Transcription
This morning, we were talking about Deep Seek. Deep Seek was created by a hedge fund bro in Hongo. The Chinese government does not like hedge funds. Those in the Chinese Communist Party would not pick a bunch of hedge fund guys as the conduit for how they're going to develop the AI that's going to defeat America.
The Trump election in the United States, you know, make America great again, print a bunch of money, get companies to invest in American productive capacity, do lots of things in the crypto space, tax space—everything is going to be amazing.
Uh, in the world. So Trump has a choice, I believe.
[Music]
I'm Scott Mker, host of The Wolf of All Streets podcast, here with Arthur Haye, CIO of Melstrom, to talk about the crypto market, politics, and everything that's driving prices right now.
You set the world on fire once again with some price predictions, right? We got 250,000 by the end of the cycle, but we got to go to 70s first, right? At least my prediction. You know, could be wrong. I hope I'm wrong.
W, I hope you're right about the 250, maybe wrong about the 75. But that said, you know, with a long time frame in mind, who wouldn't want to buy Bitcoin at 75,000 if it's headed to 250?
Yeah, for sure. So what's the premise? Why do you think that we're likely headed down before we see sort of the cycle kick in and head to the bull market highs?
So I released an essay about two days ago, and then, you know, if you want to read a 5,000-page description of what I'm going to describe in 15 minutes, then go right ahead. It's a little bit more detailed.
But essentially, my premise is that post the Trump election in the United States, Bitcoin has traded ahead of the fundamentals in terms of global liquidity. So he gets elected, he has this whole platform of how he's going to, you know, make America great again, print a bunch of money, get companies to invest in American productive capacity, do lots of things in the crypto space, tax space—everything is going to be amazing in Trump World.
And everybody else around the world, to compete with America, is going to have to print money as well to help their own domestic industries, like in China and all those other countries.
Unfortunately, it seems like the liquidity situation is disappointing.
So moving over to the U.S., obviously, the 10-year treasury has, you know, been on a tear—price down, yield up since the Fed started cutting rates in September of last year.
And if you'll remember, it was quite interesting that the Fed started cutting rates right in the fall, right before an election cycle—probably to help Harris win. Obviously, she didn't.
As soon as Trump gets elected, you know, Powell's like, "Oh, I'm not resigning." There have been various former Fed governors, William Dudley to be specific, who wrote a very provocative op-ed in Bloomberg a few years ago stating how the Fed should actively use its power of influencing quantity of money and price to make sure that Donald Trump doesn't get elected.
He was the president of the New York Fed, the most powerful Fed governor bar the chairperson for many years, so he definitely still has some influence.
At a recent press conference in November, right after the Trump election, Powell was asked, "Oh, like, you know, has anything changed because of the election?"
He stated that, "Oh, we're looking at some new super secret economic variables that might influence the trajectory of our path," which is code words for saying, "Oh, well, maybe we slow down, maybe we start raising rates because of the election."
So I think as much as Powell tries to play the "I'm not a political person" game, he's very political. He and Trump don't like each other. Trump obviously is blasting him over Bloomberg and, you know, the news wires saying, "Cut the money! I need, you know, cheap money and lots of money to revitalize American industry."
And Powell's saying, "Oh no, I'm here to fight inflation." So obviously, inflation is still above their target.
So if they were going strictly by their own self-imposed measures, they shouldn't be cutting rates at all and should be raising them.
On the other hand, you have a federal deficit that's exploding higher. I know people like to cite the Department of Government Efficiency, the meme department that isn't a department at all. It's literally just an advisory position that Trump created for his boy Elon.
You know, an actual department requires U.S. Congressional approval, and that hasn't happened yet. I have to say it won't, but you know, Doge is literally just an advisory body. It has no power.
Yes, Elon can modify, you know, profile government spending as much as he wants, but that's not new news. I don't think politicians particularly care.
And if you're going to get re-elected in 2026, are you going to go against your seniors and the defense industry and cut their spending? Which is the major, you know, 70% of government spending in the U.S. is healthcare and defense. Those aren't getting cut, in my opinion.
