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Market Talk- Is it over?!Massive red day for crypto&stocks incoming?!
Recorded: Feb. 12, 2026 Duration: 1:49:09Space Recording
Short Summary
In a recent discussion, crypto enthusiasts explored the volatile landscape of the market, highlighting significant trends such as the soaring valuation of AI companies like Anthropic, the bearish outlook for assets like Solana and Bitcoin, and the potential for innovative financial products to reshape investment strategies. As the market navigates through these fluctuations, the interplay between traditional finance and emerging technologies remains a focal point for investors.
Full Transcription
Thank you. Thank you. Thank you. Thank you. Thank you. Thank you. Music Music Music
Music
Music
Music
Music
Music
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Music
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Music Music Walk along the razor's edge, but don't look down to keep your head or you're finished.
Open up the limit.
Pass the point of no return.
Reach the top of the steel, you gotta learn how to keep it. Oh, Crash the gates. Crash the gates.
Going for the back of the yard.
Nothing gonna stop you, there's nothing that's wrong.
So close now, you nearly have to break so much.
Yeah, yeah. Welcome to the limits.
Take it maybe one step home.
Our game's still playing so we better win it. I don't want to dance. Music Oh, my God. Thank you. Music Oh Welcome to the limit.
Standing on the razor's edge.
Don't look down and just keep your head.
Hey.
Welcome to the limit.
yeah what's going on, guys?
Welcome back to Market Talk brought to you by BB.
My name's Wabi.
I hope you're all having a fantastic Thursday or Friday.
I certainly am.
I feel refreshed.
I smell opportunities in the market.
And that's exactly what the market's presenting itself, man.
Robinhood is making a new year-to-date lows. and that's exactly what the market's presenting itself, man.
Robinhood is making new year-to-date lows, and I think some of us are going to be lucky enough to catch it under $50 a share.
You have the Qs close to making new year-to-date lows,
the S&P also pulling back a bit,
and there's really not much green in crypto land with
the exception of the usual couple of bags on chain that are really just in these uh massive ranges
but i think the the one thing i do want to mention here on the show just to get it started is um the
insane valuation that anthropic has they've raised tens of billions of dollars at almost a $400 billion valuation, which is honestly insane.
And for those that don't know, Sam Bankman-Fried actually had a sizable stake in Anthropic many, many years ago before FTX collapsed. And man, talk about fumbling the
bag, man. That is a generational bag. But other than that, I hope some of you caught yesterday's
show. It was probably one of the most entertaining shows that I've ever hosted here on BB. We had Peter Schiff, Grant Cardone, and a couple of other speakers as well.
I think we streamed yesterday for about four hours or so, close to four hours. So if you guys
missed out on that, some very, very, very cool, interesting conversations occurred. Feel free to
check out the recording. Just click on the BB profile. And I think it's, yeah, yesterday's show.
So it's only a couple of posts down.
And what an entertaining show, man.
These guys just absolutely went at it.
So, man, these last few shows that we've been doing the last few weeks have been nothing short of remarkable.
And entertainment value. And also alpha value, man. A lot of people
had some shorts on earlier in the year at much higher prices, and we're seeing BTC slide down.
But more importantly, for those in the altcoin space, we're seeing solana basically slide down since the friday high you even had btc
make um slightly higher highs after friday over the weekend i think we hit 71 72k depending on
what exchange you look at and solana refused to budge out of friday's high and if soul is going
to continue to be signal as it has over the last, let's call it three years,
then I think that's really signal for all the liquidity that's coming to the market.
Many people, as in previous cycles, they leverage their altcoin holdings and they buy BTC.
And when their collateral starts sliding down, then majors are going to suffer.
It's happened since 2017. This isn't
something that only occurred during the previous bull market. This is something that's been around
for many, many years. And I think as a matter of fact, there was a firm yesterday that halted
withdrawals. I think they're based out of Chicago and they managed, I believe, over 2,000 institutional
clients. And I think the volume that they provided to the overall market was just north of 50 billion.
And some people are saying, oh, this is echoes of 2022. But I think that's kind of a psyop because in 2022 you had the federal reserve hiking rates
at the speed that wasn't seen since paul volcker and it got so bad i think people forget that
it got so bad that you had you had kathy wood and the bank of england write notes to Jerome Powell telling him to please stop raising rates because he's going to crush the economy.
And he did.
He actually had some forex crises happen in 2022.
So I think that's the one thing that's materially different. different and it just crushed all the easing um that many bodies became fruitful off of like some
exchanges like an ftx looping leverage like some hedge funds like 3ac that were also looping
leverage with client funds and you you don't really have that the dots aren't even close
to the leverage that people from the previous cycle had.
You don't have a Luna.
I don't even think there was a massive DeFi protocol in this cycle, unless I'm missing something.
But to my knowledge, there wasn't anything big that occurred over the last three years in DeFi.
I think the closest that we got to that was memes, meme coins and AI.
And those coins were just spawned out of thin air.
They had nearly no leverage on them.
But either way, that's kind of my rant on that.
But these valuations that are occurring for some of these AI companies are absolutely ridiculous. I mean, a $400 billion valuation for Anthropic is absolutely insane.
There are a lot of cool things happening in the AI space.
It's just that there's really no way to position for that in crypto
outside of these tokens that have spawned up on base in Solana that don't really have
much life force. They spike up to these pathetic ceilings of 20 to 80 mil and then they die
after their three to five day run. That's not really sustainable. And in the stock market,
really sustainable and in the stock market there are very few places to hide we've seen things
like sandisk run up like crazy micron hud 8 and it's just so ironic that after these things top
out even if it's just locally all these all these quote-unquote catalysts appear in the market.
