When Will We Go Parabolic This Cycle? | RSA+DH

After 3 months of flat crypto prices, people are asking “where are we in the cycle”? What if the real bull hasn't even started yet? How big of the impact can the ETH ETF's really have and can they really take us to the coveted.... Banana Zone? All of that and more on this weeks episode of Bankless Takes. ------ ✨ Mint the episode on Zora ✨ https://zora.co/collect/zora:0x0c294913a7596b427add7dcbd6d7bbfc7338d53f/10 ------ 🔐 GridPlus Lattice1 Hardware Wallet (use discount code BANKLESS2024 at checkout for 15% off) https://gridplus.io/products/grid-lattice1 ------ BANKLESS SPONSOR TOOLS: 🐙KRAKEN | MOST-TRUSTED CRYPTO EXCHANGE https://k.xyz/bankless-pod-q2 ⁠ 🛞MANTLE | MODULAR LAYER 2 NETWORK https://bankless.cc/Mantle ⚡️ CARTESI | LINUX-POWERED ROLLUPS https://bankless.cc/CartesiGovernance 🏠 CASA | SECURE YOUR GENERATIONAL WEALTH https://bankless.cc/Casa 🌐 TRANSPORTER | CROSS CHAINS WITH CONFIDENCE https://transporter.io/ 🔗CELO | CEL2 COMING SOON https://bankless.cc/Celo ------ TIMESTAMPS 00:00 Intro 03:18 The Bull Run is Boring 06:35 What Inning Are We In? 16:28 Demand For Gold Reserves 23:19 The Banana Zone 28:22 ETH ETF Impact 35:30 Celeb Memecoins 43:12 Key Takeaways ------ Not financial or tax advice. See our investment disclosures here: https://www.bankless.com/disclosures⁠ https://www.bankless.com/disclosures%E2%81%A0

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

• 0:04Ryan Sean Adams?

  Bankless Station, we have a Bankless Takes episode for you because we wanted to just talk about, get some of our ideas out there and the ideas going on and where we are in the current crypto cycle. Is it over yet? Are we about to enter all-time highs? I don't know. We're in kind of like this flat zone. So what are we talking about today, David?

• 0:22David Hoffman?

  There's a lot of conversations going on that I want to just elevate here on the episode today and just kind of unpack. One of them is where exactly are we in this cycle? After three months of flat crypto prices, I think people are just like rehashing out the conversation of like, is this, is this the bull market? Or maybe the bull market hasn't even actually started yet? And we were just like psy-opted by a premature like bull market that was pulled forward due to like the Solana season and the Bitcoin ETF. Maybe the bull market actually just hasn't even started yet. So people are having this conversation. Also, people are talking about the Ether ETF, and it might miss the mark in terms of flows and expectations, or it might do the opposite

• 1:05David Hoffman?

  and enter the banana zone. Also, WTF is the banana zone? So we have to kind of define that as well.

• 1:11Ryan Sean Adams?

  That's like a Raul Paul term. And by the way, he says banana zone. He gives it this like incredible accent, which I think is part of the reason it's picked up so well.

• 1:21David Hoffman?

  Oh, because it's a meme?

• 1:22Ryan Sean Adams?

  Yeah, I mean, just banana zone versus the way we say is way better.

• 1:27David Hoffman?

  Also, China is buying a lot of gold. And so what's going on over there? And what does that have to do with risk on assets? And what does that have to do with Bitcoin? And not connected to anything else, but we'll also give a quick update on the Iggy Azalea meme coin, because that's what everyone wants to talk about.

• 1:44Ryan Sean Adams?

  Do we have to? Do you have to do that, David?

• 1:46David Hoffman?

  Depends on how long we go.

• 1:48Ryan Sean Adams?

  All right. Well, before we begin, we gotta do a shout out for our friends and sponsors over at Grid Plus and talk about an opportunity for all Bankless listeners that have tuned into this. David, what is a Lattice One? What is Grid Plus? And what's the opportunity for everyone listening to this episode?

• 2:06David Hoffman?

  Yeah, Gridplus is a hardware wallet company that makes the Lattice 1. The Lattice 1 is the thing that you see on your screen. It is an absolute Fort Knox for your crypto. Now, I had the pleasure of meeting the founder of Gridplus, Justin, I think in 2019. And it became immediately obvious that this guy is obsessed with hardware security. Like, he was asking like ETH 2.0 spec questions to one of the ETH core devs just to make sure that like he could retain his like uber security while also staking his ether. So like, the guy knows a thing or two. We're going to talk more about Justin and Gridplus and like how it is a Fort Knox for your crypto. It's got a large 5-inch touchscreen. People very frequently have it on their desk right next to their computer.

• 2:50David Hoffman?

  There's a bonus for Bankless listeners. You can get 15% off with Bankless 2024. If you check out, you can get 25, 15% off only in the first week of June. So make sure you're doing that now. And there is a link in the show notes to get started. If you're curious about what the Lattice is, what Gridplus is, we're going to have a Twitter space with Justin in the future. So tune into that if you want.

• 3:09Ryan Sean Adams?