So, you know, the deficit isn't going anywhere. You have an antagonistic Fed. You have a treasury maturity profile that's completely up because the U.S. has to roll over something like $6 trillion of short-term debt at higher rates this year because Yellen wanted to juice the markets for Biden and Harris during their term.
And so you have all this coming together, and you have a debt ceiling issue where, whether it's today or tomorrow, I don't know when the day is, the U.S. government cannot net issue any new debt to fund the government.
And so Trump has a choice, I believe. He can either have a crisis happen today or, you know, in the near future, 3 to 6 months, in terms of, you know, an antagonistic Fed, a treasury maturity profile that is not commensurate with affordability for the government and its programs, and the inability of the banking system to buy more of this debt.
The trigger for sort of, you know, a little mini financial crisis could be, "Okay, I'm not going to tell Bessent, you know, the new U.S. Treasury Secretary, that he should not run down the checking account of the government to help for all the government shutdown. Let's have this debt ceiling fight today."
Every time there's a debt ceiling fight, everyone gets all up in arms. People get afraid that the U.S. government's not going to, you know, pay out on its bonds, which is ridiculous. Of course, they're going to raise it. It's just a political game, and it depends on which particular Congress person or Senator gets their piece of pork for their district.
And so once they work all that stuff out, you know, it'll get raised. The question is, what happens in the interim? Do we get sort of a liquidity flush out?
Get the Fed seeing religion again? You need to print money. You need to allow the banks to put as many treasuries on their balance sheet as possible to help Trump and Bess enact their campaign promises.
Stop being an um, the financial system. The American empire was going to crumble unless you give us the free money.
So that's sort of my premise on the American side of things of why I think it's politically expedient for Trump to have the bad thing happen right now when he can blame it on Biden and Harris.
Why have it happen in six months' time? Earlier the better. It's your problem, no question. If there's going to be a recession, a correction, whatever it is, the earlier in the presidency, the better.
Because obviously, it'll be long forgotten by the time people are casting votes.
So basically, though, the premise here is that Bitcoin will dip as a function of the stock market correcting and everything else that's happening in the macro situation.
I mean, we haven't had a meaningful stock market correction as long as I can remember, right? So if that doesn't happen, you would assume that Bitcoin would continue up.
This also sort of speaks to a conversation about that you alluded to, which is that the Fed cut rates and interest rates ended up rising, which means obviously the market is saying that the Fed was wrong. They shouldn't have probably cut in the first place if unemployment was low and the stock market was at record highs.
So are they trapped? And does what the Fed do matter as much anymore, or is it really about best in the treasury now? Are we in a period of fiscal domination here where it's really about the debt ceiling and bonds?
I think, yeah, the Fed is absolutely trapped, but they still have some operational things they can do to make it better.
The biggest thing, and you know, if you've been reading sort of the mainstream financial press, you've seen it talk about a supplemental leverage ratio and Basel 3, which is basically, "Hey, the U.S. caused this financial crisis in 2008 because the banks are a bunch of idiots, maybe criminals, whatever."
And the global banking regulators got together and said, "Okay, let's have the banks put more capital on their balance sheet against the thing that they buy." That kind of makes a little bit of sense.
However, when you have the federal deficit, oh no, marketable treasury debt has almost doubled in the last five years. The banks can no longer warehouse as much of this debt as they used to.
They can't facilitate the operations of a treasury market at almost $40 trillion of public marketable debt. What they need is the ability to buy treasuries with infinite leverage, which they can do if the SLR exemption is granted.
This was granted during COVID for a year, and the banks were able to hoover up a bunch of treasuries. They obviously got because then Powell raised rates, and a bunch of them went bankrupt, and they had to enact the bank term funding program.
But in any case, this is a completely unilateral Fed decision. They can decide to suspend this particular provision of Basel 3, and the banks can buy as many treasuries as they want with infinite leverage.
And presto, you have a buyer with infinite resources to fund Bessent and Trump's plans.