You have Clodbot making a ton of waves.
It's appearing on TikTok algos, Instagram algos.
You have e-commerce guys talking about it.
But the difference is that there's really no way to position in it outside of these insane valuations you had the qqq top out in october and then you had beta run up like crazy which ironically enough that's kind of what happened
in 21 btc topped out and then you had a bunch of these metaverse tokens going up like crazy you had nfts going up like crazy luna still ran um i think
things on solana even ran up a bit things like uh i think radium ran even even after solana topped
um bonfita was another one and probably some other coin on soul that that i'm forgetting
about and things on avex ran up like crazy as well
um i think snow dog or snowbank was one and that was after btc had topped so what we saw
in late 21 is exactly what happened to the stock market over the last few months you had
the q's top and then the beta was going up like crazy things like sandisk and a few others so it's it's kind of eerie to be honest and um now we're seeing this the cues kind of slide back a bit retesting their year-to-date
lows what happens when those lows break i think it's opportunity to be frank and for a long-term
investor something like hood under 50 i, I mean, you're talking about
a 200% rally over the next few years, should it break all time highs? And they're really making
strides. We talked about the more of the fundamental side of things with Robin hood,
their, their prediction markets, sports betting, stuff like that. And it's kind of like what Amazon was many years ago, where people
that were early to Amazon believed that Amazon was going to be the future of e-commerce.
And e-commerce right now would kind of be sports betting and gambling and instant gratification
through positioning in markets. What e-commerce was in the 2010s, that's probably what markets are right now in the 2020s and
2030s.
At least that's my take and kind of my thesis on hood moving forward.
And it's a lot better to position on hood than on something like Solana, which still
has much work to do but um at least it's it's it's that third token that people
really wanted um last cycle where it's like all right you just buy btc and eve but now i think
i do think soul is going to be around for the long term um same thing with hyper liquid if it
survives this little downturn where there's like very little noodle
new liquidity coming into the market there's actually more liquidity more liquidity leaving
the market than entering the market when and when that happens you know there are oftentimes these
these drawdowns that could shock people um after ftx you still had all coins make lower lows
like solana solana still got cut in half even after btc bottomed out and on thanksgiving weekend
in 2022 and that could be the case for a lot of these alts typically after majors bottom you have
one more spike down on alts um and there's a saying that i have history doesn't
repeat itself but it often rhymes some of you someone probably coined it before uh before i did
but i'm just gonna call it my own um because i can but either way i got knock up here i see
prometheus in the audience.
We'll probably have some of our other guys show up during the second half of the show,
as I always do. But before I get started, guys, before we get rolling here on the show,
if you guys can go ahead, show some love to the space. Best way to do that is by clicking the
spaces tab. Once you guys do that, once you guys click the spaces tab once you guys do that once you guys click
the spaces tab you'll see a nice link right above all of our profile pictures that says
x.com slash i slash spaces you guys can go ahead and hit the like button hit the repost button
does a number of things helps bring the show more out into
the algorithm, brings more brand awareness and all that good stuff.
And who knows, maybe some of your favorite speakers and posters here on X can show up
and I'll bring them up to speak to talk markets.
We've had a handful of characters should come up to the show.
Again, we had Peter Schiff on yesterday and even people like Dan Bolzerian and Scotty Pippen and I think like a few other a few like news reporters were in the audience yesterday.
And one thing I'll say is if you have a dog and you're walking the dog.
You actually have to pay attention to your animal You can't just look on your phone while the dog is just
Roaming around walking in a direction that you don't know and it's it's actually really weird
There are many people that should be vetted before they have dogs
To be honest with you man, if you have a dog actually walk the dog
all right, but I
Know that's out of uh out of why we actually actually got a dog today that i don't understand this dude it's like you have a dog and
you're just you're just standing but i actually you're actually actually you're just you're like
looking at your phone like like a zombie with your head down, and then people are going to wonder why they have bad back problems
when they get older.
My goodness.
But I actually got a dog today.
You did?
Yeah.
You know what it's called?
Oh, tell me.
It's going to be called Bear, right?
It's called Bitcoin.
It's an absolute dog.
Look at that shark.
Oh, my goodness.
Naka with the dad jokes.
All right.
Naka, you need to say your catchphrasephrase man come on before we get started come on good evening little
djens how's the bull market treating you the bull market of the past seven or so days i believe
it's been a very nice bull market from 60k up to 70k don't spend it all at once
uh so yeah how's it going Naka that was a 16 hour bull market like I I timed it we we bottomed at
like 8 p.m est right as futures no no we bottomed at 7 p.m est right as futures were getting rolling
post-market trading um no no that's when futures open I think futures open up at 7 p.m. EST, right as futures were getting rolling, post-market trading.
No, no, that's when futures opened.
I think futures opened up at 7 p.m. EST.
When Asia wakes up, we bottomed, and then we just chatted like crazy up until lunchtime, like 12 p.m. EST. And also, I don't understand these time zones, dude.
Like, what do you mean if I go to california there's going to be a
four hour time difference i don't understand that you're telling me that if you want to trade the
the opening bell for the stock market i have to be up by like 5 a.m that's crazy dude it should
just be one universal time but anyways yeah well while we ask them i have some bad news for you on
that because the world
is actually like a sphere so if you did that you know it would be like night time at midday
in some places so that it was anyway it's a whole thing that's just too bad man that's just that's
just too bad honestly i think people just have to deal with it man at least in america i don't i
just don't understand it
like two states away and the time zone difference is two hours it's ridiculous we continue
yeah i mean basically you know bitcoin looks like an absolute dog um solana is
solana actually looks worse
Like it actually genuinely looks like it's going
To like 30
Maybe 20 dollars
It's fucking horrific it's puking
If you have a coin
And it goes to like a big nuke
And then after the nuke you just get
This really weak kind of like
Dribbling price action
Where it just sort of gradually bleeds out
it's never good it's never good when that happens because it just means you've got more downside
coming but it's not ready to puke yet it needs another couple of months maybe a couple of weeks
depending to just sort of build up that sort of pool of vomit before it can puke again
but nobody wants this fraud um Nobody wants any of it.
