#1548 Arthur Hayes | Bitcoin Will Hit $1 MILLION

Arthur Hayes is a crypto legend and the co-founder of the cryptocurrency exchange BitMEX. In this conversation we discuss bitcoin, global liquidity, macro environment, tariffs, US, China, UK, tokenization, yield, and where he thinks value will be created in the crypto industry.=======================Simple Mining makes Bitcoin mining simple and accessible for everyone. We offer a premium white glove hosting service, helping you maximize the profitability of Bitcoin mining. For more information on Simple Mining or to get started mining Bitcoin, visit https://www.simplemining.io/=======================Bitwise is one of the largest and fastest-growing crypto asset managers. As of December 31, 2021, the company managed over $1.3 billion across an expanding suite of investment solutions, which include the world's largest crypto index fund and other innovative products spanning Bitcoin, Ethereum, DeFi, and crypto equities. Whether you’re an individual, advisor, or institution, Bitwise provides intelligent access to crypto with your unique circumstances in mind. Visit www.bitwiseinvestments.com to learn more. Certain of the Bitwise investment products may be subject to the extreme risks associated with investing in crypto assets. Visit www.bitwiseinvestments.com/disclosures/ to learn more.=======================Pomp writes a daily letter to over 265,000+ investors about business, technology, and finance. He breaks down complex topics into easy-to-understand language while sharing opinions on various aspects of each industry. You can subscribe at https://pomp.substack.com/=======================View 10k+ open startup jobs:⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠https://dreamstartupjob.com/⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠⁠Enroll in my Crypto Academy: https://www.thecryptoacademy.io/

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

• 0:02Anthony Pompliano?

  What's up everyone, this is Anthony Pompliano. Many of you know me as Pomp. You're listening to the Pomp Podcast, which is my effort to find the most interesting people in the world and sit with them for hours while I ask questions in an effort to learn. So it would mean the world to me if you would subscribe to the show on your favorite audio platform, watch episodes on YouTube, and tell your friends and family about the podcast. My goal is to help millions learn from the world's most interesting people. So let's get into today's episode. What's going on guys? Today we've got an amazing episode with Arthur Hayes. He is a crypto legend. He has been around the game for a very long time. And so that's why it's interesting to hear his thoughts on Bitcoin, global liquidity, the macro environment, tariffs, US, China, UK. And of course, he shows his shitcoin bags. He explains where he thinks

• 0:46Anthony Pompliano?

  value is going to get created in the crypto industry. We talk about exchanges. We talk about yield. We talk about interest rate trading. And of course, we talk about things like tokenization and where he is putting his money, including what's in his portfolio today. It's a great conversation. I always enjoy talking to Arthur. This is no different. Here's my latest conversation with Arthur Hayes.

• 1:03Speaker 01

  Anthony Pompliano runs Pomp Investments. All views of him and the guests on his podcast are solely their opinions and do not reflect the opinions of Pomp Investments. You should not treat any opinion expressed by Pomp or his guests as a specific inducement to make a particular investment or follow a particular strategy, but only as an expression of his personal opinion. This podcast is for informational purposes only.

• 1:27Speaker 02

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• 2:29Anthony Pompliano?

  It's no secret that Bitcoin ETFs have taken Wall Street by storm. With over $35 billion in assets in just one year, it's become the most successful ETF launch in history. My partner Bitwise is the first and only Bitcoin ETF provider to openly publish its Bitcoin wallet addresses, allowing anyone to verify the fund's holdings. I believe this level of transparency is exactly the kind of innovation that only crypto makes possible. Bitwise is also the only ETF issuer that is a crypto specialist asset manager, meaning their team solely focuses on Bitcoin and they have the research, education, and support to help investors navigate the space with confidence. All of that is great, but what I love most about Bitwise is probably their commitment to developers. Bitwise donates 10% of their ETF's profits

• 3:13Anthony Pompliano?

  to Bitcoin open source developers. Bitcoin developers are the unson of heroes, working tirelessly to maintain, improve, and innovate the blockchain. Their efforts ensure that Bitcoin remains true to its promise as a decentralized system that is built to last. Go to bitwisepomp.com to learn more about their ETF and other services. Once again, that's bitwisepomp.com. Bitwise, P-O-M-P dot com. As always, remember investing is risky and carefully consider the extreme risks associated with crypto before you invest.

• 3:47Anthony Pompliano?

  All right, Arthur, you're the legend of Bitcoin and crypto. You also understand macro better than most people. You recently tweeted, "Chimerica, it's time to buy everything." That seems like a pretty good directive to the market. Why is it time to buy everything?

• 4:03Speaker 03

  So, I mean, obviously, we had Liberation Day and a week of financial, essentially, panic. And in the wake of that, a capitulation, not a capitulation, but a pivot from a maximalist tariff position. You know, Trump said, "Okay, 90 days and everybody except China." Bestin came on TV and said he's got treasury buybacks. I'm gonna make sure that the market's well functioning and that was the bottom of the market. And what's Bitcoin's up at like, I don't know, 35% since then, ETH up 50%. You know, pick your shitcoin, memecoin, all crushing it. NASDAQ up on the year, right? It was down 20% into early April. Now it's up 30% since the day.

• 4:44Speaker 03

  So this is the bottom is in and now we get this, you know, US and China are walking away from trying to impose tariffs on each other. And so I think sort of the meta that America is going to make itself great again, using the tool of tariffs, that's over. I think it's going to come down to capital controls. That's a longer burn issue, but you know, as it portends to risk market, just buy everything, right? The bond market threw a bit of a fit. They pivoted and we know what happens. The money gets printed.

• 5:17Anthony Pompliano?

  All right. So let's separate these two conversations. First, let's have the fun conversation, which is they're going to print money. Is this 2020, 2021 run back turbo? And literally we are just going to go into this massive economic boom. Asset prices go to the sky and anyone, as long as they just close their eyes and throw a dart, should be able to make money?

• 5:36Speaker 03

  I don't think if you close your eyes and throw a dart, you should be able to make money. I think, yes, they're going to print a lot of money because this is a global monetary transition. It's going to dwarf what we've seen so far, especially in, you know, the COVID era, which was a nutso period for financial markets. You know, Trump and co are going to print more money than Biden did during COVID. That's going to happen.

• 5:56Anthony Pompliano?

  You think so?

• 5:56Speaker 03

  Prediction. And that's how we get to Bitcoin $1 million and S and P 10,000 and gold 15,000 and all these, you know, crazy price targets that you wouldn't otherwise expect.

• 6:08Anthony Pompliano?

  Why, why do you think that they're going to print more money? Like what's going to drive that? Is that just pure stimulation of the asset price and that's what they're going to be focused on? Or is there going to be some other reason that they have for the printing of money?

• 6:20Speaker 03

  So I go back to the way I characterize sort of Trump 2.0. And this is a bipartisan thing in the United States is that they want to rectify these global imbalances that have built up since 1971, which is the US runs or more likely since 2002, when China was entering the WTO. They want to reduce the trade deficit, which has a mirror effect of reducing the capital account surplus. This is math, right? If I earn dollars by exporting things, I take those dollars and I buy treasuries, stocks and property. If I don't, if I no longer have dollars, then I'm no longer buying treasuries, stocks and property. And so if you look at the marginal driver of US exceptionalism in the stock, bond and

• 7:04Speaker 03

  property markets since the early 2000s, it is foreign capital buying stuff. And so tariffs are not politically palatable situation to rectify this. You know, people don't want to have, you know, their toy doll costs double or when they go to the store, there's nothing there because it's all was produced in China and now China for 100% tariff isn't going to send anything else to the US. That is not politically palatable. People are not going to vote Republican in 2026. And I think that message got through to Trump versus, you know, through various cabinet members, through Republican folks who need to get reelected in a year and a half, like this isn't going to work. I am, I'm going to lose if you keep up with this tariff thing. And so we saw a pivot.