And it literally is just a decision by the Fed. The Fed can also stop quantitative tightening, which is also constraining banks' balance sheets and the amount of treasuries that they can hold.
And it can restart quantitative easing. These are all things that the banking system is calling for. They release a quarterly report to the treasury called the Treasury Borrow Advisory Committee report.
I think the next one comes out in early February, and they hammer home the points of all these things that I'm saying: our balance sheets are full, we can't buy treasuries, we can't help you do with all these government programs.
Please change these minutiae in the banking regulations so that we can perform our function and make America great again.
But again, this is all up to the Fed, and I think Trump needs to bring Powell on side with a little bit of um, crisis.
In other words, the Fed needs cover to cut, and that cover comes with a stock market correction and Bitcoin flying down into the 70,000.
Say, "Hey, we had to cut, man. We got our correction. Unemployment will go tick up, magic, a couple, you know, a couple basis points before they, you know, revise that data in three months and don't tell you about it, and we get our cuts."
Right, basically, yeah. So it's all about liquidity. I mean, the bottom line of that entire thing is that Bitcoin, in your opinion, is trading based on global liquidity or certainly what's happening with the Fed and the treasury in the United States and how much free money is in the system.
Yeah, and I guess, and I also would add that China was supposedly deflating their economy, is going to be printing trillions of Yuan to help their property market and asset markets as well.
They were going to allow their currency to weaken. That's what happened from September of last year up until early January this year.
And for whatever reason, there's lots of speculation as to why, I don't know why, Xi Jinping put the stops on that.
The PBOC is no longer injecting, buying government bonds, and they now are strengthening the currency, which is negative for fiat liquidity globally.
So there you have the number two or number one largest emitter of fiat liquidity stopping in his tracks before they negotiate with Trump in terms of what the economic situation between the U.S. and China is going to look like.
And then the last piece would be the Bank of Japan has raised rates 25 basis points at their meeting last week.
Again, Yen is the premier funding currency of all financial assets. And so if you raise the price of Yen money and the currency appreciates, people have to sell stuff.
What do they sell? They sell U.S. tech stocks, and they sell U.S. treasuries.
So the largest three economic blocks in countries with regards to fiat liquidity are all either slowing down the pace of addition of liquidity, raising the price of money, or outright contracting the amount of money in circulation.
So I think for a very short period of time, we have a perfect storm of, okay, Bitcoin went from 70,000 to zero in, you know, two and a half months based on, uh, Trump.
You know, maybe he delivers these things in the back end, but right now, where's the money?
And so that's why I think that we could have a meaningful correction, shake out some people, cause people to not believe in this bull market.
And then that's when we get the free money printed, money printed, go burr, and we, you know, resume the bull market and go much higher.
Yeah, I continued saying leading up to the election that Bitcoin was basically priced to perfection for Trump to deliver every single thing that he had promised.
And that any delay on those or any strange wording in the bills, which we've seen, right? An executive order that many expected would be a Bitcoin, you know, strategic reserve ended up being a digital asset stockpile, which sent the world on fire because it's, you know, purposely vague.
I think so now we need to see these promises coming through for Bitcoin to continue up, I think in the short term, or to see a catalyst.
So on the flip side, I heard an interesting take from Jeff Parket at Bitwise in a conversation I had with him this morning.
We were talking about Deep Seek and the situation with AI. Obviously, we saw this knee-jerk reaction in, you know, the United States stock market when Deep Seek apparently developed a better AI model for $6 million than we did for hundreds of billions of dollars.
It was an interesting take, though. He said that effectively he thought that China was exporting their deflation to the United States and that that could become largely problematic for us.
I mean, what do you think of that premise in the context of, you know, Xi Jinping not coming through with all of the liquidity as you discussed?
Do you think that potentially having this sort of inflationary technology coming and repricing of our tech could that be the catalyst that sort of starts this correction?
I think Deep Seek came out on the 20th of January. I didn't really hear anything about it until this weekend.
You hear all the essays, people start freaking out, and then you get, you know, Nvidia down 17% on Monday.