ETH, oh my god, ETH looks fucking awful.
Like, Jesus Christ.
Like, yeah, it just all looks bad. It looks horrific.
Just a matter of time, I think, before the stuff goes lower.
I mean, you can never be certain. I have my own model
based on RSI.
And what my model is able to detect is
a bit of a math lesson for people here. I don't know if you ever studied in school
if you have a smooth function and you want to find the bottom of it,
what you do is you differentiate it twice and you find when the second
derivative is equal to zero.
That tells you where the bottom is.
It's a bit harder to do that with, you know,
stochastic functions like there are markets,
but my model tries to do this.
So it has an indication of like,
when does the momentum shift from negative to positive?
And when that shift happens,
that's probably the bottom or close to it.
My model is still saying we're in negative momentum. We're still heading down right on all time frames
Um, so yeah, it just looks bad and I don't know how
It's gonna play out. We could chop for six months and then puke
Or it could all be over next week. I can't tell. I genuinely can't tell.
You know what would be good, man?
Buying Soul.
If it actually hits $40, selling it at $90,
and then probably buying some hood leaps.
Because there's nothing that I would... Honestly, I. Because there's nothing that I would...
Honestly, I would...
There's nothing that outperforms crypto off of the lows.
But after that initial bounce,
you have to rotate into leaps, man.
That's what's happened.
I would buy so much Solana at zero.
I would really splurge on it.
What's the lowest you can see Sol going?
I think there's some chance
that it goes negative like Oil did
in 2020.
Like, what will happen is the police will show up at your house.
They'll ask you to get your, you know, fucking phantom wallet out.
And they'll fine you $10 for every Solana they see on the balance.
I think that's pretty much the worst case scenario.
I'm not going to come on, man.
Naka, come on, man.
Stop these foolish games.
Honestly, realistically,
it has a macro
double top.
The breakdown target would be
like $1.50 or something.
That is probably the lowest it could go.
But I don't think it does that.
To break down, it has to
break below about $12,
and I think that's probably protected.
I think realistically it bottoms at like $25.
But that's like a cycle bottom.
That's not a forever bottom.
It can still go lower in the future.
But I think the cycle bottoms about $25.
It's just kind of...
The chart just kind of cools out.
So a clean...
Maybe a little higher
A clean 90%
85-90% drawdown from the September top
That would only be
90% which isn't that much
That's not a very
If you look at what it did last time
Last time
It did minus 96%.
And you might think, well, 1996, what's the difference?
That's only 6%.
But that's actually a big difference, okay?
The difference between minus 90% and minus 96% is actually huge.
It's like a 70.
That's another 70% drop after you've already dropped 90%. So, yeah, I think 90% is probably the bottom for Sol.
Maybe a bit less.
Maybe it'll be like too many people will want that level.
Maybe it goes to like 35 or something, and that's the bottom.
That would be negative 88%.
And it could do that by the middle of this year.
And you knew it was over the moment you said that you bought Litecoin,
man. The moment
you were giving
the Litecoin thesis,
all the breadth in the market just
stopped.
And then Monero topped.
I don't think Monero's ever
coming back. That was it.
You had Nick Fuentes.
I'm kind of salty about that. I lost money on Fuentes. I'm kind of salty about that.
I lost money on Monero.
I'm kind of salty on that. I should have just shorted.
Monero actually
still looks good. Its chart is one
of the most intact charts
in the whole of crypto.
At least on a macro scale.
As long as Monero can stay above 150,
it has
an intact chart.
Where is the risk management waiting until
150?
I've already sold.
I already got out of 350 or something.
If it can stay above
for the next cycle,
that's
probably macro good. If it goes below 150, that's probably macro good.
If it goes below 150, it's probably going to like zero.
But if it can hold 150, I think we're good.
Are you buying Anthropic IPO?
If it did IPO, I'd probably buy some.
Yeah.
What percent, Allo?
Maybe half a percent.
Just hold it long term.
Easy hold.
I mean, what's the worst thing that can happen?
You put half a percent of your portfolio into Anthropik,
and you say, I i'm gonna hold for like
50 years right and then the worst case you've lost half percent the best case it kind of like goes you
know a million percent and you just that's it you just live off it that's crazy man i mean why i
mean what that's i mean aren't they already valued at like
300 bill or something like that
yeah yeah so that's basically saying just to get
a 10x like just to
get a 10x
it would have to flip Nvidia and if
you want a 10x why wouldn't you buy hood
cause if Anthropic does it
oh but it doesn't have to
flip Nvidia because Nvidia
can just keep going up.
If you're a real bull on AI and the singularity,
then everything just keeps going up.
It's just insane.
Every year, again and again and again and again and again,
these things keep putting in 100, 200, 300.
What's the singularity?
Can you Eli 5?
The singularity.
Yeah, tell me.
The technological singularity. How old are you, Wabi?
Just so you don't want me asking.
Late 20s.
Late 20s. Okay, so, back when you were just a little baby, Ray Kurzweil wrote some books called, you know, The Singularity is Near back in the late 1990s. And his thesis was basically that humans were going to be effectively replaced by artificial intelligence.