  Yeah, this is a dialed up version of a ledger for sure for the crypto veterans who want to be a lot more secure. I think Fort Knox for your crypto is a good description. All right, David, let's get in. Where do, where do we start this conversation from like where we are in the cycle perspective? Should we start with this tweet from Ignis? They start like this. "This bull run is boring."

• 3:30David Hoffman?

  Thanks for asking.

• 3:31Ryan Sean Adams?

  I gotta admit, I know, I prompted the question because I know you already put it in the agenda disorder, but "this bull market is boring" is kind of a sentiment that a lot of listeners are probably feeling right now, right? Because I think, I don't know what our attention span is in crypto, but it's got to be a lot shorter than everybody else. And so the last, I mean, we got the Ethereum ETF and we got a price bump, but it felt like a price bump for ants. And I'm back to being a little bit bored. Some people listening are back to being a little bit bored.

• 4:03David Hoffman?

  I would also say that this has been a theme for a while, that this is the first like price appreciation site, if we even call it a bull market, just like the first time that number has gone up due to exogenous factors. Like in 2017 and 2021, we had activities in crypto. In 2017, there was the ICO movement, like regardless of how like toxic that ended up. In 2021 and 2020, we had DeFi summer and NFT mints. There were like things to do and buttons to press. Now, we definitely have the meme coin cycle, but that's kind of contained to mostly Solana. There's a few meme coins on Ethereum, but mostly like the the activities are in like

• 4:45David Hoffman?

  the the just the Solana camp, which is not which is not globally crypto. Like NFT mints happened everywhere across crypto last cycle. And so I think this is one of the reasons why this bull market is like perceived to be like not as exciting is because we don't have any of our own like self perpetuating activities to excite us.

• 5:04Ryan Sean Adams?

  Yeah, there's less fun DeFi DGEN stuff on the frontier, like the the DGEN activity is all around meme coins and celeb coins, which I know you're dying to talk about the celeb coins, David. But like, think about some of the the Bankless podcast this year, and they've been incredibly important. Like, the topics is just incredible that we're here in crypto, but it's been about the ETFs, right? Which is like, okay, institutional finance finally giving a stamp of approval for crypto. I mean, that's cool, but like, really? Or like, government policy?

• 5:36David Hoffman?

  There's no like buttons to press about the ETFs.

• 5:38Ryan Sean Adams?

  Yeah. So or we're talking about macro stuff and interest rate decreases, right? So where are the buttons to press? So it feels very PvP. It feels very boring for the like the people who are crypto natives, I think, at least among some of it, some of us. And the question is, what's going to bring it back? Ignis says that, you know, staking is cool, restaking, this whole thing we've been talking about for a while, but it's also a little bit more for whales, right? So like, if you have a lot of ether, if you have a lot of capital, you know, restaking that whole narrative is about what you can do with that capital. If you're new, maybe not so much. And He concludes by saying that the next boom might come from consumer apps, right? So like you can see vestiges of this with like Fantasy Top, you know, Pump, Friend Tech,

• 6:22Ryan Sean Adams?

  Pumped Up Fun, other kinds of games, we might see it there. This is a Farcaster, daily active users like kind of like going up, not quite hockey stick, but maybe beginnings of something that is up only hockey stick. So the question on everyone's mind is what's going to bring retail into this market? Because it's basically the same crypto natives that we've had for the last 18 months. We're still here. Yeah, we're still doing things, but like there's no new crop.

• 6:49David Hoffman?

  Right. Point farming and meme coins is like, that's for us. That's not like waking up people to the frontier of finance or like the intersection of culture and art and being on chain. That was all like 2021 stuff. So this is like one of the motivations. I said, like, why people think that, you know, maybe just because like Solana did like a 10x off the bottom, Bitcoin got its ETF. Maybe all of that stuff was because of endogenous factors, but the true endogenous crypto cycle hasn't started yet. And so this is what people are starting to like reflect upon. Base Carbon says, "We are actually are very early and the real bull is 2025, but crypto Twitter has been too occupied with calling tops and posting the market

• 7:32David Hoffman?

  cycle chart with where are we to realize it? Zeroth enning. We are still scouting rookies." So this is emblematic of a sentiment that's been going around this week is like, no, we're actually in the zero ending of the bull market. The bull market has not yet started. And Van Spencer also gets a take that's aligned with this. It's like the bull run starts and the first rate cuts happen, by the way. Rates at 5.5% mean that we have a lot of room for things to get silly. Might want to get the rap playlist ready for the big up days. So also basically calling that like, we have not even like shot any of the ammo that we have for a bull market. Now, this is back into like the whole macro commentary.

• 8:15David Hoffman?

  But this has been a take that everyone's had. It's like when rates are at 5.5%, like they only have room to go down.

• 8:22Ryan Sean Adams?

  So this is not the end of the bull cycle. It's not even the beginning of the bull cycle, basically. That is yet to come and that's going to take us to Valhalla.

• 8:31David Hoffman?

  Is a bull market take, for sure. And I think it's really a matter of like, do you think that it's possible that Solana and the GTO airdrop, that just kind of like tugged the bull market cycle, like the curve cycle to the left, it like pulled forward a bit of the bullishness, maybe because Solana was oversold as a result of FTX. And then we got the Bitcoin ETF, right? And so we got price appreciation without like internally native like reasons to go up or like the other bull markets, which were caused by like favorable macro policy.

