

  That's what money is. And because I can't store oil as an individual, or even if, you know, it's very hard to do at a major scale as well, that's why we have money, because money makes things easier. Because we all had to like, carry around a little barrel of oil, like, hey, hey guys, you wanna give me an hour of work?

• 53:50Ryan Sean Adams?

  Yeah.

• 53:51Speaker 02

  Here's a little barrel of oil. And they're like, okay, cool.

• 53:55Ryan Sean Adams?

  I mean, what's so interesting to me about all those different like things that you select for your store of value relative to like, um, its ability to retain value against hydrocarbons is it really depends, like, on kind of the settlement guarantees of various things, based on how the world pans out. Like, if we go full dystopia, like, post some World War III event, right? Like, ain't none of those things gonna matter, because we might not even have electricity. We might be back to, like, fire.

• 54:23Speaker 02

  Hmm.

• 54:23Ryan Sean Adams?

  You know what I mean? And like, we're way back in time. But if maybe an individual country breaks down, their global banking system breaks down, then maybe IOUs that you held in that fiat currency, or in that, you know, kind of that, the banks in that country, then those are no longer good. So it feels like you have to keep on shifting your portfolio relative to events that are happening around the world, and to plan for different possible scenarios, from like, bad cases, all the way to kind of like, best cases, where there's no new world order and the world continues to function as normal.

• 54:54Speaker 02

  Absolutely. Anyone who says that they have the solution and never changes is selling you dog shit.

• 55:01David Hoffman?

  Now, I can't help to put on my ETH cap and notice that, like, ETH, we call this gas, and actually, when you make a transaction on Ethereum, somebody's CPU actually heats up and expends energy to run that computation. And Arthur, you're, all of your, not all of your articles, but all of your crypto-focused articles lately have all been focused on ETH. So can you give us, after we've gone through like macro and what you denominate it, and can you give us, like, why are you so hyper-focused on Ether right now?

• 55:28Speaker 02

  So I think, you know, I obviously made this call about the Fed pivoting, and maybe it happens, maybe it doesn't. And I've, a recent essay that I posted, I've cobbled together this liquidity index and shown how it's very well fit in terms of Bitcoin goes, how the dollar liquidity goes. And you know, it's very, very difficult to forecast the politics behind what the central bank is going to do in a short period of time, like over the next, you know, year. I mean, I have a very strong view about what they're going to do over the next five to 10 years, inflation, inflation, inflation, you know, default by any other mean called the vault. But that doesn't help you today. However, this ETH thing is interesting. We have the number two currency that's going from proof of work to proof of stake.

• 56:12Speaker 02

  Now, whether or not that's a good thing is irrelevant. We, but the structural fact is there's less issuance of it. And it's the only currency of this size that's doing this switch. So it's not like we care about what Solana is doing, or Cardano is doing, or me, or any of these other, you know, L1 competitors, ETH, it doesn't matter. It isn't about whether or not ETH processes more TPS than the other competitor. It's here is a emission schedule and an inflation schedule and a value. We know what it's going to be afterwards. We know it's almost impossible for you to pre-trade this situation. The flow is just going to be the flows, similar to the Bitcoin halving. We know how Bitcoin halvings have panned out over time. So I love this trade because I can be wrong on the Fed

• 56:57Speaker 02

  and still make money, in my opinion, on Ethereum, because the structural flows are dramatically changing in such a way that it gives, I think, a price enough upside to overcome possibly a negative macro environment. And that's the only trade that I see right now with that sort of setup, and it's a one-time thing. And, you know, assuming that it actually happens and whether it's September 13th or 15th, whenever the date is, and it's successful, then the flows start. And we see, you know, are we going to be in over the next few months? Okay, issuance reduces. Let's see the impact on the price.

• 57:38Speaker 02

  There is an economy. You can say that the transactions have gone down a lot since the boom in DeFi from last summer, last fall, whatever, but it still has the most TVL. It still has the most activity. There are still people using these applications. They're going to be using these applications today. They're going to be using these applications in October after the merge. And so we can sort of come to an idea of like what that's going to look like. And this is the only, you know, we have some stakes in the ground of things that are a political decision by a bunch of people that we have no influence over. That's why I love this trade, because I can be wrong in everything else and still be right.

• 58:14Ryan Sean Adams?