• 7:46Speaker 03

  Now, I don't think Trump has sort of abandoned this idea that the demise of American manufacturing, military strength, substance abuse, all that sort of stuff, driven by the financial addition of America post gold standard. I don't think that that he's stopped having that as a campaign promise to fix that. It's just that they're going to go about it in a different way. And so you can attack this deficit at the deficit level tariffs, trade, or you can attack it at the surplus level on capital controls. And so I believe capital controls are coming to the United States in the form of some sort of mild taxation of foreign stock, bond and property holdings. And using that money. Well, because foreigners will leave because they have to pay a tax, or at least some of them,

• 8:30Speaker 03

  then they have to print money to make up the difference because they're not going to allow the stock in the bond market to fall.

• 8:34Anthony Pompliano?

  All right. So let's talk about the capital controls. What you're basically saying is they want capital domestically, inside the United States. Americans obviously have money here in America. They buy American products. They buy American stocks. They buy American real estate. They buy, you know, whatever asset. But also foreigners, you're claiming have been a huge driver of those domestic assets as well, real estate stocks, et cetera. If all of a sudden Trump starts to do certain things that disincentivizes that foreign investment, then there could be a potential lack of buying power, which could lead to a lower price, which obviously he doesn't want. And so you're saying that there will be capital controls on the foreigners or capital controls on US citizens or both?

• 9:16Speaker 03

  On foreigners.

• 9:17Anthony Pompliano?

  On foreigners. Okay. So if a foreigner has a S and P right now, and they want to sell and take their cash back to China or Finland or India or wherever, you think that they will put up some sort of barrier to allow them to do that?

• 9:30Speaker 03

  Yeah, there's some sort of tax or you could do a foreigner wealth tax. Every year you pay us 2% of the value of your, whatever your American stock bond and property is right in cash as a tax, right? And so either you let you say you stay or you leave. You choose one. We don't care because either way, either I get the tax revenue and I reduce taxes on Americans or get some sort of government handout, or the capital leaves and the currency, the other currency on the other side appreciates and I rectify my manufacturing deficit. So choose one, but it takes a bit longer. It's a little bit less direct, but you don't get the empty shelves. You don't get the goods inflation immediately, which loses you an election in 12 months.

• 10:13Anthony Pompliano?

  Let's talk about the tariffs impact. You and I probably actually disagree. We agree on a lot of stuff. We'll get to you shilling your bags and we'll see if I agree with you or not in a little bit. But when it comes to the tariffs, I think that I was standing alone on an island for a long time. I feel a little bit better now because I feel like a lot more people are starting to kind of come around to this idea. But I don't actually think the tariffs are inflationary. I agree that there are, if you put a tariff on a product coming from China. To the US, two things happen. One, someone in the supply chain has to either eat the price or the price goes up. Right now, I think both of those things happen. And so I saw a study from 2018 when we put a 20% tariff on China. That prices in America went up 4%. And what they did is they broke down and they're like, you know, there's the producer. Then there's somebody in logistics. Then there's the distributor. Then there's somebody on the American side.

• 10:58Anthony Pompliano?

  Then there's the actual retailer. And like every single step along the way, everyone was eating a little piece of this price increase. So the end consumer actually saw 4% increase. 4% is not fun, but it's not 20% either. So I think there's like some nuance there that obviously in headlines, people don't talk about. But the second thing is there's an overall economic slowdown. And I think that's the part that people kind of miss, right? It's like, from an academic standpoint, the individual price of a good should go up. If you have a tariff, it's coming from outside the United States. Obviously, they've increased it for a reason. But overall, people start to slow down. And I think that's why we saw inflation crash in America over the last couple of weeks and months. But also, it's like the spending patterns start to shift as well. Do you agree with that?

• 11:39Anthony Pompliano?

  Or do you think that maybe I am too rosy in my view of how this all works?

• 11:46Speaker 03

  Well, the 2018 US-China trade war, China basically did two things to keep their prices low. They allowed the currency to depreciate and they did massive stimulus to exporters. And they said, don't give away market share. I'm going to give you some money from the government to make sure.

• 12:03Anthony Pompliano?

  Subsidize it.

• 12:04Speaker 03

  Or subsidize it. So the impact in the American consumer wasn't that great. And I think this is what fed into the hardline maximalist tariff camp and the Trump camp. They were like, look, in 2018, we tariffed China and they ate it, right? They ate it through a currency depreciation. They ate it through fiscal stimulus. So I thought, and so I think that they thought, oh, well, that really didn't cosmetically change things. We really didn't attack this trade deficit because China ran the largest trade surplus in human history of any country ever in 2024. Right? So what did this 2018 tariff thing do? Absolutely nothing. So the problem got worse. So then, okay, well, if China's gonna eat it, then they're gonna eat it now.

• 12:46Speaker 03

  Or if it's not China, it's Japan, it's Germany, it's Taiwan, it's South Korea, whatever. They're gonna fucking eat it. We're America, blah, blah, blah, right? And I think that was the reason why. And but this, we gotta get this, we gotta start solving this problem. We were elected to solve this problem. We're gonna solve this problem. We told the people that we're gonna solve this problem. And then they went hard, right? Thirty, forty, fifty percent tariffs on all these nations. And people were like, no, no, no, that's not, you can't, you can't subsidize your way or depreciate your currency enough to not have a massive impact. Either the price is spiking in America, or we're just not gonna send you any shit anymore, because it just doesn't make any sense. So I think that's what's the difference between now and 2018, when sort of there was a tariff war, but it was a little bit different in sort of the intensity

• 13:30Speaker 03

  and sort of, I think, the underlying assumptions as to what a country will do to not pay those tariffs.

• 13:35Anthony Pompliano?

  So I don't know what's going on in the White House in terms of what they're thinking. All I can look at is what the actions are, right? The UK trade deal, and I'll put "deal" in kind of quotes, because it sounds like it's like a plan that hasn't been signed yet. But at least there's a structure, and the UK and America will say, that's our plan. What it looks like is that they've convinced the UK to take the tariff, uh, average tariff rate from like 5.5% down to like, I don't know, 1.8, 2%, whatever it is. Uh, and the US basically is going reverse. We're going from like 2% to 10% against them. And then they also have negotiated to get some products made in America that previously couldn't get into the UK market to get market access. When I see that, I think two things. One, uh, the tariff that they said they were going to levy is higher than what it actually looks like

• 14:20Anthony Pompliano?

  it's gonna end up being. So of course, the critics are gonna be like, oh, he's walking back, you know, it didn't work, the negotiate, whatever. Uh, his, uh, maybe supporters will say like, oh, but there are still tariffs in place that are higher than they were before he got in office. And so he's like increasing it on a net basis. Put aside all the politics nonsense, like who cares what they all say?

• 14:39Anthony Pompliano?

  Is that better for America to end up in a world where we get the UK tariff down a little bit? We increase the tariff on them and we get market access? Like, how do you characterize, is that a good deal, a bad deal? Or like, does it not matter because they're just gonna print money anyways?

• 14:52Speaker 03

  I mean, who gives a fuck about what the UK and America do? It's not the underwritten, underwriting of American consumption is not the United Kingdom. It's China, Japan, Germany, Taiwan, South Korea, Malaysia, Thailand. Those are the countries that matter, not the fucking United Kingdom.

• 15:07Anthony Pompliano?

  But do you think the UK deal is a framework for what the China deal will be?

• 15:12Speaker 03

  No, because there's not really a big pressure there. There was not really, you know, two countries, very good relationship between each other. There's not a big difference in capital flows or trade flows between the two. So I think it is purely for political consumption because at the end of the day, whatever, they could have chosen a hundred percent tariff rate in the UK, it still wouldn't have made a bit of difference to an American. Americans, I don't know, is there a Shein or Timu equivalent company in UK? No, that's in China, right? Young people are not buying $10 mini skirts from fucking London. It's from China, right? You're not buying your semiconductors from the United Kingdom. You're buying them from Taiwan and South Korea. So you're not buying your car from the United Kingdom either. You're buying it from China, South Korea, Taiwan, right?