People thought he was mad, but it turns out he was basically probably right.
AI is going to take over as the dominant form of, shall we say, organized activity in our solar system.
And it's going to be able to reproduce itself more quickly than humans.
It's going to be able to think faster, maybe even be a little bit smarter in some ways,
maybe eventually smarter in every way.
And there's going to be robots as well.
So the economy, the global economy,
will move itself out into the whole solar system.
And if you look at the whole solar system,
the total amount of matter and energy
that you could get from disassembling Mars
and constructing a Dyson sphere,
you can easily trillion X GDP just from things that we already know how to
But,
you know,
we don't have the hands and the brains and the resources to do it.
But AI sort of unlocks that.
So this can all trillion X in the 21st century.
And it doesn't,
it's not necessarily bad for humans because we could become kind of like,
you know how like the Amish or the Amish still exist in America.
They're kind of,
you know,
the people with the wagons and the bombs and all that stuff.
Yeah.
Normal food.
You know what I mean?
Normal,
normal people,
bro.
Normal people.
The way,
the way.
Yeah. They speak German, right? Like they don't even speak English. They way life should be, man.
Yeah, they speak German, right?
Like, they don't even speak English. They speak German, and they dress like, you know,
they're from the 18th century.
But, like, basically that's what humans could become,
the equivalent of that in the new sort of AI slash robotic age,
where we would still, maybe some people would still live mostly human lifestyles.
And, you know,
there would be this huge economy going on all around us and maybe it would be
hostile to us and destroy us, but maybe not. Right. Because, you know,
the American, the majority of the American nation kind of doesn't really
attack the Amish. We just kind of like leave them where they are.
We kind of mostly protect them and stuff like that.
If that were to happen, dude,
I think we would build a train meant for the road
and we would just run all those robots over.
That's exactly what would happen.
We would construct a dinosaur, dude.
If you want to put America, if you want to symbolize America, it's not a bald eagle its trains
Dinosaurs and tanks you think a robot could drive a yeah better than than an American than an American running on
Coca-Cola and
Come on, man, dude
I would bet
Thanks kind of all look look look here, here's the deal, right?
So basically, the singularity thesis.
Okay, okay, finish, finish, finish.
The singularity thesis is basically that
if AI and robotics takes off the way it looks like it's currently taking off,
then the global GDP, which will soon become the GDP of the
solar system, will just keep going up.
Growth rates will increase.
We'll have the economy growing maybe 20 or 30 percent per year for the 20th century.
And so all this shit will go off a lot.
So if Anthropic goes public, I would buy,
I'd put in half percent, something like that.
Put it away, don't try and trade it,
just hold.
And just be like, I'll just hold that.
Right?
I'll just hold that, and if all this stuff pans out,
and if Anthropic does well,
I'll million X on it.
And that'll be fantastic. And if not if Anthropic does well, I'll million X on it. And that'll
be fantastic. And if
not, if it does okay,
if it crashes, whatever. It's not a big
loss. So I think
that's kind of
the way I would look at it.
I was going to say, man, I have to give humans a chance dude because if there was like
a robot invasion dude i would honestly bet on prometheus and tucker taking out an army of like
50 bots knowing what they can do i I... I...
Maybe if the robots
were made of donuts, but...
No, no, no, no.
You've never played Raid the Darkness, dude.
If you understand what Raid the Darkness
is, you would not underestimate
human capability.
Basically, I don't
think this is necessarily
humans versus AIs.
I think it could basically... You saw that Sam Altman post?
He's like, oh this agent
Went against my code
Or whatever it was
I don't think this is necessarily humans
Versus AIs, although it could be
I think it could also be
Humans plus AIs just forming a much larger,
much faster growing economy where if you play your cards right, you can become a billionaire,
you can get eternal life, you can never work another day if you invest in this stuff.
So I think that is the ball case, the ball case. Basically the ball case is
AIs and humans are going to add together in an economy. It's going to grow a lot. It's going
to solve a lot of our problems in particular. It's going to solve a lot of biological problems.
Um, you know, cure people from aging because I'm in my forties now, man. I'm, I'm a monk.
cure people from aging because i'm in my 40s now man i'm an unk it's not good you don't want it
take roids like you don't want to you don't you don't want to be an unk being an unk sucks okay
yeah anyways basically basically all of these problems we have problems with having to go to
work with getting old with not being able to you, spend your free time as you want, it's possible that this technology could solve all those
problems, make everyone rich, and everything's Gucci.
So, you know, it's something you should consider.
I don't want to be deterministic about it because that's never good.
You always have to consider multiple scenarios.
But I think if you believe the
singularity thesis and one of these AI companies' IPOs, I think you should put half a percent into
it. And to be honest, I would even hold back another half a percent. And if there is a really
big, nasty AI bear market like the dot-com bust, I would like dca the other half percent uh in over you know a couple of years
so that you can get more exposure at lower prices um yeah that's that's the way i do it
yeah um and if you're feeling like an unk, just go on some TRT and take some growth and you'll feel great.
Dude, I have so many fucking medical problems.
You need to get on a peptide stack.
You have no idea how bad it is.
Get on a peptide stack.
Dude, I'm on a fucking protein pump inhibitor because I have acid reflux.
I've got all of this fucking stupid shit goes wrong with you, man.
It's not just about the roids.
It's also about you can't eat know, you can't, like, eat certain foods anymore
because they upset your stomach and all of this nasty shit.
I had a tooth chip the other day, and I'm going to go to the dentist about that.
Fuck this shit.
It absolutely sucks.
Yeah, I think the previous generation before is going to have it even worse, bro.
Like, they're going to have it.