  So you love this trade because you can be wrong on the Fed, you can be wrong on Ethereum even winning, like another competitor could blow past it in the future. You could be wrong on just about every other point in like the thesis, but it doesn't matter because this is a structural change. It's a one-time event and the flows are fundamentally changing. And that's kind of like guaranteed as long as the merge is successful. And so this trade is like a no-brainer in your mind?

• 58:41Speaker 02

  Yes.

• 58:41Ryan Sean Adams?

  Okay. Well, so if it's a no-brainer, why is it priced in? Or is it priced in already?

• 58:46Speaker 02

  I don't think people believe the merge is going to happen still. And I also like, absolutely. I don't even, I mean, I can't sit here and tell you that I think for, you know, 100% that, okay, they're going to switch to proof of stake and it's thinking they're going to blow up. I don't know. What do I know? I'm just a trader. I'm not in the trenches like, you know, been a Ethereum developer since 2014 and built this thing, right? And if you've been around long enough, you've heard the talk, talk about proof of state, I don't know, five, six years?

• 59:10Ryan Sean Adams?

  Six plus, yeah.

• 59:10Speaker 02

  Forever. Five, seven years, whatever, however long. He's been talking about it since he started Ethereum. Has it happened yet? No. Right? And so your default response is, okay, show me. Show me proof of state. Show me that it works. Show me that all the different applications function just as they did before. Show me that there's not going to be some bug that you didn't think of, some edge case that's going to blow up in your face and you're going to require a hard fork to go right back to proof of work. Show me. You can't, there's no, there's nothing that's going to prove to me that's going to happen until it actually happens. And I think a lot of people are of that opinion. And I think that's the rational way to believe it, especially as someone who was a former tech CEO. Nothing's

• 59:51Speaker 02

  ever shipped on time. Nothing ever works as it's supposed to. And I know that with 100% certainty.

• 59:58David Hoffman?

  I recently wrote an article rebutting a bear case for the merge, where a merge was overhyped argument. And one thing I've been thinking about is like, how much does the state of the Ethereum merge actually permeate to the rest of the crypto markets? Now, me and Ryan, like some of our friends are working on client teams for the Ethereum merge. So we're very tapped in, right? This is the thing that we almost like know the most about. And me, Ryan, Anthony, Sazano, a few other of the Ethereum, like second layer around the core devs are all pricing in like a 95% chance that the merge goes perfectly fine. And then I've realized as you get further away from these people, like the odds of the merge going well, in their opinion, goes down and down and down. But I can't really

• 1:00:38David Hoffman?

  find like, a cohort of the crypto industry that is waiting with like cash on hand and saying, as soon as the merge goes through and it's successful, I'll buy. Like, either you're a Bitcoiner, you don't need that.

• 1:00:53Speaker 02

  That's the point. They don't need that. If there is so much usage, if there's 100 units of uses today that needs to pay gas, right? And now they're not selling as much of the thing, of the gas token, but there's still 100 units of demand to use the apps. It doesn't, you don't need any new buyers. You just need the usage.

• 1:01:13David Hoffman?

  Okay. So the whole idea of like a sell the news event is like traders gonna trade, people will speculate around the merge. You're saying that that's just irrelevant because of the actual fundamentals of the merge?

• 1:01:21Speaker 02

  Yeah, okay, sure. There could be, you gotta sell the news and maybe the price goes up 20%. Okay. But unless you're telling me that the number one repository of DeFi applications is gonna stop, and even from today's levels, which are depressed, it's gonna go down 95, 90, 95%, then what you're telling me is, there's a certain demand to pay gas, the supply goes from 100 to 10, or something where the 90% down, whatever the amount is, right? Ergo, demand is greater than supply, the price has to rise. That's unless you're telling me that DeFi usage and DAP usage go falls off a cliff with the issuance amount as well. If you're not saying that, then you're saying that the price, the demand is at the margin is greater than the supply.

• 1:02:07Speaker 02

  Therefore, the price has to rise, in my opinion.

• 1:02:10Ryan Sean Adams?

  So Arthur, if the merge isn't priced in, then like, what should the price of ETH be? Like, what's your target price for ETH? Right? Like a range?

• 1:02:17Speaker 02

  I mean, I've bought calls, and I think I've said this in my essays, like 3,000 strike calls. I think that's the largest strike in terms of open interest on Derbit right now. So I think that's, if you want to talk about where the market's really expecting, everybody's trading that strike now. Let's call 3,000.