• 15:57Speaker 03

  So all these countries are the ones that matter. This UK deal is purely for political consumption to say that, yes, we did a deal. It's better for us, I'm sure in some terms than it was previously. So therefore we are doing what we said, but if it was such a good deal, then why is there no deal with China? Or forget China. What about, why, why is there no deal with, say, Vietnam? Or updated deal with Thailand or Malaysia or one of these other countries that, you know, do run a much larger net surplus versus the United States are much more important in terms of manufacturing. It would be much better in terms of signaling, yes, there's a united front against China to basically be us against them.

• 16:38Speaker 03

  We're going to make sure that the Chinese can't evade these, you know, these tariffs by using these other countries to produce. But the UK is none of those. It's literally just, it's an irrelevant country.

• 16:47Anthony Pompliano?

  So what would a winning deal look like between the US and China for the United States? And what would a losing deal look like for the US in that US-China negotiation, right? Like I try to almost think of like, is there like a line? I don't know if it's a certain tariff rate. I don't know if it's a certain, you know, maybe it's full free trade, both sides drop all tariffs. Or maybe there's a market access thing or like, how do you think about if you're, you know, the sitting president for a day, you get to strike a deal with China? What does a winning deal look like that you think is actually possible?

• 17:16Speaker 03

  I guess the question is winning for who, right? Because you have to say, okay, well, for my constituents, I want to have have winning. So probably, you know, if you want to cushion the pain, there's going to be pain. It doesn't matter what the deal is, right? Because again, we're trying to rectify an imbalance that's been sort of created over the last, you know, 30 years, right? You can't do that in a week. There's going to be pain, doesn't matter what. So I think probably the best case situation, they, okay, well, we're not going to be able to reindustrialize quick enough for me not to feel some political pain as as a president. So why don't I allow China to do inward foreign direct investment into the US and build stuff? Because they can build stuff better than Americans can, faster, cheaper, more efficient, blah, blah, blah. Right?

• 18:01Speaker 03

  And so now China can sell their things from a Chinese-owned factory sitting in America. Is it an American-owned factory? No, but it's better than, you know, trying to come up with some deal that's not really going to work because either China's got to completely revamp their economic model, which they don't want to do, or America's got to pay a lot more for stuff that doesn't exist because even if you did strike a deal, a manufacturer can't build a factory in a week. So I think that's probably the easiest solution, but I don't think that's really where we're going to go.

• 18:29Anthony Pompliano?

  When you look at the tariffs, and I call it the like fear mongering, the, you know, the people who, I think at one point the S and P was down 4%. People are still talking about the Great Depression. I mean, it's just like comical. And look, stocks did go down 20%. I get it, right? You did call, I think, 74,500, you said that's the bottom, pretty damn close, if not exactly on it. How do you think Bitcoin plays into all of this? And I use Bitcoin as maybe a barometer for so much of global asset flows, liquidity, sentiment, you know, it's just kind of like it is the macro asset now. So how does this play into the chaos in chief? Like, that's part of the strategy is just create mass chaos all the time.

• 19:13Anthony Pompliano?

  But also, it seems like, you know, you have Besen, who is much more measured and like talking to the market simultaneous to Trump, who's maybe talking at the negotiating table.

• 19:24Speaker 03

  I mean Bitcoin is just the reflection of global liquidity flows and at the margin, that's the US, right? So what do we know is true about financial policy in the US? Doesn't matter what party is in power is if the bond market volatility gets to a level and that level has been empirically seen to be 135 to 140 on the move index, the policy response is immediate, like the same day. What do we have? And April 9th move was like at the 100, opened at 130, 128, whatever it was, got to 172 intraday. Jamie Dimon goes on CNBC saying tariffs are dumb in his Jamie Dimon way.

• 19:59Anthony Pompliano?

  And which is not to say, which is not to say tariffs are dumb. He just says every other word except for that. Politically correct. He says tariffs are dumb.

• 20:09Speaker 03

  And you know, there's a 90 day pause and everybody except China. Best thing gets on television a few days later on Bloomberg. It says, I've got treasury buybacks. I can, you know, don't, don't fuck with me. I've got treasury buybacks. Treasury markets sweet. My guns are loaded. Yeah. Bottom market bottoms and then we rip, right? So, and you know, what happened in September of 2022? Bond market is getting crushed. S and P downs 20%. Move was at like 140. Yellen or somebody in her staff says, okay, there's $2.5 trillion sitting at the Fed reverse repo. Let's change how we issue our bonds so that we draw that money out. And so she did more bills issuance than bonds issuance. And that sucked $2.5 trillion over, you know, two years out of the reverse repo at the Fed

• 20:53Speaker 03

  into the gold financial markets and everything ripped. Stocks, bonds, crypto, gold ripped, right? And so that this is, that is the number that we should be focusing on. That is volatility cannot be in the financial markets when you have so much leverage and everybody's running some sort of carry trade. And so that's why the authorities always step in when the volatility increases in the bond market. And because Bitcoin is literally just a reflection of how many units of fiat are there out there in the world, it goes up the most in price and that's it. It's just that simple.

• 21:25Anthony Pompliano?

  So Bitcoin went from 109 for a couple of seconds all the way down to 74, 75,000. It's ripped back to over 100. Where do we go during this cycle? Do you think we go to a million? Do we think you go to 200K? What's kind of your thought process, given that you think there's a lot of money printing on the horizon?

• 21:46Speaker 03

  So I think Trump team is very serious about trying to do their part in rectifying these imbalances. I think capital controls are the way they're going to do it, which is a little bit slower burn, but foreigners are going to react by selling assets because now there's a tax and they don't want to pay it. And so that's going to require printed money to make to replace those dollars. If the foreigners aren't going to supply the dollars to levitate treasury market and the stock market and the property market, the US government will supply it via the Fed, the Treasury and sort of legislative actions that they can do, like Fannie and Freddie being on a conservative ship or stuff like that, right? So that's all coming and that money gets printed and Bitcoin benefits the most out of all the different risky assets that one could own out there. And that's how we get to a million, one million dollar Bitcoin. I think that happens sometime between

• 22:31Speaker 03

  now and when Trump exits office in 2028. So that's sort of my goal. North Star, you know, this year I think we get to 250,000 in Bitcoin. Maybe this summer we run to something like 150 to 200,000 before we get some sort of like pullback, right? They set these 90 day targets. Obviously now you have a, you know, you have a strike price, you know, a maturity, an expiry, there's going to be insane volatility around that. Will they or won't they? What's the deal going to look like? And obviously Trump's going to posture that he's serious about really inflicting some pain on trade partners. So you could see sort of, you know, ditch the bride at the altar negotiating style where, oh yeah, I was going to do a deal, but you know, fuck you. I'm going back to maximalist tariffs,

• 23:13Speaker 03

  really get whatever he thinks he needs to get out of that negotiation. And we could see some insane volatility. Or was it July 4th for everyone except China? And then China's like August 10th, something around there. So I think now we have those dates in mind. I wouldn't really want to be long, I wouldn't want to be overly long, any risky asset, especially around the Chinese X date. Because we don't know what's going to happen. I mean, we know eventually they're going to print money and all that kind of stuff. But in the moment, if you're leveraged and you're out of your skis, that can be pretty painful for you.

• 23:43Anthony Pompliano?

  Altcoin season, you know, all your fanboys on X, I see them out there. They're telling you it's coming. Bitcoin has been crushing mostly altcoins. I don't want to leave people in tears, but what do you think? You think altcoins are going to have their day and Bitcoin dominance kind of peaks at some point and, you know, these cycles follow what we've seen in the past? Or do you think Bitcoin has just separated itself and has become something onto itself?