• 9:07Ryan Sean Adams?

  So that's a take you have. Are you saying, is that different than the take that Vance just gave or the other take that we read out where we're in the zeroth inning? We haven't even started. You're just saying that, I think this is a David Hoffman tweet, that a lot of the bull market activity has just been pulled up into like 2024 because of the Bitcoin ETF and also because of just like Solana had this epic rise from the bottom. And so are you saying that's inconsistent with the real bull market is yet to come? Or is this like the same thing?

• 9:41David Hoffman?

  Yeah, I think people are considering, myself included, that maybe these were idiosyncratic events that don't actually fit the pattern. And the real pattern is like the very typical like insane cycle that we just haven't had yet. I think people are just trying to rationalize like why we've had three months of like sideways price action.

• 9:57Ryan Sean Adams?

  We're starting to get some price targets, not from crypto natives, but from TradFi. So maybe it's more significant when it comes from TradFi? I'm not exactly sure. But here are some Bitcoin price targets. 250K on the low end for this upcoming bull market. Chamath says 500K, 1 million at the high end. And this is Vance saying 250K still feels low to me. Only 30 to 40% of gold? Approximately zero millennials want to own gold. I think, I mean, that's true. That's definitely true for me. I just like, when crypto exists, why own gold? But Vance saying that 250K still feels low, but TradFi is in that range. That's kind of the lower end of the TradFi estimates.

• 10:42Ryan Sean Adams?

  You mentioned Chamath here. So this is like Chamath, notable investor, you know, podcast host in the All In Podcast, right? I think I saw a clip circulating. I haven't watched it yet, but Chamath, I think he's probably on All In, giving his Bitcoin price estimates and the reasons why. Should we play this?

• 10:58David Hoffman?

  Yeah, so this take clip from Chamath happened after the all-in besties were talking about the political favorability to crypto as a result of the Ethereum ETF and the election. And then Chamath starts pivoting into Bitcoin price targets. So let's go ahead and get into that clip right now.

• 11:18Speaker 02

  You should really look at the pattern of Bitcoin after a halving. So here's a little Bitcoin price analysis for you guys. So there's been a couple of halving cycles that have happened. And I asked him to go back and look at the price performance one month after a halving, three months, six months, nine months, 12 months, and 18 months after a halving. And what you notice is that there are these moments, initially, where essentially when you go through a Bitcoin halving, people are sort of reassessing what's happening, and they're trying to figure it out. That's sort of what I would say happens in the first month, and roughly what also happens in the first three months. But then, within six

• 12:02Speaker 02

  months to a year and 18 months of these things, there are these crazy price appreciation cycles that happen. So that's what this page shows, which is, you know, 18 months after the first halving, the Bitcoin price returned 45x. After the second halving, it returned almost 28x. And after this third halving, it returned almost an 8x, which is really incredible returns in such a short period of time. If you go to the next page. And so if you graph that, this is what it starts to show, which is what is this price performance after each of these halving cycles. Now, why is that interesting? Well, it's interesting

• 12:42Speaker 02

  because on top of this halving, which theoretically, if history is a guide, we should see some price appreciation. Obviously, the other thing that's happened is we've commercialized Bitcoin, and we talked about this sort of as my big prediction for 2024, which is these ETFs are really going to allow Bitcoin to cross the chasm and have its sort of central key moment, right? And so if you apply the averages, and again, these are just averages, they're by no means predictions. Okay, so I just want to qualify that.

• 13:14David Hoffman?

  This is not financial advice.

• 13:16Speaker 02

  This is not financial advice. These are just guesses. We took these and we applied it to the price of Bitcoin. And if you go to the next page, you start to see what could happen if you just take the average of the last few cycles. So because the first cycle was so extreme and you start to

• 13:33David Hoffman?

  Oh, so you're just doing cycle two and three here, to be clear.

• 13:35Speaker 02

  Just the averages of cycle two and three. And what you start to see is some really meaningful appreciation. And when I talked to Wences about this, how he explained it, which I, which makes a lot of sense to me is there are a lot of countries that will never look at Bitcoin credibly, even if they support it. The US may be one of those, but there is an increasing body of countries that will become dual currency. And they will look at their local currency and then they will look at Bitcoin and they will say both of these two things are needed. One, when you're transacting on a daily basis for random goods and services. And two, when you need to buy a permanent asset that needs to have residual value, you'll use something like BTC.

• 14:20Speaker 02

  And I think that's a very powerful concept. And if you look at what this price chart could indicate is that if this thing starts to get to these levels of appreciation, it is going to completely replace gold and start to become something that has transactional utility for hard assets. And I think if you marry that with this worry that some folks have about dollar debasement, you start to see some really interesting opportunities.

• 14:49David Hoffman?

  Okay, so the prices on the screen, since he never actually said them, is nine months out, a Bitcoin price of $240,000 from the happening, nine months from the happening, 12 months out, $360,000, and then 18 months out, almost $500,000. So very large price targets. And this is Chamath on, I think actually the most downloaded podcast that exists and the most listened to podcast by in shared like dollar terms. And so the influence of Chamath himself.

• 15:20Ryan Sean Adams?

  At least like tech, tech podcasts, I would say, tech investor podcasts, most downloaded, right? Like it's very influential for that.