• 1:02:32Ryan Sean Adams?

  By end of year.

• 1:02:33Speaker 02

  By end of year. That would be my hope.

• 1:02:35Ryan Sean Adams?

  And that's almost like in your mind, that's almost regardless of what happens to the Fed, what happens in, you know, kind of crypto markets, what happens with?

• 1:02:43Speaker 02

  Of course, if they can influence that lower, but for ETH to stand still, the, you know, well, maybe the Fed's gonna raise rates to 20% overnight. I don't think that's gonna happen. But at the end of the, if there's a certain amount of demand and the supply isn't there to meet it, the price goes up. And it doesn't matter if the cost of dollars is 4% or 25%. And that's why I like to trade, because there's nothing to do about the liquidity constraint of the dollar, which a lot of crypto is a liquidity play on on the global reserve currency, because that's the system that we're rebelling against. We're saying this is a bad way to do things. We have a better way of doing things. But everybody's assets are in dollars, so if the cost of dollars goes up, then it, you know, kind of makes it more difficult to put into this new thing.

• 1:03:27Speaker 02

  This isn't about liquidity.

• 1:03:29Ryan Sean Adams?

  Arthur, you've been in crypto for like 10 years now, right? So you've seen a few happenings, you've seen more than your fair share of like different trade type opportunities. Is this kind of different? Like, what's different about this? What's the magnitude of this? I mean, I think you've called this like a, I don't know, once in a lifetime opportunity, but like, kind of akin to that. I'm paraphrasing your language here, but like, is this pretty unique?

• 1:03:51Speaker 02

  I think this is the only, what, maybe you guys are probably deeper into this than I am. Like, tell me another coin that's moved from proof of work to proof of stake.

• 1:04:01Ryan Sean Adams?

  Doesn't exist.

• 1:04:01Speaker 02

  Especially one that has, what's it called, like $200 billion of market cap or whatever it is, right?

• 1:04:06Ryan Sean Adams?

  Right.

• 1:04:06Speaker 02

  So that is, it's a one of one sample size.

• 1:04:09Ryan Sean Adams?

  Right.

• 1:04:10David Hoffman?

  Yeah, that's my big argument as to like, why you can't really like trader is going to trade, but you can't like price this thing in ahead of time. It's never been done before and it's so like systemically about the value of the asset about like reducing this issuance of ether that like people that think that traders are going to trade this and sell the news event like it's just too big. It's too big for that, especially in a bear market.

• 1:04:35Speaker 02

  You'd have to be able to forecast the amount of transactions on the network.

• 1:04:39David Hoffman?

  Yeah.

• 1:04:40Speaker 02

  To a very, very specific degree and then you'd have to pre-trade that, right? You'd have to trade those flows and be able to trade them post, pre and post the merge. That's what you'd be trading and that's a very, very hard thing to handicap, right?

• 1:04:51David Hoffman?

  What's interesting is this entire argument is like all based around flows. It's not based around narrative, but do you think there's a narrative element? So like finally, after five years, proof of stake finally ships and the merge goes well.

• 1:05:04Speaker 02

  Look at that.

• 1:05:04David Hoffman?

  They actually did it. You wrote this post on reflexivity. Does that, you know, come into play here?

• 1:05:09Speaker 02

  I think the reflexivity is more in the price to flows, to developer activity, to users using the app. That's different, you know, but obviously there's going to be a product narrative like, okay, they pulled this very, very difficult technical thing off. I think we'd be in a much different sort of narrative construction if this merge event didn't fall on the heels of the entire credit part of the crypto ecosystem blowing up, right? So imagine the bullishness of just the average trader if they hadn't just lost all their money to Terra and Three Arrows.

• 1:05:40Speaker 02

  And it's not just the retail punter. It's, you know, the biggest hedge funds, the biggest lending nest, they all got, they all got smoked, right? And so, yeah, are you really going to be like, oh yeah, I need to go like cap in hand to my investors and raise a bunch more money when I guess prove they have no risk management policies and go buy this ether thing when they, when the dude's been talking about proof of mistake for the last six years, but hasn't done it.

• 1:06:01David Hoffman?

  Right.

• 1:06:01Speaker 02

  Please give me some more money investors. I'm like, get the fuck out of here.