They are going to have it um much much much much worse
man are you talking about the jester gooning maybe jester gooners no no no jester gooners
are actually still gonna make it because like they pay attention to markets i'm talking about like
i guess i guess people in their mid 30irties, late thirties, both, both men
and women, um, some of the conversations that I hear people talk about either in grocery
stores or even at the gym, like markets are the last thing on their mind.
Um, at least as of late, but they did notice the precious metals rally.
And some people actually like did try to like, I mean, they, they basically notice the precious metals rally, and some people actually, like, did try to, like, I mean, they basically bought the top of silver.
And they were, like, DCA-ing more heavily on gold as it was going parabolic.
Like, there is a thing with unsophisticated capital where the more a price goes up the more they scale into it
if that if that makes sense the more on leverage the more yeah that's that's that's basically that's
basically what i did with monero they got burnt they they they get levered right and then it's
like the conversation at hand they're not like conversations like this right they're conversations about like it's mostly about
dating because i i there's something that happens in in in humans it either happens when they're in
their late 20s or or mid 30s they feel like a biological clock and then they just most of their
conversations are wired towards dating and escapism or escapism.
And they use dating as that.
They don't use, I guess, capital markets to enhance their mindset in terms of,
all right, if I make X amount of capital,
I can start this side business that I've wanted to do.
I can focus on a new goal, right?
It's actually pretty bad out there in the real world.
It's quite scary.
And ChatGPT is mostly used now where people actually put in certain scenarios that they've been through throughout the day to justify their actions.
Like I have seen people tell me like, Wabi, I post all of my daily interactions on ChatGPT as a therapist.
Like I tell the bot how I reacted towards certain conversations and all that stuff.
And it's really weird, man.
Like people actually have ChatGPT as a friend.
And ChatGPT is probably like one of the worst models.
I think it's worse than a particular platform that I won't mention on here.
But anyways.
Are you talking about Pornhub?
Geez, no, I'm not.
I'm not.
I'm not.
Okay.
Because I sometimes have these daily interactions and I just post them into the comments on some of my favorite videos
It's a good place to get advice, you know people very honest
They have clear minds they all have they all have to they all have to post my clarity when they comment if they give you good advice
post-partum when they comment if they give you good advice was up 30 you making all this foolishness
was up 30% you
if chain link was up like 15 you know i know you would not be saying any of this stuff man i
i know you man i know you um but uh either way back back back back to markets, because whenever we have bearish chop, dude, there's very few things we can discuss.
But at least we're seeing some volatility on the equity market.
So with that being said, Prometheus, man, I know you see the cues about to break down.
What are your thoughts? Where do you think Hood goes, man?
I mean, that's a great question. I mean, you know, kind of like the golden question.
I wish I had a crystal ball to know where it's going from a price target perspective.
It's very similar to Palantir. And if you if you kind of look at those structures, right, you had essentially multi-year reaccumulations
at the lows, and we didn't necessarily have a super structured uptrend. It was more like one
continuous uptrend. And what I mean by that is generally speaking, when you get high timeframe
uptrends, you'll get some form of consolidation period. I mean, look at Bitcoin over the past 24
months, where you get a large pump and then reconsolidate.
And then you'll get another leg after that.
And you kind of just, for instance, repeat until you roll over.
And the nice thing about doing that is, generally speaking,
you have more structural flows that are supportive
when you do see downside price action.
Obviously, crypto has not seen that.
And I kind of asked myself, if you aren't going to see
structured flows in Robinhood and Palantir's chart, really a lot of the, some of the stronger
names over the past few years, ones that have been a huge proponent for onboarding large swaths of
retail, right? Robinhood and Palantir, both in particular.
And if those names are kind of rolling over and you start to see, you know, margin get squeezed,
which, you know, people don't realize like, you know, there's a lot of money that will,
you know, borrow against certain positions. And when, you know when they start to get squeezed and they start to get
margin called, what do they usually do? They first roll off their high beta, more speculative
assets within the names that they have borrowed against. And so I look at hood from a chart perspective, I could see 40 to 50.
I look at Palantir. I don't even know where it's going. It looks even worse than Robin hood.
I look at the indices and I put out a tweet yesterday and kind of what I was watching for,
for signal in the market was one of two things. I was looking at the ES and a break of 7,000 and a significant
weekly close above 7,000, right? With expansion higher, right? Not wicking above it and then
closing back down below on the weekly, but significant expansion above 7,000, ideally
into like 71, 71.50 with a weekly close around there would have been a great signal for the
broader market as the S&P has largely been topped out for a few months now up at those highs and is looking lethargic and exhaustive.
And then two, to the downside, I'd mentioned in the post to pay close attention to the Dow.
And the reason why I wanted to pay close attention to the Dow is because industrials,
energy, the staples, healthcare, that's been the driver that has largely buoyed the
markets for the past few months, right? If we look at the NASDAQ, if we look at, you know,
Amazon, we look at Megacap, we just look at tech in general, I mean, that's already rolled over.
And so if we're going to see, you know, the Dow and these industrials show signs of weakness, then that's probably
going to lead to continuation of the downside in probably a larger manner than what most
may think.
And just looking at volatility structure, again, high timeframe uptrend.