• 15:25David Hoffman?

  It's in the top five podcasts, like full stop. Like it doesn't matter what category. And so the amount of influence that this podcast has itself can like actually like help create this outcome.

• 15:37Ryan Sean Adams?

  But he was saying three things. So like, one, he tethered this with the halving, which I want to come back to when we talk about this concept of the banana zone. And two, he said, this time it's different because of the institutional inroads that Bitcoin has made. And then three, he talks about the split between like currencies moving towards store of value versus, you know, payment currencies, like medium of exchange would be our parlance for that, basically. And he said for like, non-US countries, maybe, or maybe at some level even the US in the future, but probably not this cycle, they will begin to think of their currency and their central bank as, you know, like, we need a store of value, we need sort of like, like a gold or like a Bitcoin.

• 16:21Ryan Sean Adams?

  And then we also need our fiat, which is just a payment currency, right? And so maybe this gets into the gold story. Does this tee up the gold story nicely?

• 16:28David Hoffman?

  Yeah, so this is also what's been happening out in the macro world. And this has been happening for a while, but it's just kind of crescendoing slowly. Crescendoing in slow motion. Here's a Balaji tweet where he says, "China sold $50 billion of US bonds last quarter. Officially, they buy $25 billion of gold per year." Officially, he's implying that like, maybe unofficially, they're buying even more. "At that rate, they'll flip reserves by 2026. They will hold more gold than US treasuries." And so, especially China, the, you know, the number two most powerful country out there, when it holds more gold than US treasuries is a big statement as to what is the actual world's reserve currency.

• 17:12David Hoffman?

  Is it the dollar or is it the gold? It's actually kind of defined as like, all right, well, what's on the balance sheet of all the central banks that are on there? And the trend that China is showing is that they want more gold and they don't want US treasuries. And this has to do with the inflation of the dollar, the politicization of the dollar, using the dollar as a weapon, not the lack of credible neutrality in the dollar. And so the reversion back to gold is just like denouncing the dollar as the world reserve currency. Now, people are alluding, and myself included, to that like, a demand for gold on central bank balance sheets is definitely bullish for Bitcoin, because the hop from dollars to Bitcoin on your balance sheet

• 17:54David Hoffman?

  is way bigger of a leap than going from gold to Bitcoin on your balance sheet.

• 17:59Ryan Sean Adams?

  Yeah, like, I mean, to link this to an earlier tweet from Vance, if millennials were running the central banks in their countries, and they soon will be, and some of them are, you know, like, probably rising in prominence and, like, going to become the gray hairs themselves. If they were running the central banks, they wouldn't just be buying gold, they'd be buying gold and crypto, probably like gold and like Bitcoin, at least. This was actually the subject that we got into with Luke Roman in the episode that comes out Monday. So, Bankless listeners, you guys should tune into that. I know he's very bullish on gold as a store of value asset, and also crypto. Like, we'll receive kind of an echo boom for that. This is Balaji going into some more details about this. Chinese state media is

• 18:42Ryan Sean Adams?

  explicit about their goal: reduce dependence on US debt and acquired gold instead. And he sources this statement in the tweet. He says, "The math on anything like this is rough. Still, if this rate continues, they're selling 200 billion per year in bonds. That gets them from 770 billion to 170 billion in US bonds by the end of 2026." That's crazy. That's a crazy reduction in bonds. Conversely, by adding 25 billion in gold per year through official vehicles, they can go from 160 billion in gold to 235 billion in gold by the end of 2026. He concludes the tweet: "Their stated intent is to de-dollarize."

• 19:21David Hoffman?

  To me, when I hear about big nations, big, powerful, wealthy nations de-dollarizing, all I hear is like, okay, that's just one more step towards crypto. That's just like another nail in the coffin of just like the barrier between people owning crypto and not owning crypto. And so, this is why some people are like zooming all the way back out. I mean, like, maybe this bull market that maybe we're in, we're not in, you know, maybe semantics, definitions, whatever, has a lot left to go in it. And this is where Ralph Paul has invoked this idea of the banana zone, as you call it in the intro.

• 19:56Ryan Sean Adams?

  Nice, David.

• 19:56David Hoffman?

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• 23:19Ryan Sean Adams?

  Okay, let's get into the banana zone, David. So Chamath said that the four-year cycles are sort of like Bitcoin halving-driven. I know when we recently had Raul Paul on the podcast, he said, "They are, but they're actually not. It's more about global liquidity." And it just so happens that-

• 23:37David Hoffman?

  Which coincidentally happens at the same time.

• 23:39Ryan Sean Adams?

  Yeah, four-year global liquidity cycles. And I think that's pretty important to his concept of the banana zone. But give it to us. What is the banana zone, David? And how do we know that we're in it?

• 23:50David Hoffman?

  So looking at the charts on screen, if you go back and just look at like all of the Bitcoin bus cycles over the years, if you go to the next bus cycle, the previous bus cycle barely shows up on the chart. Like it is a blip. Like the $20 price rise to Bitcoin in like late 2019, early 2010, looks like nothing when you see it run up to $100 a couple of years later. And when Bitcoin ran up to $1,000, that mark on the chart looks like nothing when Bitcoin went to $20,000.