• 1:06:05David Hoffman?

  Wow. Yeah. So you're just saying like the appetite for the merge, like even for like the newer people that got into this base and bought the top of the NFT market in 2021. They just don't want to hear it. Like, oh, do you guys, the merge is so bullish. You gotta buy ETH. And then all these people are like, I don't care.

• 1:06:17Ryan Sean Adams?

  Yeah, they're like, just like you told me to buy Luna. Like, yeah, get out of here.

• 1:06:21David Hoffman?

  Yeah. Uh huh. Yeah.

• 1:06:23Speaker 02

  Yeah, show me. I know they show me like it's tech. It's hard. Everyone knows tech is hard. Tech ships late. They have this date. Does anyone really believe it's gonna happen? I know you guys are close to it, but even me, right? I've been writing about this, but I can't go out there and definitively say, yes, September 13th or whenever the date is, that's the date. I have all this confidence. I have no confidence. I have no idea. I think it'll be around that time. But again, I'm not a very technical person. And I've been around this and I'm too jaded.

• 1:06:51Ryan Sean Adams?

  What are the mechanics behind trading this? I think one of your posts went through a few different approaches, like obviously you could go spot and purchase, just go long ETH. You mentioned, you know, some derivatives plays. Maybe there's some option plays here. What are you seeing when you look at it with?

• 1:07:05Speaker 02

  As soon as you move away from spot and you start adding leverage and optionality, possibility of liquidation, financing, because everything trades at a premier discount to the underlying value, you add a concept of timing. And so you have to have a view on the timing and have a very good confidence in the timing. So unless you have a very good view on the timing and have confidence in the timing, whether that's the 13th of September, or it's gonna get delayed if you have an October, or whatever it is, right? You're gonna pay for that timing. The more time buff you want to have, the more money you're gonna pay. The more exact you want to get about the timing, the less you pay and the more upside you have. And so it's a dial and it really depends on your confidence in the team's ability.

• 1:07:49Speaker 02

  You know, assuming that it happens, when does it happen? Right? Okay. And then how long is the positive reflexive loop? Are you giving yourself enough time for that really to kick in? Or are you saying because it happened, then traders are going to front run the reflexivity and push the price up well before it flows kind of? So you have to make all these, all these decisions, but it's not that straightforward. So the easiest is obviously spot. But then again, you're not gonna have leverage and you're not gonna get the big juice. But if you're willing to take those bets. Then you have the really good timing to it.

• 1:08:22David Hoffman?

  You've touched on a debate that we've had on the show before is like, how long does this thing actually take to price in? And some people are in the months, not years camp, as in like one, two, three months after the merge, you actually start to see those structural flows that favor ether actually show up in the price. And others are like, it's going to take years for this really to like, first, the miners still have all their supply that they need to sell. And you know, there's just a bunch of noise that the structural flows has to cut through. Did you have a take on the timing of like, how long it takes for the improvement of the economics of ether to take to actually show up in the price?

• 1:08:57Speaker 02

  Not really. I haven't really done enough work on it. I mean, I think you have to have a very, apart from the miners and now they're going to dump their ether or not. It's okay. You have to forecast the level of usage of the network.

• 1:09:08David Hoffman?

  Okay.

• 1:09:08Speaker 02

  Have a very good idea of what that's going to be because that's going to say, okay, how much, how much, what's the gas fees are going to be that are going to be not offset by inflation. Therefore, the price goes up. That's your, that's what you're trading.

• 1:09:19David Hoffman?

  What if I told you that the current gas prices, which like it's been averaging 10 to 12 for the last like month or so, was like the bottom of gas prices? Would that make you more bullish or is that kind of like what you've already priced in?

• 1:09:32Speaker 02

  I mean, that will make me more bullish, but again, there's, there's so many conflicting factors. My reason why I chose a December strike, you know, it's obviously liquid. So that, that's end of year, the, you know, fourth quarter, people usually, things either go up a lot or down a lot in the fourth quarter. It's human nature, right? And cycles. And then at the end of the day, they will have proven that they could get a very difficult technical thing done. And that speaks volumes to the quality of the team. Doesn't matter what that technical thing is. The fact that they were able to do it is very bullish. And that this is a narrative construction thing. And so, you know, just, you know, finger in the air, pick your number out of my ass and, you know, just go for it.