• 24:11Speaker 03

  No, I think Bitcoin dominance will peak. And obviously, that's really a function of ETH and Sol because of Ripple, who's the big assets. If those start outperforming like ETH has in the last week, then Bitcoin dominance mathematically falls. Does that mean that the dogshit altcoin that you own in your portfolio is going to go up? Not necessarily. I think there's going to be a new narrative. I don't know what it's going to be. There'll be a new shiny thing that we all start trading. I'll be trading it for sure. It'll be fun. If it's a coin that's already launched, I think people are getting a lot more discerning, right? We don't want a VC-backed coin with high FTV, low float. That shit is not happening, right? We want to see, if you're already launched, where are your clients? Are they paying you in money other than the token that you gave them for farming it? And then if you're making money as a protocol, where's my

• 24:55Speaker 03

  money as a token holder? I want buybacks. I want staked emissions, whatever it is. Give me, give me that profit back. This is not fucking a go-party at Bitcoin Vegas at the club with all my money situation. And so I think those coins, and there's very, very few of them, we really like EtherFi and Pendle for that, in that narrative. We're going to go back to like fundamental season, all about cash flows all the time for anything that's not new. But if you're new, cool, we'll let you get away with like all sorts of fugazi Ponzi-nomics bullshit.

• 25:26Anthony Pompliano?

  Damn, we're only a couple of minutes in, you're already showing the bags.

• 25:32Anthony Pompliano?

  We didn't even make it 20 minutes, really. All right, go ahead. What is EtherFi and Pendle? What the heck are those?

• 25:40Speaker 03

  So Pendle is basically the largest interest rate swaps trading market in crypto, right?

• 25:44Anthony Pompliano?

  All right, explain. But this is actually, this is actually, forget all the token nonsense and the trading, like, explain the actual, what's going on here? Because I do think that the macro people and people who come from traditional finance, they'll find it interesting, maybe not the coin, but what they're trying to accomplish.

• 25:59Speaker 03

  Yeah, so essentially, they want to trade interest rates embedded in crypto. How they really came into popularity was, okay, let's say that you have a token, and this token has some sort of emissions or rewards program. So you have two risks here. You have the risk of the token price, and then you have how much of the rewards are you going to get? And so the thing that Pendle really popularized was separating those two risks. So somebody gets a fixed return token, somebody gets a variable rate return token, where the variable rate is based on the emissions and what the value of those emissions are by the maturity date. And you can trade these two distinct products. And that's what really is powered Pendle, so something like, I think it's like 6 billion TV, or whatever the number is. It's high. It's one of the highest projects out there in the ecosystem.

• 26:40Speaker 03

  And so they're moving on to they want to trade now like interest rates curves. They want to trade sort of funding rates and all these different things to sort of help the fixed income side of the crypto markets mature. And I'm sure as a lot of your listeners know, that's the largest, you know, trading markets in the world, interest rate swaps and those sorts of things. So if really if Pendle is able to really dial into that and create a product that us D gens can trade and hedge with, then the sky's the limit in terms of the value they're going to create for for token holders. And that's why I really love the product. And I think the the team behind it, they're really switched on to really going after this massive opportunity to bring fixed income markets on chain and DeFi. And thankfully, the token was got pretty beat up over the last, you know, 12 months

• 27:25Speaker 03

  during this downturn and, you know, has a very attractive entry price in the last downturn, you know, we've been accumulating it. And then on the EtherFi side, they've basically, their goal was to become the American Express of crypto. Well, so what's American Express? It's a charge card for rich people. So what's EtherFi? It's a crypto neo bank for rich crypto people. So they have a nice, cool card where you can send stables, you can use your stake ETH, borrow against it, spend against it, and it's used in all Visa POS systems, and they're building a whole loan book and sort of just like a financial institution, all on chain. It's already profitable, and they are distributing revenue direct to token holders. So, you know, we're, you know, we are advisors on both products,

• 28:09Speaker 03

  we're investors in both projects, so kind of mixing in both sort of roles. But if I had to say two products that epitomize this, like, return to cash flows fundamental season, it would be those two.

• 28:18Anthony Pompliano?

  Damn, you sound like Warren Buffett. You know, you're just like,

• 28:24Anthony Pompliano?

  all right, when we were hanging in Miami, I don't think I ever asked you this, you know, you're on a little vacation. What is your best investment ever? Like, when you think of all the things you've invested in, what's the best one?

• 28:37Speaker 03

  Best investment ever?

• 28:40Anthony Pompliano?

  He's like, damn, I have so many 20,000 X's, I gotta go through them all.

• 28:46Speaker 03

  I mean, I think the one of the best trades I ever did was, you know, back in this one of 2000 and this is 2020, 2019, whatever it was, ETH sat like in $150, $200, whatever it was. And I think it was trading below the sum of all projects listed on ETH. And so like, as in terms of like market cap, and that was like, that was a 20-bagger, right? In terms of, and it put a serious amount of money into that trades. It's probably one of my better calls on crypto. And then I think in terms of like advisory situations, like Athena obviously is the best performing stablecoin in terms of price from ever, because you can't buy a tether. If you could buy a tether token that, you know, trade those revenue, then it would obviously be the number one, but Athena has just crushed it.

• 29:30Anthony Pompliano?

  All right. Bitcoin treasury companies in the public US markets, that's like all the rage. It seems like every day someone is turning one of two things, either a shit company into a Bitcoin treasury company. And it's like, you ever play video games, you know, like NCAA or Madden? And if you have a cheat code and you can just throw a Hail Mary every time and it works every time, what do you do? You throw the Hail Mary literally every play, right? That's basically, this is the public company Hail Mary that's caught 100% of the time in the end zone. If you buy Bitcoin, your stock price skyrockets. Is this sustainable? What do you think about these companies? Are you buying any of them?

• 30:07Speaker 03

  So we participated in the UPEXY deal, like the Solana treasury deal. We've done well on that. I think it's very convoluted, right? Because obviously, MicroStrategy or Strategy, whatever it's called now, that is the North Star beacon. And what Sailor was able to do, because he was the first one to do it, and, you know, he had the ability to tap a corporate bond market, is he can issue convertible debt. And in sort of a, you know, not immediately, non-dilutive fashion. But a lot of these companies now, it's just like a common stock game where, you know, you're buying a bunch of common stock at a discount, and then you hope because they claim they're going to take this money by Bitcoin, the premium to the Bitcoin NAV, you know, goes up, right? That's really what you're trading.

• 30:52Speaker 03

  And so obviously, the effectiveness of the strategy declines the more and more people you do it, so who do it. So I think, yes, it's an effective strategy for now. We're going to get to some point where people are like, okay, I get it. There's however many US listed companies that own some Bitcoin, they did some rights issue at a discount, and then the premiums are going to start declining because investors are saturated with this exposure. Because, again, if I can already buy the BlackRock ETF, why am I paying a premium to buy some like Doge company who issues a bunch of common stock and dilutes its shareholders? So I think it's a strategy that's going to work for now, and then it'll stop working. I don't know when that'll be. It's a great ride.

• 31:34Speaker 03

  So, you know, good on you for all the sponsors who are just raking in fees, doing this sort of stuff. But I think it's a very tricky situation if you're somebody who's buying one of these on the open market, because you're not really trading. You're trading two things. You're trading the premiums on AV, and you're trading Bitcoin. And so if you think you're trading Bitcoin, and not realizing what you're really trading is sort of this dilutive issuance strategy, whether or not that's going to be accretive or not to the stock price, I think you could get wrecked on these things.

• 31:59Anthony Pompliano?

  Do you think that, take strategy, just that's the biggest one. Do you think that there's a world where it could unravel? Like, it could actually lead to a huge Bitcoin bear market, or, you know, there's all these concerns, there's some leverage, although it seems like they are, you know, managing their leverage better than some others. There's these new products like MSTY that are, you know, high-yield, kind of like volatility, un volatility, un volatility, which, you know, D gens love, but also obviously introduces risk. Like, how do you just think of, you know, kind of the downside or the risk here?