• 24:21Ryan Sean Adams?

  You gotta adjust those charts in log scale to actually see anything that, you know, like gets exciting.

• 24:26David Hoffman?

  So the banana zone is very easily defined as just like the hockey stick zone. It's when things go bananas.

• 24:32Ryan Sean Adams?

  Yeah.

• 24:32David Hoffman?

  Like things go nuts, absolutely nuts. And previous prices just get like, we are not talking about 2X or 3X. We're talking about order of magnitude. And so if you look at this last chart, there's four charts on the screen for the podcast listeners. And the earlier three charts, which is, you know, the 2011, the 2014, the 2019 era charts, all have this massive leg up where the previous price charts just like don't even show up from the previous cycle. We do not have that leg, this bull market. And that's kind of why the sentiment in crypto is what it is right now is like, yo, where's our, where's our banana zone? When do things go bananas?

• 25:09Ryan Sean Adams?

  So we can very easily tell David, we're not in the banana zone, right? That, that much is clear.

• 25:14David Hoffman?

  Things are not crazy. And I think that's why when we opened up this podcast with DeFi Ignis's tweet, where this bull market's boring. It's like, yeah, because things haven't gone bananas yet. But this is what all of the different commentators are kind of pointing towards is we have 5.5% interest rates can only go down. We have Shamath talking about the patterns post the halving and a price target that would indicate a banana zone, something like $500,000, which is by the way, $500,000 is off the charts of even Raul's chart that we were showing. And so people are saying like, yo, let's, let's be patient, but also like the banana zone is not here yet.

• 25:53Ryan Sean Adams?

  Right.

• 25:53David Hoffman?

  And this is, this is kind of the commentary is going on.

• 25:55Ryan Sean Adams?

  Raul's reason for, for why this happens too, is it's not about the halving. It's about global liquidity. So like, here's a chart showing like the GMI total liquidity index over time. And you can sort of see where we are and we are not anywhere near peak global liquidity. That is yet to come. We're sort of like rising off the bottom of last cycle. But every four years, the, like the world markets macro goes crazy in terms of global liquidity. And that has not yet happened. And that, according to Raul, is the bigger driver for the banana zone than, than the actual halving. But it is on these like four year cycles. And so Raul calls the period that we're in springtime, right? It's not, it's not yet summer, certainly, certainly not winter.

• 26:39Ryan Sean Adams?

  That is, that is after the cycle, but we have not even reached summer. We're just in the early phases of springtime.

• 26:44David Hoffman?

  And I do want to leave room for like, it doesn't have to play out exactly like it has in the past. It doesn't have to be a perfect four-year cycle. Like, we had inflation. We had, we got up 5.5% interest rates. Like, things are different. Like, we had 7% inflation at some point. And so this is perhaps why people are thrown for a curveball for like, the plan of just like, you know, the four-year halving cycle, the four-year global liquidity cycle. Maybe the Bitcoin ETF and the Solana summer pulled forward a bit of the bull market. Maybe the rest of the bull market is actually being pushed right. So like, this is why we are in this three-month, like, with this flat prices where Bitcoin inflows just are kind of paused. We're not really seeing too much action. We have no new retail people. We have no new endogenous catalysts.

• 27:26David Hoffman?

  Maybe the banana zone actually isn't like, we're not, maybe we're not on the cusp of the banana zone. Maybe we're still thawing out from winter. But, you know, throw, throw whatever like timeframes you want on it. The idea is like, the banana zone does come. Like, we do hit like, the summertime. Like, it will arrive.

• 27:42Ryan Sean Adams?

  And here's the thing, given that everything we've, we've talked about so far, it feels like it would be a mistake to be offside in this type of a market.

• 27:52David Hoffman?

  Right. A pre-banana-zone market? No, you want exposure to the bananas.

• 27:56Ryan Sean Adams?

  Where it's like, super obvious that the last three times, we've had a banana-zone moment, and a lot of things are kind of teeing up for us to have another one. Being offside in this type of market, like, that seems to me the worst possible mistake. This is not a guarantee.

• 28:12David Hoffman?

  If you're in crypto, you're here for the banana-zone. That is the one timeframe of a cycle is when you need exposure.

• 28:19Ryan Sean Adams?

  Yeah, absolutely. Okay, so the Ethereum ETF could be part of the catalyst for this banana-zone moment. And Raul calls this the banana-zone squared, actually. He says, "What the hell happens to the price of ETH if there's a big demand for the ETF, and 30% remain staked or off-market? And burning makes supply deeply negative as activity rises? That could create a banana-zone squared." That's what he says. So, tell me about the Ethereum ETF. Do you think that factors in here, David?

• 28:49David Hoffman?

  Well, specifically, he's talking about what happens if there, I think, big demand is means like demand that exceeds expectations while we have like quote unquote ultrasound money. And what that means is 30% of it is staked and we have the burn. And so with, we all know that like ETH, when it responds, when a price goes up, like things get more crazy. Like ETH yields go up because gas fees go up because activity goes up and the burn goes up. And so this is, this is an equivalent of like some ETH head saying that we've never seen a bull market while under proof of stake with the burn. We've never seen have demand, we've never seen net new demand under these conditions of the scarcity of ETH.

• 29:33David Hoffman?