• 1:10:17David Hoffman?

  That's my favorite kind of analysis. All right. One last question on this train. Earlier you said it's your favorite trade just because you'll make money in your opinion, regardless of what macro does. Like even if macro shits the bed, like the merge is still bullish enough to get you in the green. Why do you think that the merge is more powerful than macro? Or is that what you're saying?

• 1:10:36Speaker 02

  No, I am saying the merge is more powerful than macro. If you're reducing this inflation supply by 90% of the supply that's being. emitted by ninety percent. You guys correct me if that number is right or wrong.

• 1:10:46David Hoffman?

  It's about right, yeah.

• 1:10:47Speaker 02

  And the price of ether is already down ninety percent, whatever it is, from five thousand each to eight hundred. We had the macro crash. We had credit collapse because we increased all liquidity. This is just classic, you know, emerging market. This could be nineteen ninety eight in Asia. This could be Russia. This could be, you know, LDC crisis. This could be tequila crisis. This could be, pick your crisis over the last two or three hundred years of finance where you had too much money chasing too few good opportunities. My credit perspective, crypto is one hundred percent rhymes with that ethos. We had the flush of all the leverage from the system, in my view. So we've taken, we've done the hard thing in the macro.

• 1:11:30Speaker 02

  So, okay, maybe the price could go down another fifty percent to eight hundred or whatever to the lows that we had during the the credit collapse. If, you know, Powell gets his new epiphany, he goes, he's gonna go take rates immediately above inflation. That's not what he said. He said, I'm, you know, we're gonna continue with the pace of the road rolling, which is, you know, maybe it's seventy five basis points in September, maybe another fifteen November, another fifteen December. That's still not nine percent. Volcker took rates up to twenty two percent. He said he doesn't want to be Arthur Burns, Fed chair during this, before the seventies. Arthur Burns took short term rates in the US above inflation. He's neither Arthur Burns nor is he Paul Volcker. He's Jerome Powell at the rate he's at, which is below inflation.

• 1:12:11Speaker 02

  And he's not telling the markets that he's going immediately to, you know, eight and a half on the short term rate, just like that. So I think, yes, the pessimism is warranted, but I do think that reducing the supply of ether emitted to the market by ninety percent on a discrete date while still having the demand to use a network, even at these depressed levels, exceed that. To me, outweighs. The macro impact, especially since I believe that a lot of the pain has already been taken on the macro side.

• 1:12:41Ryan Sean Adams?

  Two things that are really interesting about this bull case for the ETH merge that you've just given. One is that we just gave the bull case for ETH. We haven't mentioned DeFi or NFTs like as a positive catalyst once. And I'm curious your thoughts on those like those sectors, DeFi and NFTs. And secondly, I'm curious about this transformation, maybe like a conversion process for you personally on ETH, the asset. Because I remember back in 2018, was it? And these were dark times in the crypto market, one of many dark times that we've all been through together in crypto. But double-digit shitcoin, I don't know if that was a post title, Arthur, but you definitely got credit.

• 1:13:17Speaker 02

  It was.

• 1:13:17Ryan Sean Adams?

  For calling, for calling ETH to double digits at a time when like, that was inconceivable, I think, for ETH bulls that we would drop down to double digits. And sure enough, we did. Also extremely offensive. It was painful for my bags, Arthur. And yet, that's exactly what happened. And this was, you know, happened in March of 2020 during kind of the COVID drop. We went down below 80 on some charts, definitely into the double digits for Ether. But from double-digit shitcoin to now Arthur is five ducking digits bullish on Ether, the asset. So tell me about that. Both the transformation for you, Arthur Hayes, becoming an ETH bull. And then also, tell me about DeFi and NFTs. Does this feed into your thesis at all?