You know, people in turmoil. And so I think the—and obviously there's two camps. There's one camp that says, "Oh, this is just fake. China just doing China things. You know, it's fake, you know, propaganda, blah, blah, blah."
And to counter that, I listened to an interesting short webinar yesterday from Gav Research. They're out of Hong Kong, a very good China research team.
And one of the partners made a very interesting point. It's like, you know, in China, does propaganda and sort of corporate sort of unreal? It's usually the Tencent, Alibaba, the standard guys receive lots of government funding, or it's the university, the Tsinghua or somewhere like that, the premier Chinese research institutions who receive, again, lots of money to research this kind of stuff.
Or it be sort of a local government-funded startup that's, you know, either doing, uh, trying to build new chips or something else.
But Deep Seek was created by a hedge fund bro in Hongo. And, you know, I don't know, obviously most of your listeners are from America. I've lived half my life in Greater China.
The Chinese government does not like hedge funds, and they don't like financial markets to the extent that it impinges on their ability to have social harmony amongst the rest of the people.
So, you know, Xi Jinping or those in the Chinese Communist Party would not pick a bunch of hedge fund guys as the conduit for how they're going to develop the AI that's going to defeat America.
So I take this take that as a granted. I think it's legit. I think they actually did build this thing very, very cheaply.
They didn't have a lot of government support because they're not the type of people who would get government support. Now, I'm sure now they're going to get lots of support once they've done it, but that's not the point.
And so if you think about it, whether it's five or even if they did it for 1 million, it's still so much less than the hundreds of billions that Microsoft and all these sorts of companies have spent on, you know, nuclear reactors, NRG gas power plants.
You have Masayoshi Son and all these guys putting up half a trillion into Stargate. So like even if you 10x or 100x the amount of money that it cost them to build this model, it still completely destroys this narrative that the more you spend, the better your AI is.
And therefore, because we have the most capital, then we will have the best AI. So I think that's the mental thing that people are wringing with.
And so if you say, "Oh, this is just fake China," then why is Nvidia down 17%? Obviously, people already have this inkling of a thought in their mind, which is, "Hey, should I be buying this company at like 10 to 20 times earnings, and they have a 90% profit margin?"
Even if, like, how normal is that? Surely, like in any industry in the world, that doesn't last.
Even if China is lying through their teeth or whoever the Deep Seek finder is, like, so I think that people already know the answer to the question, which is if it's not China, it's somebody else.
They were questioning the, "If I spend more, I get a better product." And I know a lot of people have been throwing out Jin's paradox, which is you use more of the resource as it becomes cheaper, but that doesn't mean that a tech company gets to have a 90% gross profit margin.
So I think people are confusing their metaphors here, and I think this is sort of a wake-up call for why do I own these really, really expensive stocks and this really, really expensive country market, the United States?
Maybe I should diversify. And you know, what you saw on the wipeout on Monday was, you know, something like 300 companies in the S&P were up on the day—small cap map companies—which is, you know, this rotation from, okay, big tech, which has these sub, you know, really abnormal profit margins, and all these little companies that are kind of, "Well, maybe the little guy, whether it's Chinese or American or European, whatever, has a chance now."
If I don't need to spend, you know, a hundred billion dollars to build AI, I can spend five million. I can use, you know, Deep Seek or another variant of this open-source model because they open-sourced the weights and all these other things.
And so I think that that's going to cause a—um, we're just at the beginning of this. If this is really a thing, it's not over in one day. It sort of percolates in people's minds.
You have them cope harder on, you know, "Oh no, it's just China. Oh no, yeah, you know, they'll just order more chips." Jin's Paradox—that's just coping.
I think we start trending down. I think this is going to be a catalyst for a mental shift in terms of how people think about, you know, open source versus closed source, big tech versus value stocks, and start this rotation into a different sort of company that's being successful, whether it's in the United States or abroad.
We've had this situation quite a few times, actually, with people sort of positing that if Nvidia got a correction, it would crash the entire market because of its size.