  Where like ETH is being burned off the secondary market and is being staked. And so this is why Raul is saying is like, well, if you add any, any meaningful amount of demand, like you, you, things might get crazy with ETH. And so this is the conversation of just like, well, how much demand will there be from the ETH ETF? And how much, how price sensitive will Ether be to that? Maybe even a low demand will actually create very like responsive price changes in ETH. And then also, well, if that's, if that's true, what happens if there's very high demand for ETH out of the ETH ETF? So this is now where people have entered the conversation these days and last like week or so of like, all right, how much demand for the ETH ETF is there?

• 30:16Ryan Sean Adams?

  There are still, there are still people fading the Ethereum ETF though. And one of the objections has been, well, okay, the Ethereum ETF is cool, but it doesn't even have staking. And so like real investors are going to want to stake their ETH. And so they'll, they'll look at this ETF product and it won't be as good as staked ETH because there's no yield. And so they'll just, they won't press the buy button. They'll just like, you know, keep buying Bitcoin or, you know, some other asset. What do you make of that objection?

• 30:43David Hoffman?

  I think that is silly, in my opinion. And I put this into a facetious tweet where I say, quote, "The ETF will have poor flows due to lack of staking." Okay buddy, the Bitcoin ETF doesn't have staking either. And so like, people who are looking at the ETH ETF, they might not even be aware of staking. Like, the TradFi investor is just looking like, do I, or do I not have exposure to ETH? I don't have exposure to ETH? Let me get, go get more exposure to ETH. Like, the fact that staking isn't, is not in the current ETFs is an irrelevant detail, in my opinion.

• 31:21Ryan Sean Adams?

  Yeah, it's, you know that ETH stake rate is something like 2-3% or something like this?

• 31:26David Hoffman?

  Yeah.

• 31:26Ryan Sean Adams?

  No, no one buys a stock for 2-3% dividend, right? So like, you don't buy Apple because of its dividend. You buy it because you're like, it's, it's the future, or you're very bullish on it, like its products, and you're analyzing its cash flows and these types of reasons. Yeah, I completely agree with you there. Do you want to see an analysis that I saw on Twitter, which I thought was the best analysis for Ethereum ETF flows? This is from Trade the Flow. And he does an analysis, I'll give you kind of the bottom line here, but he basically says there's a bear case, there's a base case, and a bull case for Ethereum ETF flows. You know the bear case we've talked about, which is like 10% of what Bitcoin did from a flows perspective, okay? The base case is like 25%. The bull case is 50%.

• 32:10Ryan Sean Adams?

  So if you were to get the bear case for implied flows, you just multiply like 10% times what Bitcoin had from a flows perspective, you'd get $1.39 billion of like new flows, right? And on like the bull side of things, you'd get about $7 billion in new flows. And he goes through some analysis, and he basically assumes that, as a reasonable assumption, that ETH is about 4X more reactive than Bitcoin, just due to its market size. So he has that analysis, you get kind of a 4X amplifier effect of Ethereum, you know, like inflows relative to Bitcoin.

• 32:49Ryan Sean Adams?

  Anyway, the bottom line here is in the bear case scenario, just from these new inflows, at 10%, which is like miniscule, this is like very conservative from my perspective, you get a price of ETH of 4,400. So like we're getting close to all time highs. The bull case scenario here is 6,700. Okay, so that is above all time highs. Still, I'll grant you, not the banana zone, very, I would say, inflow conscious here, but that is only factoring in inflows. Okay, and banana zone territory is not sort of a rational inflow, back of the napkin type of calculation. It is more like, what is the reflexive trade

• 33:31Ryan Sean Adams?

  here? Once the price starts going to like, you know, all past all time highs and the headlines read Ethereum at all time highs, and like, what does that do to the markets? And you can easily see, the inflows alone get us above all time high, and then the banana zone comes with kind of the memetic reflexive effect of all of this. And that's how we get to like a 10, 15k ETH, which is like closer to, I think, Raul Paul's banana zone. And of course, you know, Bitcoin, other crypto assets map similarly to this. What do you make of this analysis?

• 34:02David Hoffman?

  This analysis, just as a, this individual actually did napkin math, maybe better than napkin math, maybe he actually did some real math. But these numbers still seem very low. Like a bull case of if Ether has 50% of the demand of the Bitcoin ETF that we see 6,700 ETH, doesn't that seem low to you? That seems pretty low to me. 700, 7 billion dollars of buy pressure from the ETH ETF, and we only get to 6,700? I think he's, I think he's being conservative. I think these numbers are conservative.

• 34:32Ryan Sean Adams?

  Yeah, I think so too, but these are just inflow numbers, right? There's other catalysts for why be bullish on Ether, like post ETF, like one primarily is, now Ethereum is no longer a security, right? No one can ever argue that it is. And so, what sort of confidence does this give institutional investors who are not just buying ETFs?

• 34:51David Hoffman?

  Who do own Bitcoin but don't buy ETH, yeah.

• 34:53Ryan Sean Adams?