• 1:14:02Speaker 02

  So I mean, when I made that call on Ether, it was already going down, it peaked at what, 1400? And it was on its way down to, you know, its first real cycle, right? Going down 95% or whatever, similar to Bitcoin. And there wasn't DeFi in the way in which we know it today, right? There wasn't a Uniswap dominant. There wasn't Aave. There wasn't Compound. There wasn't a whole ecosystem of people building the new financial primitives to disintermediate the cartel of trust, would I like to call it, of the traditional finance ecosystem. That wasn't around in 2018. We had the promise of maybe something, something like that someday, somewhere, right? And we just had this ETH thing. And people were like, yeah, smart contracts. And we had the ICO fallout and, you know, no more Chinese

• 1:14:47Speaker 02

  market to sell these things into. So yeah, I don't, it was a completely different environment to make that call versus, you know, when I went long ETH and, you know, right after the crash in March, which was, I forgot who sent the chart around. And the market cap of ETH was less than all of the applications that it supported. So either you believe that ETH is complete dogshit and has zero value and therefore these apps are gonna go down, go like that, you know, even when they're already down 99%, most of them, from, you know, a lot of them when they issued in 2017, or hey, this ETH thing is really, really undervalued based on what it can do.

• 1:15:28Speaker 02

  So I took the undervalued, you know, side of things and did very well on that call. And I think subsequent to that, we had the DeFi summer explosion, you know, TVL went up to what 200 billion at its peak, now it's what an 80 or 90 or 60, I don't know, whatever it is, doesn't really matter, but it's way higher than it was in 2018, which was basically zero. So I think we're in a completely different environment. And again, the trade on ETH that I'm bullish about has nothing to do about the stuff on top of it. Unless you're gonna tell me that all the stuff on top of it's gonna stop working today and no one else is gonna use it, then okay, I'll admit then, who cares about the merch? There's no one to spend the money on gas.

• 1:16:05Ryan Sean Adams?

  Arthur, we were just talking earlier about kind of retail getting absolutely massacred over the last few months, certainly.

• 1:16:12Speaker 02

  Retail and institutional. Let's not say that like, these people know anything but more than the dude sitting in the basement, dude or woman sitting in their basement, they know absolutely the same.

• 1:16:21Ryan Sean Adams?

  You believe that's true, that there's no such thing as smart money? At least, smart money doesn't wear a tie, maybe we'll say that.

• 1:16:27Speaker 02

  Uh, I mean, there are smart money managers and there's probably only a handful of them, right? You know, the Soros's, the Druckenmiller's, the Paul Tudor Jones, these types, you know, they're, you know, geniuses in what they do, you know, very methodical, but most of everyone else is a muppet who manages money. They, they sit there, you know, they went to the right school, they wear the right clothes, they talk the right way, and they get allocated money, and that's the game. And that's perfectly fine, nothing wrong with that. But to call them money managers and stewards of capital is doing that sort of concept of disservice, in my opinion. And so, a lot of people who got massacred. Didn't think through what they were trading. They made the same mistake that everyone else made.

• 1:17:11Speaker 02

  And then I'll use Terra as an example. Everyone's like shitting on Dequan for, you know, being this evil person possibly. As an outsider looking in, I don't know anything about the guy. I never met him once. Um, and as an outside observer, Terra was written about in the white paper. They told you exactly what's going to happen in this scenario. The death spiral, it's there. The math is there. No lie. People didn't read the white paper and then they're surprised they lost all their money. And that's the retail person. And that's the institutional money manager who went out there and told people you can give them a 20% yield with infinite sharp ratio because there's no drawdowns ever. Right? It's the same trade. And so again,

• 1:17:53Speaker 02

  and then crypto, at least I don't really see much of a difference in terms of institutional. Yes, there's some very talented traders, very few of them, um, who can make money in all different circumstances and have very good risk management. But again, I don't see, I wouldn't denigrate retail of saying that they don't know anything. And there's all these smart people who are institutional who manage money who know better. That's a fallacy.

• 1:18:16Ryan Sean Adams?

  I gotta say, what's interesting is like probably six months ago, someone would publish a list of the top 10 well-known crypto traders, right? I don't know entirely who would be on that list. I do know that your name would probably appear on that list. Um, but I also think at the time, Three Arrows Capital would definitely appear on that list. Suzu and Kyle Davis probably as number one. You're still here. Many of them are not here. How? How do you last throughout multiple cycles as somebody playing the crypto trading game? Like for me, it's like, I don't dabble much in crypto trading, so I'm kind of buy and hold, right? Like invest in things go long, that sort of thing, very low margin, if any margin. So I've got that survivability. It's not that hard as long as I'm willing to like,

• 1:19:02Ryan Sean Adams?

  not sell, which does require some amount of skill. But as a trader, you can get completely like wiped out on some of these cycles.