• 32:29Speaker 03

  So usually, so this is obviously a leveraged trade. It will blow up in some way, shape, or form. And it might not be micro strategy that blows up, but some derivative, somebody copying them, whatever. It will blow up. I'm pretty confident in that. But it won't blow up. When people think it's going to blow up, you know, FTX blew up at the bottom of the bear market, right? So you don't blow up at the top. You don't blow up in the middle of the bear market. You blow up at the bottom of the bear market. When the volatility collapses, the interest in the asset class collapses and you have some sort of cash flow that you've got to make. And let's put in, let's just throw in some maybe, you know, some effective interest rate rises, right? This is the classic scenario for how an over leveraged company goes belly up. And so I think there will be players who play this strategy and we're

• 33:14Speaker 03

  going to probably see a raft of blowups at the bottom of whatever the next bear market is. And so if I'm thinking to myself, you know, with my crystal ball, it's, you know, very imperfect. What's going to be the signal of the next bear market bottom? It's going to be a raft of these type of treasury companies going bankrupt because the volatility collapsed and they're all no longer able to issue stock accretively. And they've got some sort of leverage, some sort of debt they've got to pay back. The price of Bitcoin is way below where they were buying it. And, you know, they've got to liquidate Bitcoin and do some other thing. And then that the game, the jig is up at that point. But that to me marks the bottom of the next bear market. And we won't get that anywhere in between. So it's a great market. It's a great signal, I think, for when it's going to be time to go really,

• 33:55Speaker 03

  really long Bitcoin again, after the next 95% correction, after the next all time high.

• 34:00Anthony Pompliano?

  Now that I know that you're like crypto Warren Buffett, you're worried about cash flows. You come from Wall Street. You really understand that world. One of the narratives that's out there is it's like the Bitcoin and crypto community versus the Wall Street crowd. I disagree. I think that Wall Street loves crypto because they are making fat fees. They are, you know, getting new clients. They are hand in hand with the crypto crowd. And they realize the shiny new toy that they can bring to their clients, their investors, whatever, means more revenue for them. Is that how you see this as well? And like, this is just the classic Wall Street found a new toy. And so they're going to like, super fuel this thing as long as they're making money along the way?

• 34:39Speaker 03

  Yeah, for sure. I think, yeah, most, these banks don't care about all the things people think they care about. They care about making money, right? Do they care about compliance? No, they don't give a fuck about compliance. Compliance is only cared about when they're not making enough money to care about it. And so now that's sort of removed as a risk, then they're going into it, right? So there are some fundamental things that could disorient you in banking, like stable coins, right? And that's why the yield-bearing stablecoin thing has been hotly debated, I think, in the US. Because, you know, as some people have rightly pointed out, if, you know, a teller is a better bank than every other bank, more profitable, better functioning, less employees, no bullshit, right? It's the best bank out there in the world. So do you want to have, do you want to allow that bank into your market? Absolutely not. So don't allow them to compete on yield with you.

• 35:22Speaker 03

  And so I think that's, you'll see banks, when you get to the fundamental function of what a cryptocurrency does, or some D5 product does, and it really conflicts with what a bank is supposed to be, then they're going to fight. But if it's, you know, listing a Ripple ETF, fuck it, yeah, let's go. Give me 7%, I'll fill out the box for you, let's go.

• 35:42Anthony Pompliano?

  With the stablecoins, it seems like maybe actually this crypto people aren't the threat, but the Facebook's adding stablecoins, you know, those may be the threats to the Visas or the MasterCards. It's like people with distribution to billions of users now getting into the payment game with this new kind of rail. That seems like that's way more important for them to pay attention to as a threat than like, hey, somebody created a stablecoin that's being pushed in some, you know, foreign market that is still maybe a billion dollars or something. Is that a fair assessment?

• 36:12Speaker 03

  Yeah, but I think the big problem with stablecoin adoption is like POS systems, right? So how are you going to get the merchant, I don't know, are they going to use an NFC-enabled phone? Or I mean, how is it going to work? I don't know. But, you know, are they going to have to get another fucking device that they've put on their shelf to like, help you pay with this stablecoin? How fast is the experience? And so I think that's the real issue. And so maybe if Facebook solves that with, you know, some sort of app, or, you know, they throw a few billion dollars into a big rollout. But otherwise, I don't really see stablecoins as, you know, eating in on to, you know, Visa, MasterCard's network payment model. Because they're not in the, they don't have the physical devices with which to affect the payments.

• 36:51Anthony Pompliano?

  You've made a couple pennies by simply thinking about ways to put on different opinions that you have as trades. If a view that you hold is that stable coins will be much bigger in the future than they are today, what would be your preferred way to invest along that thesis? Right? If you think Bitcoin is going to be bigger, you just buy Bitcoin. What are you doing? Stable coins?

• 37:10Speaker 03

  What are you doing with stable coins? I mean, Buy Athena, right? That's a token.

• 37:16Anthony Pompliano?

  Come on, man.

• 37:18Anthony Pompliano?

  You can't say the thing that you're doing. Go ahead.

• 37:22Speaker 03

  I mean, the problem is that like, okay, Tether is the best, the best example. It's not a publicly traded thing. I can't buy it. It's like, there's no token, can't buy it, right? They keep 100% of the interest margin because they've built out this massive network. So it's uninvestable. It's great for, you know, the owners, but you know, for us, other people cannot. Then you have Circle, right? Suppose they're going to do this IPO. That's a shitty business too, because their distribution arm is Brian Armstead at Coinbase. And Brian Armstead is not going to let Circle make all the money. He's going to take all the money. And they already take what 50 to 70, 75% of their net interest margin? Terrible business is what Circle has. So then, then you have all these other people who say, I'm going to list, oh, list a stable coin. And it's usually a bunch of Americans who want to target America. And America's got, you know, it's not the best,

• 38:06Speaker 03

  but Americans have dollars natively. So then they have Zelle and Cash App and, you know, pick your fucking whatever.

• 38:14Anthony Pompliano?

  They got it.

• 38:15Speaker 03

  They don't need, yeah, they'll use a digital version of cool, but like, is this going to be the next $10 billion fintech company? No. So I think it's just table stakes for existing financial institutions to further entrench their moat. But I'm not really sure that a lot of these other startups who, you know, they're going to have to spend so much money to acquire a client in a super saturated market where you're, you're not 10x better versus Venmo or Zelle or PayPal, right? Maybe you're like one and a half x better. This is not enough to get a client to switch for a price that you can afford with the capital that you have raised. So I just don't see stable coins. It's very investable in the ways in which I see people going to it, which is a US company trying to bring stable coins to Americans. Now, it's different if you're saying, I'm going

• 39:00Speaker 03

  to try to go after Tether. Again, I think that's a losing proposition, but at least you have a global client base who wants dollar banking, who is willing to pay for it.

• 39:09Anthony Pompliano?

  Let's talk about exchanges. They're centralized and decentralized. You're one of the goats of the exchange game. Who would you not want to be competing against right now? And what do you think are maybe the big winners 10 years from now when it comes to exchanges? Is it kind of crypto native firms? Is it decentralized ones? It's like NASDAQ wake up and just like we're getting in the game and you'd fear them? How do you kind of see this playing out?

• 39:32Speaker 03

  Yeah, I mean, the exchange game, I think, is going to become very commoditized, more so than it already is. So I mean, probably Coinbase just got it to the S and P 500, right? So I haven't looked at a Coinbase earnings report because I'm not a shareholder. Maybe you tell me, but I'm pretty sure the majority of their revenue comes from, you know, fees on the spot book, I would imagine, right? Is the majority of their of their revenue? And so that's not a very hard product. Any exchange or similar limited order book who's already in the U.S. can do that. And now that they can, they're going to have a lot of competition on on those clients. Especially if like a vertically integrated bank decides, okay, well, I have banking. Now I guess add this exchange portion. I've got high net worth. I've got all these different things. And I guess add this crypto thing. It's not that much of a lift technologically.