But actually, as you sort of alluded to, the last few times we've gotten those 10% plus sort of overnight corrections on Nvidia, that money's just flowed elsewhere. It hasn't left the market, right?
The first time, a few months ago, then we saw, I believe, Meta and Amazon and Alphabet make new all-time highs sort of as a rotation.
But now we've multiple times seen that rotation into smaller companies like the Russell, and what you said, 300 of those companies being up on the day kind of echoes the crypto cycle where you tend to see Bitcoin make a move, and then some of the liquidity flows into altcoins.
But it hasn't happened as much yet this time. So I do want to talk about the crypto cycle.
We talked about Bitcoin going to 75 and then rising to 250, but what we haven't seen yet is a meaningful rotation from Bitcoin liquidity down into Ethereum, which we would have seen in previous cycles.
We've certainly seen Solana do relatively well, and we've seen meme coins do well. We have sort of a Bitcoin meme coin barbell and everything with utility in the middle getting sort of liquidated into Trump coin, right?
So, I mean, what do you make of where we stand in the cycle? What will be the winners? You know, if we do see Bitcoin at 250, you know, what altcoins, if not all of them, are going to outperform?
So I think meme coins are a thing. My next paper is going to be all about why I think the Trump political meme coin is the start of a whole sort of asset class of politicians around the world using meme coins as a way to gain engagement, campaign finance, all those sorts of things.
And the best thing about meme coins is you don't need to know anything about finance to trade them. It's literally, "Do I know who this person is? Do I think more people will know who this person is in the future?"
And if yes, I buy it. If no, then I don't buy it, right? That's all you need to know.
And so it's super easy for people to trade, which is why the Trump coin did so well out of the gate.
And so I think that that's a harbinger for the future, right? There will be, you know, a bunch of altcoins that do things right.
Obviously, I think one of the standout successes has been Athena this cycle. Obviously, I'm a large adviser, so I'm talking my book here a bit.
But there have been some super successful projects that are, you know, 10 to 20 billion FDV sort of things.
The issue is that all that sort of energy and money went into meme coins. You know, we have, you know, Trump went to 80 billion FDV at its high a few days ago.
You have, you know, Dog with Hat went to multiple billions and all these different things. So all that energy's moved over to a space that's easier to trade.
You don't have to know anything about it, and yeah, you don't have to read some white paper and listen to a bunch of lies by some know person trying to pull the wool over your eyes using a lot of like developer speak, right?
Which is what most of the altcoins are. It's all dog.
It's just that we didn't have anything else to invest in. We didn't have anything mic to invest in. Now we do.
So now you're going to have to be that much better as sort of a utility project to garner capital.
Because if I'm, you know, the random Dean, I'm like, "Okay, well, I can Trump coin it, or I can like read this like 50-page paper and not understand a thing that they're saying."
And half the time, they're rugging me anyways. So the memes are more intellectually honest, basically.
And we're just basically saying we're a bunch of degenerate gamblers who are here to speculate, and regardless of utility, we just want to speculate on your token, right?
Give me a narrative. I don't care, but it's all about the number go up.
I mean, to your point, though, Athena's done exceptionally well. Sui's done well. Like we've had a number of kind of the new shiny layer ones do well, and Solana has done exceptionally well.
Do you think that because you believe memes are here to stay, that Solana will remain the meme coin casino and will do well?
I mean, listen, I said I want to own the casino. I don't want to be playing at the table. For someone like me, I feel like throwing random Solana at a bunch of memes is probably going to be losing money at the table.
But if you just buy Solana, you get to be the casino.
Well, I mean, obviously, it's Solana's game to lose at this point. You're going to have other chains like Aptos and, you know, other layer ones trying to come up there and say, "Oh wow, look at all these transactions. Look at all these fees. I need to be in there too."
You know, don't sleep on Ethereum. Maybe they'll stop selling their coins as a foundation and get their together and, you know, come up with some sort of answer to this as well, right?
Same, it's the same story as Nvidia, right? Ethereum back in 2020 was the Nvidia of today, right? Super successful, trades us some ridiculous multiple.