• 1:19:10Speaker 02

  I mean, at the end of the day, it's all about position sizing. And again, I don't know anything more than what's been published in the press about Three Arrows, but to me, they made the wrong trade. They didn't size their positions correctly. You know? I've been wrong on a lot of things. I don't have to be right, but as long as I'm right on a few things, but my positions, my sizing is, is the way it needs to be on things that I've done right on, then net out, net, net, I'll, I'll be okay. And so again, it's all about a position sizing and I don't really manage other people's money and I'm not trying to be a hedge fund and, you know, trying to make a business out of this and all that sort of stuff. I wouldn't say it's apples of apples, apples in that respect.

• 1:19:49David Hoffman?

  Arthur, as we look beyond the merge and this trade kind of plays out, right? Ether goes up, we're all super happy. We have more money than we did before. Hooray. What's next after the merge? Or do you actually plan on keeping ether as like your store of value, at least for the foreseeable future?

• 1:20:06Speaker 02

  I guess we'll see. We'll see how, how that pans out, right? Because let's say if it zooms ahead, right? Again, nothing goes up or down in a straight line. And so at the end of the day, do you harvest some of those profits back into Bitcoin, which is again, my true money in the crypto sense ether is a commodity. It's not money. In my opinion, that's in my textology. Bitcoin is money, the only money in crypto. And so do I harvest profits if they exist back into Bitcoin? And wait for whatever the next new thing is, because at some point, the trend or the price in either will be over, will overshoot the intrinsic value, whatever that intrinsic value

• 1:20:47Speaker 02

  is, or however you define it. And at that point, then it's time to move on to, you go back to your monetary base asset. And you look at the landscape and you make a decision on where to go next.

• 1:20:58David Hoffman?

  Arthur, Bankless listeners will know that I'm like pretty bad at math, so I'm hoping you can help me with this one. Can you remind me what one D equals?

• 1:21:05Speaker 02

  One B.

• 1:21:09Ryan Sean Adams?

  This is some kind of NFT, NFT insider game. I think you guys are just playing right there. Arthur, it's been awesome to have you. I'm just curious, what are you spending your time on these days? Like what's kind of a day in the life of Arthur? And aside from more writing, which I assume you're now, you know, addicted to as good writers often get addicted to publishing great articles and trading. What else are you spending your time on?

• 1:21:31Speaker 02

  I read a lot of books. So whether that's like, I like sci-fi. So I read sci-fi, I read economics books, read random fiction, play tennis.

• 1:21:43Speaker 02

  Work out a lot, do a lot of yoga. Yeah, and then see what becomes interesting. But yeah, I spend a lot of my day reading and I like to have that time to, you know, I like being a writer and the only way to get better at writing is read people who are better than you at it.

• 1:21:56Ryan Sean Adams?

  It sounds like a good life, certainly. All right. Where can people find your blog and get access to some of your writing?

• 1:22:01Speaker 02

  Medium, CryptoHaze, that's the place where all my articles are published. They come out whenever they come out. And yeah, Twitter, obviously @CryptoHaze is my Twitter handle and I'll like publish links to all of my articles on that as well.

• 1:22:16Ryan Sean Adams?

  Awesome. This episode absolutely delivered. Arthur Hayes, bullish on the merge, giving us a tour of force on the forces at work in macro. It's been awesome to have you on the show. Thanks, Arthur.

• 1:22:26Speaker 02

  Thanks, guys.

• 1:22:27Ryan Sean Adams?

  Bankless Nation, some action items for you today. We'll include a link to Arthur's articles at CryptoHaze.media. A few you gotta check out. Samurai Knight and a Yankee, I mentioned this in the episode. We'll include a link directly to that. Also, read some of Arthur's articles on the ETH merge. Max Bidding is one of them. ETH Flexive is another one. Include a few links. And of course, just a reminder, you can also become a premium subscriber. So right after Arthur logs off, David and I are getting on for an episode we call the debrief, which is our episode after the episode. You can stick around and catch that episode if you are a premium subscriber. You want to upgrade, become a premium subscriber, click a link in the show notes for that. As always, risks and disclaimers.

• 1:23:10Ryan Sean Adams?

  All this stuff is risky. Crypto is risky. You could definitely lose what you put in, but we're headed west. This is the frontier. It's not for everyone, but we're glad you're with us on the bankless journey. Thanks a lot.