  Yeah, exactly. So I think it's definitely on the conservative end of things, but that could be a catalyst for the bull market as well. All right, David, I know you were dying to talk about them, and it certainly is in the news. So what about celeb coins? We talked earlier that this bull market's boring because it's all PvP crypto insiders. And the question that we posed, and I think the market's asking is we're sort of like poking the market and asking for something to happen, is how is retail going to flood in? We talked about a few ways, maybe consumer apps, that sort of thing. We have celeb coins, though, David, all right? The fans of Iggy Azalea that now

• 35:35Ryan Sean Adams?

  have a new meme coin to partake in. And there is some like thought out there that celeb coins could actually be a catalyst for some of this retail to come onboard to crypto. So what is just going on with Iggy Azalea, the mother coin, the celeb coin, mini meta that we might be in right now?

• 35:55David Hoffman?

  Well, okay, so until further notice, until the mother coin, it does the thing that many bears think that it will, which is go to zero. Until further notice, like there is, it's worth paying attention to at the very least. If you open up the chart of the mother token,

• 36:12Ryan Sean Adams?

  Mother is Iggy Azalea's token, yes?

• 36:15David Hoffman?

  Hashtag or dollar sign mother is her ticker symbol. Is that an 88, 89 million dollar valuation? And it actually hasn't gone down. And so we're into like two, week two of the mother token. So still very early. But like, people are giving Iggy Azalea some credit. So Edgar, who is a Solana founder, DeFi founder, says, "A week ago, Iggy Azalea wasn't crypto. Since then, she's launched a meme coin, firehose information about how to authentically integrate with the broader crypto Spent 10 hours engaging live with their community, crushed Iggy's scam coins, driving through, driving the sheer velocity of the mother community, built one of the most vibrant and far-reaching communities in crypto,

• 36:59David Hoffman?

  hired a full team of devs to build natively in space, and then listed a bunch of other positive things that Iggy Azalea does, has done. And I would say this is in stark contrast to the Caitlyn Jenner token, which the Jenner token has approached zero because the way that Caitlyn Jenner is like engaging with the community is kind of just cringe.

• 37:17Ryan Sean Adams?

  Disconnected, very lazy.

• 37:19David Hoffman?

  Posting videos of like, "I'm really excited about my token, have fun trading, go get them tiger," kind of vibes. And just like not engaging, being very distant, whereas Iggy Azalea is, is sitting shoulder to shoulder with like many in the Solana community, so many, many are giving her praise. And some people are starting to speculate like, maybe this is the first celeb coin that works.

• 37:40Ryan Sean Adams?

  I can't believe this. I can't believe this. So if this tweet actually ends with something that sounds incredibly like, you know, pro-mother, pro-Iggy Azalea on this token launch. "You're watching how absolutely insane the velocity of a world-class entrepreneur can be, and you have a front row seat. This is hustle, pure and simple. One day could have been a fluke, two days could have been just your existing fame, three, four, five days of non-stop grind, now it's getting interesting." Wow, I gotta tell you, David, I really can't get in this frame of mind here.

• 38:11David Hoffman?

  I would like a few more days than grinding, than four days.

• 38:14Ryan Sean Adams?

  It's been two weeks, that is non-stop, pure hustle and grind, amazing. Yeah, world-class entrepreneur, I mean, wow, this is, this is high praise. I'm not quite ready to get behind that. I feel like we need some more time to let this one bake, but it's not Jenner coin, is at least what I'm getting from this.

• 38:33David Hoffman?

  It's something else.

• 38:35David Hoffman?

  Yeah, I mean, I would like a full unpacking and analysis of like the ownership of Iggy. She says she's hired devs to do what? Like, what do you do with your meme coin? Like, in my, in my opinion, you can't just like work on your meme coin without injecting utility into it. And then that's where I think things actually get interesting. Because that's when we start to talk about some of the things that we were talking about in like 2021, which is like bridging artists and their communities via, you know, on chain. And then that's when you like, you leave the meme coin behind. And now it's just like an actual like fan token or like community token. But like, the story is not over yet. And that I think that's like the interesting part.

• 39:18Ryan Sean Adams?

  This is Chris Berninski saying good things about Mother 2, which actually surprised me a lot. If Mother breaks into sustainable value creation, it'll also be the mother of this cycle's celebrity experimentation. So it's kind of like, it's an experiment, right? It's a great cultural experiment. What a fan token could be, I guess that's the, the bull case for it. Chris says he has no position here, but he's watching this in real time. So interesting to see Chris weigh in on this as well and to be, and to be bullish.

• 39:48David Hoffman?

  It's also worth noting that, and this is a tweet from croissant.eth. More tokens have been made in the last few months than the entire history of Ethereum. And this is actually just, just on the Ethereum ecosystem. So never mind all of the tokens that are also on Solana. But this is actually something that is an indicator of success in my mind. Never mind how like most of these tokens are like total bullshit. But that's also kind of the point is, is when we have crypto, we have a printing press for financial assets. We now have the ability for the average individual to just make a token. Whereas previously, if you ever wanted to make a financial asset, you would have to file paperwork and get approval from regulators.

• 40:27David Hoffman?

  And so this is what crypto has always been about, is giving power to the people about finances and financial assets and tokens. This is the thing that the SEC hates. It's, it's cool that we are being able to just print tokens left and right. And I think like the whole like meme coin craze on Solana is emblematic of this. Celeb coins are emblematic of this. Now there's, of course, with great power comes great responsibility. But like, to me, this is an indicator of just like the maturity of the crypto industry. Like, we want more financial assets. So we, so we can have more like resonance between what users like and what people like and the assets that they buy.