We kind of talked about it on Market Check, which is our afternoon live stream over on
um market check which is our afternoon live stream over on youtube and i'm just looking at that
YouTube.
and it's very very very very similar to and tommy pointed this out to to uh 2020 right before covid
and not just that whenever you see that you know higher time frame you know higher low uh structure
forming on volatility generally speaking you get some form of blowout. Now,
do we have to have a 2020 style blowout to the upside for the VIX and volatility? Not necessarily,
but it does look like, generally speaking, we are going to have probably some form of larger
pullback within the broader markets. If you put volatility and VIX on the monthly and you look at the RSI, if you look at 2000, 2008, generally speaking, when you get the RSI up at about 80, that is your generational kind of buy the dip opportunity to really shove everything you have and continue shoving any cash flow you do generate over the coming years into the markets and kind of sit back for the decade and just enjoy,
which we have not gotten yet. And, you know, people want to look at kind of the move that we saw
for the Japan carry trade back in August of 24. And they want to look at the tariff,
you know, blowout and volatility structure. And that's, you know, if you look at the RSI on the
monthly, we did not get,
we did not tag those historical levels that you usually tag in regards to, you know, higher timeframe, like event style bottoms. Interestingly enough, right. We did get one in, we did get one
during COVID as well. So I'm just kind of looking at that. And to me, it does look like we're probably gearing for a larger
pullback, right? The indices as of now, QQQ, the NAS, essentially the same thing. Now the SPY
and the Russell are looking to close below their 21 day EMA. And generally when that happens,
you know, they become very, very, they become very vulnerable.
And it puts them in a precarious situation where if you aren't, you know, kind of fixing the weekly candle and you aren't, you know, getting back above, you know, getting back above that moving average, generally speaking, you're probably going to be seeing some continuation at least over the next few weeks.
We'll see what we get.
Crypto is obviously still showing signs of weakness. And what I find pretty interesting as
of right now is some altcoins are showing relative strength against Bitcoin. Now, we did see that on
the way down when Bitcoin kind of made its little pit stop around, what was it, like 80, I think it was like 82K off the top
of my head. Altcoins around at those levels, or when Bitcoin was at those levels, excuse me,
signs of relative weakness. But we've kind of been talking about it on the space. Altcoins are
not attractive until Bitcoin bottoms and shows signs of either, you know, reaccumulation,
either a, you know, some form of upward movement in price, you know, either one of those. And what
do I mean by that is like a multi-month range down at the lows, similar to what Wabi kind of
prefaces at the beginning of the show. Then, you know, you can be looking or you
should then be looking to be buying altcoins. But until then, it's really still a patience game.
I don't thrive in conditions on chain or just in buying alts in general when you're seeing
conditions like this, when probabilities are, you know, skewed against me. I would rather just kind
of step away and let it do its thing and then come
back at a more opportune time when the markets are more gracious or rather when they just present
more opportunity. If I'm looking across the board and I see specifically the oil stocks like Exxon,
I see specifically the oil stocks like Exxon, Chevron, and some of my natural gas plays pulling back on days like today.
You kind of question really the strength of the market.
You know, was it Pam Bondi coming out yesterday when they were having a presser and they were talking about the Epstein files?
And she was like, why are we talking about this? The Dow is over 50,000. And that's word straight out of Trump's mouth. So, you know,
important to realize that the markets are still kind of top of mind for this administration.
And, you know, they've been known to kind of push the boundaries and kind of stress,
stress the financial markets. But once it gets to a certain point, they do step in
and they do not just allow for kind of like wide scale collapse.
So I'm not expecting, you know, any multi-generation pullback within the markets
where we see like, you know, a great depression or anything along those lines.
More so, I do want to keep
so what what kind of what kind of pullback are you thinking of on on the queues um on the queues
specifically let me just put it this way i think the vix is going to triple digits
um so do with that with you will um i kind of look at just, you know, what we saw in August and what we saw in April
as maybe test pumps.
Um, you know, generally speaking from like an event style, uh, kind of like an event
style blow off and volatility is it is mean reverting in nature, but the reversion that does occur is not as drastic as what we saw in August or in April.
If you did not catch the Japan carry trade blow off within 24 to 48 hours, you had probably missed a good chunk of know, chunk of, you know, your positioning that
you would have liked to have allocated into. And similarly for April, right? I mean, April was like,
I mean, what did you get? You got like two weeks, you got like two weeks to position.
And then that was kind of it, right? I'm more expecting probably a 30 to 60 day long, um, you know,
period in which you can find opportunity in the market and which, whatever that is, you, you know,
wherever it is, you may find opportunity, pick your, pick your poison, pick your favorite name.
Um, but that's kind of what I'm looking for. Like if I'm looking at the cues and I were to,
looking for like if i'm looking at the queues and i were to you know if i were to give a price target
on the queues as of right now i mean if i'm just like if i'm just looking at the chart right we're
floating at 600 here we've obviously been underperforming you know on the higher time frame
kind of zoom out here and look at the structurally, right? I mean,
easily you could come into 525. I mean, a retest of the previous high that we set
at the beginning of 25. Now, if you start to lose, if you start to lose 525, I mean,
you see there are some serious, serious, serious troubles that you're going to
find within the market. And especially if I'm looking at the VIX going to triple digits,
and probably more so a at least a month long, you know, broader market pullback
that, you know, is not extremely, you know, mean reverting in nature, you know, I could definitely see the cues coming down maybe to like 440, all the way down to 400. Right. I just look at kind of the fragility of the
markets right now. And it's apparent. And I think that's what a lot of people are kind of
not taking into account. Right. And what do I mean by that is the ability for people to get away with, you know, buying every 6% dip in the S&P for the last 24 months, as at this point is conditioned.
market. And, you know, I think a lot of people here pretty soon are going to be looking to be
buying quote unquote dips. And the dip will probably keep on dipping. And maybe it doesn't
have to be some, you know, large scale systemic, you know, issue that is like underlying, maybe
it's just that the markets are going to go through a revaluation period. Maybe we are just over, quote unquote, overvalued. And I largely think that there is, you know, wide scale speculation
within the market that has been, you know, quite apparent for, you know, many, many,
many years at this point, you know, really ever since 23. And if you look at the pullback during 22, like they're sure we saw a reset in a lot of the COVID names.