• 40:17Speaker 03

  And all of a sudden, I get to, you know, undercut Coinbase and whatever they charge. I'm not sure what they charge. I've never traded there. So I think that's a risk for the exchange space. Obviously, I'm super bullish on decentralized exchanges. I think that is the the future. Because again, the centralized exchange game, it's a perfectly competitive market where you're only competing on price. I mean, we created the perpetual swap. I haven't seen anyone else create any other product that has been differentiated from spot and perpetual swaps since 2016. That's really all the only products that we have as centralized exchanges. But the decentralized exchange is an access product, right? If you, for whatever reason, can't access the centralized exchange, here's a decentralized exchange.

• 41:01Speaker 03

  If there's a product or coin or trading strategy that the centralized exchange doesn't want you to do for whatever reason, I'll let you do it over here on the decentralized exchange. If you can't own equity or meaningful upside in the centralized exchange, I'll give that to you too in my token as the decentralized exchange. So from a retail perspective, the decentralized exchange is a better offering. At some point. Now, a lot of the times, it's still faster, more convenient to use a centralized exchange, but you know, it's hyper liquid and some of these new platforms, you can debate whether or not to decentralize or not, but to the end, customer doesn't matter. I've got a token, I participated in the upside, I believe I'm early, it's fast, it's cheap or cheaper than a centralized option, therefore I will use it.

• 41:44Anthony Pompliano?

  I'm shocked to hear that you've never used Coinbase as your trading venue. I thought you were one of the Coinbase whales.

• 41:53Anthony Pompliano?

  If you think about tokenized securities, that seems to be getting a huge lift. It was a big 2017, 2018, now it seems to be coming back. There's people who I would say have lots of kind of crypto credibility, you know, Robert Leisner and many others who are basically saying, look, we want to take these securities, we want to put them into this crypto format, we want to have them exchanged, whether it's on decentralized or decentralized exchanges, blah, blah, blah. Legit, not legit, exciting, not exciting. How do you view it?

• 42:22Speaker 03

  I mean, it's great. It's great. Let's this tokenize everything. I mean, the question for us is like, how do you actually make money as an investor, right? So usually these people are saying, yeah, we're going to tokenize everything. And guess what? Here's this protocol or company or whatever, and we're going to make a bunch of money in that. I don't think there's going to be any, any money in that. Because if you think about where the world goes, if every asset is tokenized, and I'm one of the originators of this asset, what am I? I'm literally just a fuckboy for the legal and compliance situation. So whatever country I'm operating in, I gotta fucking get rammed by these fees to issue these assets. But then they're all traded somewhere else, and anyone can spin up another exchange to

• 43:03Speaker 03

  trade them. How do I make money on this? It's perfectly competitive. And so I think the value moves up chain to whoever owns the client. You don't own the client as a securitized whatever, right? You're just a piece of technology, and that profit margin will get competed out. And if you're like, you know, a distribution giant like BlackRock, are you going to allow some little startup to take all your money, right? When you are the, the, literally the originator, you own the client. So yeah, they can tokenize and this is your media, the NIZI and Nasdaq and CME. Good for Larry Fink, but I'm not really sure how this really helps a lot of these guys out here peddling these protocols that are going to tokenize things. So yeah, it'll happen. I don't think you're going to make any money on it though.

• 43:45Anthony Pompliano?

  If there's one thing that Wall Street loves, it's yield. They find yield, it's like, you know, they struck oil, they just go all in on it.

• 43:53Anthony Pompliano?

  That seems like there's more people talking about yield on Bitcoin. There's all kinds of different ways. Some of them, hey, you like, you know, non custodial staking of your Bitcoin. And then you get like some other token. There's people who obviously are doing like rehypothecation or lending. But there's also yield in like every other coin, whether it's like actual staking revenue or some version. Is crypto just recreating Wall Street with maybe some, you know, innovations at the edge or improvements at the edge? But at the end of the day, like people need that yield. And so the hardcore Bitcoiners who have been fighting yield are going to end up, you know, kind of being washed out. And it'll end up just being the people who, who are able to figure out where to find yield or how to create yield. That that's going to be the winning strategy.

• 44:36Speaker 03

  I mean, most of the yield that you're talking about is just token emissions, right? Like yield on Bitcoin, no one is doing uncollateralized lending in Bitcoin. Or if you are, you're going to get your ass handed to you. So we've saw, we've seen that, we just lived through that in 2022, right? So like, are we really going to do that again?

• 44:52Anthony Pompliano?

  Somebody is, yeah, of course, of course, 100% somebody is. Somebody's going to show up and it's like, you know, I'm from the government, I'm here to help. And they're going to be like, hey, I'm here, I'm going to fix Bitcoin, look at this yield thing. And they're absolutely going to do it.

• 45:03Speaker 03

  Yeah.

• 45:04Anthony Pompliano?

  And they're going to get torched. By the way, they're going to do it despite getting torched online while they do it. 100%.

• 45:10Speaker 03

  Yeah. Yeah. Yield is always a thing. We always want yield, but where does yield come from? It either comes from, I'm going to lend money to somebody productive, right? That's hard to do. Origination and you know, that's what a bank does. That's what they should be doing. That's not really what they do, but yeah, a loan officer evaluates a business or a person. So here's some money and I believe you're going to pay me back in the future. Okay. That's not really what's going on in crypto yield. It's either I've got this new token. It's going up in price. Let me issue it to you. You receive this token and then you sell it before it plummets. And hopefully there's some sort of product or service that you're doing on my app that you continue doing after the token stops going up in price. And 99% of the time that doesn't happen.

• 45:51Speaker 03

  There's a handful of apps that are able to convert users into revenue paying clients outside of just taking their token emissions and then taking those, you know, that profit and yielding it back to the end holder, right? Very few projects do that, you know, pendulum etherify. That's what I talked about. Uniswap. No, they don't even do that. So like, again, so there's very few people who actually do that. It's all about a token emission game. And so it's a game of hot potato. And we're going to play the hot potato game. There'll be a different narrative on why this particular token is going to let you hold the hot potato longer than it was before. Some people make some money and then most people get wrecked because they'll apply leverage to the yield that they thought was endogenous when it comes from other factors. Sorry, zogunist from this and really just endogenous to the token price.

• 46:35Speaker 03

  And then they'll get wrecked and we'll just do those all over again, just like you said.

• 46:38Anthony Pompliano?

  So you're, you're pretty unique in that you and I could sit and have a very sophisticated conversation about interest rates and global liquidity and all that. And then you're just like a hardcore shitcoiner and everything in between, right? And sometimes at the same time, like you're talking about global liquidity and then you might throw out like some crazy coin I've never heard of before. Um, what does your portfolio look like right now? And right? And just like on a percentage basis, like how much of it is in Bitcoin versus maybe, I'll call it like top, you know, large alts versus shitcoin land where you've got a million bets and you know, hope they go up a thousand X.

• 47:09Speaker 03

  So Maelstrom, you know, probably about 60% Bitcoin, 20% ETH. And I'd say, and then the rest are, you know, we do some liquid trading, so tend to re-etherfi type stuff. And then we have a lot of allocations on term sheets, right? So, you know, we were just receiving tokens periodically from either investments or advisory deals that we've done. And that's the last part of our portfolio. But the majority is Bitcoin. The goal is trade shitcoins and make Bitcoin, right? So at the end of the day, I take the profits, pay all the bonuses, and I buy more Bitcoin. And that's, that's the goal of the fund.

• 47:47Anthony Pompliano?

  ETH is 20%, not Solana. I think that maybe you should have been in Solana for the last year or so, but maybe you think that something different is going to happen in the future? How do you look at Ethereum versus Solana today? And then also where they're both going?