And then someone says, "Oh, I can do that better and cheaper and faster." Maybe it's not decentralized or whatever, right? You can make all these claims on what Solana is or isn't or any of these other layer ones in terms of security and all these sorts of things that Ethereum prides itself on.
But at the end of the day, the customer doesn't give a right. It was faster, it was cheaper, I used it, you had something on there that was there, it wasn't on Ethereum, I used it.
And so, um, Solana, hopefully for people who are, you know, massively long, that doesn't fall victim to the same thing as Nvidia and Ethereum in terms of, um, a faster, cheaper, shinier bobble on the rise is going to do meme coins better or whatever it is.
The new thing, faster and cheaper is indisputable because the bulk of USDT tether transactions are on Tron, right?
I can't find anyone who likes Tron, but everybody's using it because it's fast and cheap, and there's a ton of dollar, you know, USDT liquidity on there.
And it's been the best example of that. And every time I point that out to people, they say that's not true. They can't believe it, right?
Everybody, I think, believes that stable coins are all moving on Ethereum, but the bulk of them are moving on Tron because it's fast and cheap.
And their friend in Venezuela said, "I want to send you 10 bucks. Download this app."
Yeah, exactly. It just blows my mind how little, I guess, people care in this market. But it shouldn't.
But that said, do you think that we will have some people caring about utility on any of these things in the market that's coming?
We have huge narratives that could potentially play out here. Obviously, real-world assets (RWA), a lot of people pointing to that to potentially be kind of the big mover in this cycle.
AI agents or the crossover between AI and crypto—do you find any of this to be real and meaningful, at least in this cycle?
For sure. I mean, I'm a hater on RWAs, but that's a different sort of situation.
At the end of the day, there will be super successful projects in each one of these verticals. It's just not—you just can't be Ripple and Cardano in 2025, do nothing, and have a massive valuation.
Right? That was then, this is now. There's way more competition. The money can go elsewhere.
So I think if you think that, oh, we need to have a 2020, you know, DeFi summer or ICO 2017 again, things change. We have meme coins now.
So, you know, go with where the market is. Does that mean that useful things are not going to get built? Of course not.
You know, NROM, we're funding useful things. Hopefully, we pick the next Athena of the next cycle.
But at the end of the day, it's going to be harder and harder to pick those things because, you know, the retail capital is done with high FDV, low flow VC coins.
They want, you know, instant liquidity on meme coins and trade their favorite celebrity politician.
But the celebrity politician has a high FDV and low float, ising as a meme coin. We'll see how that resolves itself in 2028.
I had a long conversation with Has Kesi from Dragonfly about this, and he was very adamant that Trump is not a meme coin.
He said, "Listen, you're betting on—well, his idea, he wouldn't go so far as to say this is clearly a security, and I don't know where on the sliding scale it is.
But he said, 'Listen, people are only buying and selling it because of the name of the person promoting, which is obviously Donald Trump.'
He said, 'You know, if it was a true meme coin, 100% of the supply would be on the market. It would be sort of freely floating, and there'd be price discovery.'
But these guys have taken that VC model you just described, which would normally be, you know, ascribed to a security, and held 80% of the supply after sniping 80% of the existing supply when it came out.
Listen, I'm not saying they're doing anything wrong necessarily, but this isn't just the classic launch of a meme coin where all the supply is out there, and it's fair game to some degree, of course not.
But at the end of the day, he's Donald Trump, and he could do that. When the next person who does it, I don't think they're going to get away with it.
So the community will demand it'll get lower and lower and lower, right? Maybe the next person does 50%, and then it does 30%, and then, you know, by the time some random, you know, minister of parliament or legislator wants to launch their own political meme coin, the standard will be free, fair launch, no bags held, all this kind of stuff, right?
And so, but the first one gets to get away with murder, right? It's so good on him. It's a financial game. He's a financial guy, and he did what he did.
Yeah, I mean, there was this sentiment that the president did it, I can do it. I don't think that's going to fly in court according to any of the lawyers that I've spoken to.