But a lot of that kind of speculative nature that, you know, we saw coming out of COVID really carried on through 22 into 23.
And now all the way to where we're at now, we got maybe a 12-month dispersion period. But besides that, I'm just kind of looking
at the markets and restructuring in valuations. And this kind of investment mania pop will
probably happen at some point. You just got to understand the markets are supply and demand, you know, simply, it's just a mix of buyers and sellers.
And when I see, you know, middle class America, and not just that, you know, you're more middle
class citizens across the world, really becoming, you know, their, their savings, their money
degrading, and, you know, a rapid, rapid, rapid rate. And I just look, it's like,
who is your, you know, like you like to say, Naka, who is your marginal buyer at this point
for a lot of these names? And I think we just need to go through a large scale, probably reset
within the markets. And I think it's going to be, you know, it's already reflected in
savings rate, disposable incomes, and just people's ability to not be able to live the same lifestyles that what they once were.
I mean, I look at the cues that I'm thinking based on moving averages, 420 seems like an inviting target if this is a normal pullback. We get one of these pullbacks every
18 months-ish, and it's probably a 30% pullback. That seems reasonable.
Yeah.
Man, I don't know where crypto prices would be if the queues go to $400.
I know where they'll be.
That is terrifying.
I know exactly where they'll be.
Tell us, man.
I know exactly where they'll be.
It's a place called Goblin Town.
Okay?
You want to go on a place called Goblin Town. Okay? You want to go on a trip
to Goblin Town?
Dude, that is a...
That's terrifying,
man. ETH would probably
be below 1,000
if the Qs trade at 400.
Yeah.
Oh, yeah.
I mean, I think...
Yeah. I think Yeah
I think we're kind of
I just, I don't know, I could be wrong about this
But I feel like
There are people like Tom Lee
Who are mindlessly
Buying ETH with
Other people's money
At basically any price
And I bet you Tom lee hasn't ever even installed
metamask he probably doesn't even know what metamask is who right and i feel like i know
what metamask is you know tom tom lee like the guy who does who does this bmnr yeah um yeah kind
of ethereum yeah that yeah right has he ever installed metamask has he ever used a dap
you know you just have people just just kind of YOLO in trad fi money at ease
Without knowing what they're buying. I do feel like the tourists are gonna need to be tested
And I don't think 2000 is really testing them very much
Yeah, I think he's underwater by a few billion men on his
Yeah
He's he's definitely
underwater but he feels like
he thinks this is the bottom he thinks
this is generational entry
yeah
I invited Bruce Wayne
you follow him Naka
so hopefully we have oh nice Bruce Wayne. You follow him, Naka.
So, hopefully we have some.
Oh, nice, Bruce Wayne, yeah.
What you need to do to get him on,
you need to put the bat signal up,
and then he'll come.
No, you actually follow him.
Bruce, what's up, man?
What have you got for us?
Is that your alt Naka Bruce Wayne
I have him up here as speaker
I can neither confirm nor deny that
You what?
I said I can neither
Confirm nor deny that
Bruce what's up man
I saw your request to speak
So I brought you up.
I think he must be a little bit busy in the Batcave
because I can't hear anything.
Yeah.
He's busy
arresting the Joker.
If anyone wants to
come up to talk, by the way, if anyone here in If anyone wants to come up to talk,
by the way, if anyone here in the audience
wants to come up and speak,
feel free to do so,
and I'll bring you right on up.
I'm just kind of afraid
bringing some people up,
but I'm going to take that chance.
I'm getting a report from the Batcave via DMs
that the Joker
and Catwoman
have disabled Bruce Wayne's microphone
which is why he can't talk
but he is trying
he's trying
very hard to get that microphone working
right
what's up, Vaghi?
what's up, man?
you said something about Solana
I see a head and shoulder pattern here Yeah, you said something about Solana.
I see a head and shoulder pattern here.
I'm not as good as you in looking at that,
but am I looking at around $20 something?
Going forward, how do you see that?
Seeing Solana in the future?
Yes.
Naka, what are your thoughts on Solana? Because I think it's still going to be around, man.
I don't think you have a chain.
I mean, it has put in a macro double top, right?
Macro double top is usually pretty bad.
Go back historically, go back one of the cycles and look at a coin like neo or
something but put in a macro double top it's usually not very good solana has like a lot of
builders they have a lot of people working for it but you know it seems to have kind of um
it seems to kind of become associated with shit coinery and meancoin trading and pump fund,
which probably, yeah, you know, it's better than nothing.
I mean, at least it has activity.
But just in terms of the chart, the macro double top is pretty bearish.
Jeff, what's up, man?
Hey, did you guys see what Stretch did today? STRC.
It performed really well.
What do you think about more people looking at an unstable market that looks kind of toppy?
Move to cash.
Go grab 11%. Sit on your hands.
Throwing all that capital at Saylor while he puts a perpetual bid on Bitcoin.
Thoughts?
Naka?
Because? I mean, that sounds a bit like Luna. It's like, oh, you know, I've sold my Luna token
So now I'm gonna safely harvest a 20% APY in UST for the bear market
Everyone had that plan. They thought they were geniuses
Basically micro strategy is the same thing. It's the same thing except on TradFi Rails rather than Crypto Rails.
So we'll see how that goes.
Well, that's the point.
If it's on the TradFi Rails, it's like if I borrow, if I owe my bank $1,000, it's my problem.
If I owe my bank $1 billion, it's the bank's problem.
bank's problem?