• 48:01Speaker 03

  Yeah, of course, you know, everyone wants to be like, should have would have cut a $7 Solana. You wish you would have sold everything and bought Solana, right? But like, again, whenever you think about it like that, I'm not that kind of investor. I'm not trying to hit 100x trade. If I had a, you know, a 2x trade, or if I make 10% on the stash of my funds, pays for my lifestyle. I don't, I'm about capital preservation rather than capital appreciation, because I have enough capital already.

• 48:27Anthony Pompliano?

  Yeah, we get it. Yeah, you're rich.

• 48:29Speaker 03

  So like, but if you're like trying to hit 100x, you know, fucking homers every day, then yeah, you should have been in Solana. You should have been hyperlipid, hyperlipid at $3 when it launched, right? You should have been in all these different things. But then you're gonna have to trade on the risk curve and be looking at your phone 24/7 and all that kind of stuff. So, yeah, I made a good trade on ETH. I've been long ETH for many years. I still think that ETH is gonna have, have its run. Will it have performed better than if I had bought Solana at $7? Probably not. But that's a trade I would never would have done anyways.

• 49:00Anthony Pompliano?

  And then what about like, um, I think the last like major uh kind of theme that we saw, you know, obviously the NFTs all stuff last cycle, we saw AI coins had a run kind of end of last year, uh, maybe beginning of this year. How do you look at something like that? And then are there other themes that you're paying attention to in crypto, which I always say like a crypto theme could be two weeks, right? I mean, like people get hot on something and it's gone, it's gone very quickly, but like what, what else uh are you paying attention to right now?

• 49:27Speaker 03

  Yeah. So I mean, AI, I think we're just really early. We don't know how we're going to make money in LLMs or AGI or whatever the fuck AI uh happens. And so, yeah, I think this, this, the AI versus crypto, we had a little bit of a, you know, spike in interest, some things did well. And then it's like, oh, well, you know, do we actually make money? Do people actually use these LLMs like we thought they would? And then kind of like stuff crashed. So it's gonna happen, but it, there'll be a new meta this cycle, some sort of AI crypto intersection. I don't know what that's gonna be. We'll try to get on it early, make some money and get out. Um, but I think it's TBD on how you're actually going to make money in AI. And then I think we were speaking before the show about like something that we're

• 50:11Speaker 03

  really interesting, well, we're doing it right now at Maelstrom is, you know, a big theme that we see is sort of the VC model is broken in crypto from both sides. So from the VC side, they've raised a bunch of money, right? Take your, you know, Paradigms, your Pantera's and these kind of guys, they've got what hundreds of millions, billions of dollars and they can't deploy it. No, my guys are in the trenches doing deals. We don't see these guys, right? They can't, they can't deploy a hundred thousand dollar check. Doesn't, you just can't. You got hard, you know, have a billion dollars of money that you gotta deploy. But if you want to talk about how you're gonna make a hundred X on a token, that's where you need to be playing. So they just can't do it. They have too much money. It's too hard, too many deals. And so what do they end up doing? They end up doing the bearer chains

• 50:52Speaker 03

  of the world and the Monats, right? It's uh the high, the big coins that can plunk 50 bucks in one of those things. Uh, but then because of the pressures from these, you know, VCs to get that, the FTV up, so they have someone to dump on, the retail is like, I don't want that shit anymore, right? And so we've seen these things go down only and, you know, it's a shitty looking chart. No one's really interested in it. Then when they, when these things unlocked, then it's just like, how do you fucking make money? Because everyone's just dumping on you every single day. And so then people are like, oh, I want the hyper liquids. I want these real teams who build something. Didn't raise any outside capital and went for it. So the VCs got a lot of money. They got to do crypto,

• 51:33Speaker 03

  but there's nothing they can buy. On the other side, obviously, pre-Trump, we had the SPAC boom and all these guys listed all these SPACs and then the SEC shut the gates and said, we're not going to approve any more DSPACs. Now, obviously, that's changed. And so you have billions of dollars of capital sitting there who need to find a company, as you said, sort of these, anything with crypto on it is doing really, really well in the public markets. The David Bailey's Nakamoto thing fucking crushed it. That's the most recent deal. And so I think that SPAC sponsors are going to want to find a crypto thing to really just juice the market. So where we come in as a maelstrom and we've actually hired someone to help us build this out is, okay, can we go and find crypto

• 52:17Speaker 03

  companies that have no token, have cash flow, have profitability, and don't really understand the public markets that much? Can we go to those companies, raise some money, buy them out, change management, clean up the books a bit, present it in a structure that makes sense for one of these SPAC sponsors, then offload it in the public markets and do it over and over again? And so we were evaluating a few companies right now. And I think that's where we're going to make a lot of money over the next two years, because even when we think about the VC landscape, Akshat and the guys, they're very slow. We haven't really done that many deals this year. Everything's too expensive. There's not really any new ideas. But we have a new spigot of capital market funds that wants to do crypto. So might as well, as Chuck Prince said, former CFO

• 53:01Speaker 03

  of Citigroup, if the music's playing, I'm dancing. And so that's what we're doing.

• 53:07Anthony Pompliano?

  It does feel like crypto generally is assaulting Wall Street. But to my point earlier, Wall Street's helping them do it. Like, they opened the gates and they said, hey, come on in. Like, it's like barbarians at the gate, except for like, we're not on opposite sides. Like, let's all run in together. And it probably ends poorly somewhere. Like, nobody knows how, when, why, whatever, right? But like, something will happen for sure. If there's one thing that we are great at, it is like creating bubbles. And then we are experts at popping them ourselves. And so I'm sure that will happen here. When you think about the President of the United States, the current administration, they are by far the most pro Bitcoin politicians that we've seen, definitely in the United States.

• 53:50Anthony Pompliano?

  Could that work against us? Like, if the next administration comes in, could they be like, oh, that last guy, he was, you know, pro, so I'm going to be anti. And like, I could still become the president or a cabinet member or something like that? Or do you think we're like past that point? We're now regardless of which political party, which candidate's in office, like, America will now be pro Bitcoin? And because America's pro Bitcoin, every other country will kind of get in line and follow?

• 54:10Speaker 03

  No, I don't think that's a given. And so I think a lot of people in crypto are being very short sighted. And the people that they support representing the industry in these closed or meetings or expensive dinners or what have you, and the types of policies that they as clients are implicitly supporting. So, again, I've been on record saying this. I've written a bunch of essays about it. And essentially, my view is if you want to, if your goal is to create America as the strongest place in crypto in the world, again, you can debate whether that's a good goal or not, then there's historical precedence for how to do it. How do you do it? How did big tech do it? 1996 communications bill, they put it in a rider that basically said, what happens on the platform is not the responsibility of the platform operator.

• 54:54Speaker 03

  So they allowed these ad tech platforms, these social media platforms, these search platforms to permissionlessly innovate and create the web two infrastructure that we know today. And obviously Silicon Valley has grossly benefited the financial position of the United States. So, and that's a Republican and a Democrat thing. They're not going after Zuck and, you know, the Google eyes and Microsoft and all these guys, right? Doesn't matter which administration in power, America is wedded to the tech. So if you want to have something similar, then instead of, you know, talking about the stablecoin bill or the market infrastructure bill or whatever other bill, and you send Brian Armstrong and Garland House up to the White House to go basically make the best deal for their company, there's nothing to do about what's good for the ordinary crypto holder.

• 55:39Speaker 03

  And where are you going to get more of the same? A gobbledygook piece of legislation with all these rules and regulations that only benefit companies that have enough money to pay a lawyer to decipher them for you. And yes, it's better than it was under another administration, but those laws can be changed a lot easier than something simple that says, okay, Bitcoin and crypto are untouchable as long as you don't steal or defraud people. There are no regulations. So if you're a developer and talented from Eastern Europe or wherever, and you're getting persecuted at home because you believe in freedom and privacy and all these things, come to America, build that app. We have great capital markets now that tokens are a thing. You can list your token, no issue on some sort of decentralized exchange. People can buy them. You can get rich. And what do you do?