So I don't think the legal—it's, I think it's more about what the community is going to demand out of—oh, it's not.
Did you see that right after the inauguration, the preacher who, you know, gave the prayer at the inauguration launched a meme coin immediately called Lorenzo?
I know, that's awesome. D, you've got to see this. He launched it called Lorenzo, and he said, you know, the community has sent me a bunch of tokens, then went on to say, "I've locked them in a liquidity pool to make sure that I don't."
And it was like, dude, you're not ignorant of how this works, right? It was one of the funniest tweets I've quite literally ever seen on Twitter.
So you definitely have to see it. Moving on, though, I want to talk about Ethereum.
You kind of alluded to the fact that maybe they'll get their together. The foundation will stop dumping. They've sort of had this, like, people viewing them as a woke project or dysfunctional, or it's been replaced by these others.
To me, that sounds like a buying opportunity when people tell me that something's going to zero and it's beaten down but still has, you know, meaningful liquidity and name brand.
Do you think that Ethereum can perform well this cycle?
For sure. I mean, it's the Electric Capital report still says that they have the most developers. That's, you know, all I need to see.
You still have people building on Ethereum. We still fund lots of really intelligent people building new stuff on Ethereum.
It's still, what, three or four times the market cap of Solana? So still the number two has name recognition, blah, blah, blah, right?
So I wouldn't count them out. I don't know the politics of the foundation. All I read is what's on Twitter, and you know, they're selling coins.
That's it. Do I give a about their mission or whatever? The no.
Sounds like Valhalla cares about the price. So, you know, maybe he'll do something about it. I don't know. Maybe the community will demand something about it.
But at the end of the day, even without all that, there's a lot of hate, and when there's a lot of hate, there's a lot of opportunity.
Yeah, okay, so we're aligned there. Obviously, they're the second asset that got a spot ETF.
So obviously, you have institutions looking at them. With Trump coming in and a change over the SEC, a lot of people speculating that we're going to get a slew of other ETFs.
I mean, we've seen a Trump and a Doge ETF filed for—maybe we don't see those quite yet, but I do think that people are handicapping the odds of a Solana ETF as relatively high, maybe even an XRP ETF.
Do you think that these products, as we sort of trickle down and add more, are going to be particularly popular or meaningful for the price of these assets?
It hasn't been really for Ethereum yet. I mean, and obviously, they don't have as much name recognition as Bitcoin.
So while the Ethereum ETF launch has been great, it hasn't nearly been as much of a knockout success as Bitcoin.
And obviously, the marginal popularity will decline as we go down the stack in terms of the market cap rankings.
I think at the end of the day, what pushes people to reallocate is money printing, right? If my government bond portfolio is underperforming, if, you know, the economy is rocking and rolling, and I'm only getting 3 or 4% on my bonds or in my bank account, then the crypto ETFs look like a good deal.
But if that liquidity isn't there, then I'm going to stick with what I know.
You know, I talk with lots of, you know, high net worth money managers. I'm like, "Oh, what are your clients asking for any of this stuff?"
And yeah, while in our echo chamber we think that this is really important, no rich people are asking for crypto in a big way, right?
So it's still not a thing. And so yes, Bitcoin is the thing. Everyone knows what Bitcoin is, but the Solana ETF is not going to be as successful as the Ethereum one is, as a Ripple one, as a Cardano one, or whatever down the line unless you sort of get a mental shift.
And that takes time because at the end of the day, all these wealth advisers basically plug in a bunch of numbers into a computer. It tells them the historical returns, and they say, "Look, it did well in the past; it'll do well in the future. Don't fire me if it goes on in price."
And so once you get enough history, then they can sort of, you know, reduce their career risk by putting people into these crypto products, and that takes time.
And so I think crypto people have been a bit impatient in terms of how long it's going to take for these really to impact the market.
But if you think about it, like the passive investing movement has had its zenith right now, but this, you know, ETFs were launched in the mid—in the early 90s, right?
And it's only now, 30 years later, that we're really seeing the real effects of this set-it-and-forget-it type of passive investing.