• 41:05Ryan Sean Adams?

  So are you saying you think celeb meme coins could be sort of, you know, not the future of finance, let's say, but like an onboarding tool for more retail this cycle and one that is good and is sustainable. Are you are willing to say that?

• 41:20David Hoffman?

  Not going that far. Well, because like the quality of a meme coin and it is highly dependent on like its creator and essential, a single creator that has power over a meme coin is like a lot of power and control. And I don't think the incentives are there. Because the incentive, why does a celebrity make a meme coin? To get rich. Like, that's the number one reason, which means that that's extractive out of their community. And so like in order, the only way that I see mother like materially working is like if Iggy doesn't sell, but like, why is she, why is she here then? Like, is she here for the laws? I don't think she's here for the laws.

• 42:02Ryan Sean Adams?

  Yeah.

• 42:03David Hoffman?

  But she hasn't, I don't like, we haven't, I haven't looked at on train analysis. I haven't seen anyone do any on train analysis. So we don't know who owns what or who's selling or who's not. But I don't think the incentives around celebrity meme coins are like sustainable.

• 42:16Ryan Sean Adams?

  But yeah, my take is like speculation is very different than adoption. I don't, I don't think speculation like necessarily drives adoption. And there are many cases where we've seen it drive kind of negative adoption, because think about your net promoter score, your happiness with the crypto token that you just bought in your first experience with with crypto as an Iggy fan. If you buy this thing at like a, you know, like a $1 billion market cap or something like this, and then like you, you watch it crash to 99%, like 99% down, you like lose all of your money. That is a very bad user experience for crypto. And I think that's like the base case from what we've seen historically. I'm not saying there, there won't be outliers. There's not something here, right? Maybe it's something

• 42:57Ryan Sean Adams?

  to do with like social tokens, access to like various networks or like fan tokens or something like this. But it's hard to get behind, for me personally, to get behind this manifestation of it. But this might be a hint of something broader to come. David, we've talked about so many things. How do we bookend this episode? What are the takeaways in your mind?

• 43:17David Hoffman?

  Yeah, like, why, why did we just talk about meme coins at the end of the banana zone, the ETH ETFs, China buying gold and like all of this bullish macro stuff is? We're still looking for our internal, the crypto endogenous bull market. Like, we, maybe it has always been meme coins, but I don't think so because not everyone engages in that. Whereas like the last activities of previous bull markets, the entire market was engaging in that. So we're still looking for like the thing that like gets everyone to press their buttons, to make transactions on chain, to like have demand for block space. And we haven't really seen that yet. Uh, and so that, that's why we talked about celebrity meme coins is like, okay, there's something over there. Like still skeptical, but it's something. Where is the endogenous catalyst?

• 44:02David Hoffman?

  I, I guess this could just be a completely macro, exogenously fueled bull market. But if we're going to want adoption of crypto stuff, we need something internal. We need like incentives that we built.

• 44:15Ryan Sean Adams?

  You, you know, my take, take on this too, David, is like, um, we don't even have to worry about that. They just don't overthink it would be my bookend to this and like part of the concluding take. It's very clear that we're not in the bubble yet. We are pre banana zone, right? And some people think we'll never get a banana zone, but that would be an outlier case. Like, that's not how it's happened the other three times. And what I've learned in crypto is just like fractal pattern, keep repeating, just like, almost like a, not a blind faith in it, but like at some level, a blind faith in the chart is going to spike at some point in time. And then retroactively we'll look and we'll say, it was because of this, obviously. And it was here the whole time and lying in plain sight. But maybe it's just some underlying factors like global liquidity of markets.

• 45:00Ryan Sean Adams?

  And it was just kind of like time for crypto to, uh, to pump. And so if this is the top, if this is all we have in the bull market, it will be the first time ever. So the base case is we're about to, we're pre banana zone and we're about to enter it. And it's like, I, I think the base case, not financial advice is like, this is not the time to be off size. This is the time to be in crypto, be patient, uh, plan for the banana zone. Make sure though, you're okay if that doesn't happen. Like this is not like go margin long on the whole thing. Um, because it may not happen, you know, this time could be different. But the base case plan, at least for me is we've got a good six to 18 months ahead of us. Uh, and, uh, things are going to get really exciting.

• 45:46David Hoffman?

  Yeah, there's one takeaway that you have from this episode. It's that you're in crypto to have exposure to the banana zone. And the banana zone is a small acute amount of time where you get all the gains. And if you feel like we've had the banana zone so far this bull market, we haven't. We haven't had that yet.

• 46:04Ryan Sean Adams?

  Good time as well. You're relatively sober yet because you're a little bit pre banana zone to think about your sell plan for this market as well. And it doesn't mean you sell everything, but you might want to lock in some gains as we like we enter. And now's the time to be thinking about it. Don't do your your sell plan when we're in like summertime banana zone. Bad, bad timing for that for sure. You're not going to feel like selling. Guys, we'll just end it with this. Of course, none of this has been financial advice. You could lose what you put in, but we are 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.

• 46:36David Hoffman?

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