• 56:24Speaker 03

  You buy a car, you buy a house, you go to the fancy restaurant, you pay the state taxes, you pay the federal taxes. And that's how you create a real ecosystem that's unassailable from whichever political parties in power. But I can guarantee you that if all that we're doing is sending Brian Armstrong and Garland House to the White House to negotiate the best deal for Coinbase and Ripple shareholders, then that will be reversed in an administration that doesn't view sort of favorably on crypto. And then it's really the fault of the American voters who supported these guys for not really pushing for things that actually are going to change things and just going for more of the same. So I think that's my view on, you know, regulation and, you know, how it fits in this sort of like, you know, pro crypto American whatever. And Trump doesn't care, right? At the end of the day, he's about winning.

• 57:06Speaker 03

  So if going with, you know, the corporatist strategy for crypto wins him the election or, you know, reelection or midterms, whatever, gives a campaign donation, he'll do that. If supporting permissionless innovation gets into the same place, he'll support that as well. So really it's up to, you know, crypto holes in America to make their voice heard and not just rely on these people who just want to get their stock price to go up. And again, I'm not throwing shade on like Garland House or Armstrong, they're doing what they should do as stewards of capital of their corporations and funds and whatnot.

• 57:38Anthony Pompliano?

  Yeah, I think that they're, um, I've talked to, actually, uh, I think both of them about some similar things. And I think both of them would argue that they're doing what's good for their company, but also what's good for their company is good for most companies in the industry. And obviously there's debate as to whether, you know, people agree with that or not.

• 57:55Anthony Pompliano?

  But I think maybe the part where I will be sympathetic to them and other people who are going and engaging is like, we tried to like, let's not engage. That did not go so well, right? So like, we

• 58:04Speaker 03

  I'm not saying that. I'm not saying don't engage. I'm saying engage in a way that gets you the thing that

• 58:09Anthony Pompliano?

  Correct.

• 58:09Speaker 03

  Creates a lasting

• 58:11Anthony Pompliano?

  Yeah, I think everyone agrees that not engaging is a bad strategy because we saw how that played out. Now it's a question of if we are going to engage, like, what are we ultimately optimizing for? And I think that there's like, uh, some degree of variation between, uh, individual companies, permissionless decentralized things and like, you know, some stuff in between. Um, but I think maybe the, the only thing that is consensus in crypto is like, we got to engage because it goes very poorly when we just let, you know, people who have no clue what they're doing start to legislate this stuff.

• 58:41Speaker 03

  Well, I mean, I don't think that people didn't engage. It's just they didn't have enough money behind them for them to be taken seriously, right? Well, you know, if we saw how that worked in, you know, all the political action committees in the US, they raised a bunch of money and they got, you know, they got what they paid for.

• 58:53Anthony Pompliano?

  Yeah. Um, what do you think about the Trump coin?

• 58:58Speaker 03

  Genius. I think it was great.

• 59:01Anthony Pompliano?

  All right.

• 59:01Speaker 03

  I don't care that it went down 95% in price. Like, I, I look at it in a long-term thing. Okay. Well, if we have the most powerful politician in the world who has essentially done his own personal meme coin, we could have other people do the same thing. And, you know, other politicians can launch a meme coin. And that's good because it's a more transparent way to judge popularity than the current things that we have going on.

• 59:24Anthony Pompliano?

  So right now, the Trump coin is trading at market cap of 2.76 billion, fully diluted at like just below 14 billion. Um, do you think that that is, uh, inspiration is a weird word, but like people who have these big followers, do we get a whole like celebrity coin season again, once, uh, once they sort of see these things going up?

• 59:48Speaker 03

  Yeah, for sure. Uh, I think the problem is a lot of celebrities align themselves with the wrong people and they end up rugging their followers, like, um, the hot tour girl and that's just

• 59:59Anthony Pompliano?

  She disappeared, but even she, she disappeared as fast as she showed up. I mean, that was crazy. She was out.

• 1:00:07Anthony Pompliano?

  I saw somebody, I saw somebody on, uh, X, I think they said something like, uh, most people get 15 minutes of fame. She only got nine. Like she was, she was out.

• 1:00:16Speaker 03

  So yeah, it's tough, right? So I don't know. I think the celebrity coins are tough because I think usually celebrities have a lot of the boys or the girls around them. They might not be the most financially astute, but they're very loyal and you're going to get all sorts of, you know, bad individuals advising them how to do these things and then you get rugs. And so, yeah, there'll be some celebrity coins. Do I think they're going to do well? Probably not, just because I think that the incentives are not really there for these celebrities to do it the right way.

• 1:00:48Anthony Pompliano?

  All right. My last question for you is, um, there's a weird shift going on in the world. All like in the traditional like finance world and private equities, their whole pitch is like, the boomers are going to pass trillions of dollars down to the young people. That means they're going to sell their businesses, you know, whatever, uh, maybe, maybe not. I don't know. Um, but there's a lot of crypto people who are pretty young, who made a lot of money and a lot of money is all relative, right? I know people who made billions. I know people who made hundreds of millions. I know people who made tens of thousands and that's a lot for them, their families, whatever. Um, how does that like change the world though? Right? Like, um, if we got a bunch of, I don't know, people under the age of 50, running around with billions, hundreds of millions of dollars that maybe otherwise wouldn't have had it. Uh, if they didn't participate in crypto, is that net positive, net negative, does not matter? That's just how the world works?

• 1:01:34Speaker 03

  I think it's, it's a preference thing, right? So the boomers sell everything down to the next generations with money. Well, if the next generations with money don't have a lot of kids, you know, this is not just an American thing. This is, you know, all over the developed world, even in China, right? They don't have kids. They're optimizing for experiences or other goods. Why do I want to own your house out in the fucking suburbs? Why do I want to, why do I want to own your portfolio of stocks or bonds? So I think there might be a preference shift in, or your boomer art that hangs on the wall. I want some, I want a doodle or whatever, a punk crypto punk, whatever. You can debate whether it's art or not, it doesn't matter.

• 1:02:15Speaker 03

  So there's this whole wealthy cohort that has a different value set from their parents and has gone on a different life track where they're not just popping out three kids, have a family, and then they need a bigger house, right? So of course they need to buy the one that the boomers selling. Well, they're living in the city, taking the metro, have no kids, going to Burning Man, that's their life. What, you know, do they want the same thing as the boomers? So I think there might be this big dichotomy in terms of a value set of, you know, boomers who are wealthy trying to sell stuff that nobody wants who are younger than them. And that could become very politically caustic because then you have this sort of generational warfare of, oh, well, I've got to fund this retirement and this sick care that I've got

• 1:02:59Speaker 03

  to pay for, but, you know, the people younger than me don't want any of this stuff. And so then, well, then what happens? Do we tax everybody more to pay for the healthcare of the boomers because they can't sell any assets? Well, that's not really a winning strategy if everyone below you says, fuck that, I don't want to fund that. So I think we're going to have some interesting generational conflict around the world because the value set of the younger generation is much more diametrically opposed to those older than them than has ever been in human history.

• 1:03:27Anthony Pompliano?

  Where do we want us to send people? Either for this buyout machine you got going on, your shitcoin portfolio, or your views on Bitcoin and macro?

• 1:03:38Speaker 03

  Well, you can come check us out on Twitter, at CryptoHaze, CryptoHaze on Substack, and we'll let you know if you're relevant for the Baal Fund, you know who you are.

• 1:03:50Anthony Pompliano?

  As much as you screw around on the internet, the writing is very good. Obviously, you know this, I've told you before. The essays are not 100% right, but more right than wrong, which is actually all you can ask for, right? And they are 100% entertaining, which if you're looking for entertainment, for sure you got to read it. And so I appreciate taking the time to do this, and we'll do it again in the future.

• 1:04:13Speaker 03

  Awesome, thanks, man. See you in Bitcoin Vegas, hopefully.