And so I think we're going to need some time for the salespeople around the world to start getting these things embedded into pension plans, all these sorts of defined contribution things, all these set-it-and-forget-it type of investing programs.
It takes time. So I don't think that if one of these launches tomorrow, it's going to have a massive impact on the price of crypto.
The Bitcoin ETFs aren't even there yet, right? I mean, if you look, you talk to financial advisors, you talk to the issuers, they say it's a fraction of people that even have access to them, right?
Because, you know, most wirehouses haven't approved them. Vanguard's never approving them, apparently, and a lot of RIAs haven't done the due diligence.
So if we can't even get the Bitcoin ETFs, you know, passive into those passive allocations, good luck with the Doge ETF.
So we talked about the dip to 75 and the prediction of 250, but we didn't talk about what sends us to 250 unless it's simply just a whole lot of liquidity.
But that's still a much, much bigger number than 75. I mean, that's, you know, over a two and a half X up from those lows.
So do you think that there's something unique to the Bitcoin news cycle or market that sends it to those highs? Is it just the cycle, or is it just high beta to everything else rising?
Well, I think if you listen to what Trump and Bess and, you know, all of his lieutenants want to do, they want to rearrange the world around the U.S.
You know, take them at their word, whatever, but that requires a lot of U.S. money printing. It requires destroying the real value of government bonds in the United States.
It's the only way they can do what they want to do. It requires massive amounts of bank credit creation to hand to companies to build things in America because they can't afford to do it because China is just so much better at it, right?
So this requires trillions of dollars of money. It can only come via printing it, and they're going to use the ability to have the world's reserve currency to essentially reflate America.
That's in America. In China, they need to do almost the same thing, a little bit different, right? They need to pump up their property market, get the plebs investing in stocks again, get them confident again, get inflation up.
They need to print money as well. Japan needs to sell a bunch of and repatriate Yen, and the U.S. doesn't want them to sell the stuff.
So the U.S. is going to give them the money so they don't sell anything, right? Europe wants to decarbonize, but then shut off all their energy from Russia and shut off products from China and continue having the biggest welfare state in the world.
So they need to print money as well. So everybody needs to do the same things to fulfill their goals.
And I think the catalyst for getting into gear is, you know, Trump and Bess have been very clear: we're going to weaken the dollar, we're going to increase credit creation, and that's going to create growth.
We'll see if that actually happens or not, but at the end of the day, they're going to try, and they've been very consistent in that message.
And if you listen to some of the macro analysts I read, you know, Zoltan and Puser and some other guys who a lot of these people listen to, you know, what are the things they're talking about?
Devaluing the dollar versus gold, um, turning up, telling friendly countries, "Hey, you have all these treasuries, that 10 years, we're going to stuff you with a 100-year treasury. You can't sell it. I'll give you dollars for it if you need them.
But if you want U.S. markets and U.S. security umbrella, you're going to take your treasuries and turn them into 100-year bonds, which is a massive devaluation, or you're going to give us your gold, and we're going to give you this piece of paper.
And if you don't like it, go yourself. That's what they're telling people.
And so it's going to happen, and that's these are the sorts of things—these are the massive changes in sort of the economics of the world that will bring crypto, the only free market left in the world, and to an extent gold, to levels that we—fiat price levels that we would not find that are unimaginable.
And so that's why I think that that's how we get to a million-dollar Bitcoin. You know, 250,000 is a stop in the way.
It's this realignment of the chessboard, and everybody on the board is going to print money to help themselves out.
Sounds exceptionally good for wealthy people who hold hard assets and exceptionally bad for everyone else.
Exactly. Sad, sad state of affairs. But I guess we can both agree, as we conclude here, that just buy some Bitcoin, regardless of where you are in that spectrum, and at least you'll have a bit of a hedge against all this nonsense.
Exactly. Arthur, enjoy your skiing. I know that we got to go, and you have better things to do, so I appreciate the conversation as always, man. Have a great day.
Thanks for having me.
Let [Music] let's go.