Think that scale performs a function here?
I think that scale performs a function here.
But the problem is,
if you have this system
where everyone sells their Bitcoin
to go and harvest yields on sales...
No, no, no.
I'm sorry, I don't mean Bitcoin
getting sold to buy stretch.
I'm talking about traditional
old school investors, self-directed IRA guys, guys that pay attention to their money saying, you know what?
So they're going to sell like the NASDAQ or something and then buy sales.
They're going to buy sales.
The bond allocation that they normally have, which is getting murdered.
Oh, they'll put it into – It goes to stretch. What do you think? They'll put it into what do you think they'll
put it into sailors into sailors stable coin i mean the problem with that is you know if they
sell all their risk assets risk assets are like correlates to bitcoin via a lot of correlation
algos so they might think they're selling the nasdaq but they're really ultimately still selling
bitcoin because it's all one trade so you have have the same problem as Luna had in the bear market. People were like, I'm going to sell
my Luna, which I've made a tidy profit on, put the money into UST
and get a nice, safe 20% yield. What they didn't
realize was they were taking the money out of the pot and then just putting it back in the same
pot. Because UST and Luna are the same thing. They're the same risk
pot. They have the same risk pot, right? They have the same
risk, it's just they have different returns,
right? And, you know, the fucking
sailor, you know, strifts,
whatever the fuck it is, right? It's
all the same pot as Bitcoin.
It's just that the risk, you know,
it's the same risk, it's just the return profile
is different. If you buy Bitcoin, you can
get Bitcoin upside. If you buy
sailors, like, you know, fixed yield instruments, you can't get Bitcoin upside, upside if you buy sailors like you know fixed yield instruments you can't get bitcoin upside but you know supposedly you have less
downside but the thing is if bitcoin goes lower than sailor thinks it's going to go for longer
than he thinks it's going to go then it all fucking it's all wrecked right and you just go
minus 100 on your quote-unquote safe stable coin yields and the the risk coin which in this case is bitcoin
just gets absolutely murdered because yeah wouldn't that wouldn't that what's going to
happen is say sailor say sailor will end up having to sell it on weakness right he'll be selling
about three percent of the supply of bitcoin and it's more than three percent really because like
a lot of the supply of bitcoin is lost coins or satoshi's coins or the person's died or they've
lost their key all of this shit right it's like maybe 12 or 15 of the supply that could actually
move being sold into weakness is absolutely going to nuke the price because yes there are buyers yes
there are people who want to accumulate.
But how many Bitcoin could I accumulate at 10k?
Well, maybe one or two.
How many Bitcoins does Saylor have to sell?
A lot more than that.
So, I mean, yeah, it basically could be that that is the lunar of this season.
Except because it's TradFi rather than blockchain, i think it kind of unfolds a bit differently uh but there certainly is that risk because it has
the same it basically has the same psychology to it right it's like people who want safe yield in
a bear market end up putting their stable coins or their fiat into a pot that actually has a negative 100%
return in that bear market. Yeah, tracking your logic. Good assessment. I wonder if anybody else
has other opinions about that, Benjamin or Green. Hey, sorry, I don't see your name on there. But
yeah, so when I think about this STRC thing today, like Sarah, he posted that it went up to the par value of 100. But I don't I feel like that was kind of misleading because you got to think about it. Tomorrow is the ex-dividend date. So today is the last day to buy it to get the dividend. Right. So technically, if you buy it today, you could sell it on Monday and get 10% dividends. So how much of this is arbitrage or traders or, you know, there's a lot of room for manipulation and trading in that equity.
I don't know. I'm not for it or against it.
I prefer actual Bitcoin, but it's just something to think about.
Like I foresee it. If you look at the past price action, it's pretty new, at least the history where on my on my Google chart, I don't have a lot of history.
I don't know when he launched it, but I see it trading at like probably like 98 on average.
And then you're looking at like an 8%, which kind of reflects the risk a little bit better.
But like how many people are just dumping their money in there today so they can get the dividend?
The next dividend date is tomorrow.
So if you own it before tomorrow, you get the dividend as long as you hold it until the 15th which i think is is sunday so you hold it till monday and then you get a 10%
dividend how many people are just going to sell it on on monday or tuesday and then where is it
going to go from there especially with the market decline so i don't know what y'all think about
that no good point i mean so if you know you're just trying to pocket the spread and you're playing
the short game uh totally totally understandable
that there's going to be guys playing it yeah i mean it's the day before it's an interesting
place to watch that's all i was trying to bring up is that i think we should pay attention to this
a lot more yeah um yeah and then he posted it today like he posted oh like what did he say i
don't know he said something about uh he just posted it. Like, I think he said it was built this way or built by design.
And I'm like, OK, that's pretty easy to say on the day before the day before the dividend, you know, record date or ex-dividend date.
So ex-dividend date is the day before. Is it last? You have to own it by the ex-dividend date.
And then I believe it's two or three days later is the record date. That's when they record all their owners.
And they decide like, you know, I mean,
they list the owners or decide who's going to get the stock,
essentially, as long as you've owned it by the ex-dividend date.
And then it's paid out maybe in, like, two weeks.
So just something to think about.
Green, come on, man.
Because you got to have something on this.
I don't know anything of what y'all are talking about.
Sorry. Yeah. Sorry.
Yeah.
Yeah.
Yeah.
If you just Google STRC's ex-dividend date, you'll see it's tomorrow.
And if you look at the definition of ex-dividend date, you'll see that it is the date.
You have to own the stock by that day, by the ex-dividend date to receive the dividend.
So it's not a coincidence that it went up to par.
It's been at par, though, for quite a while now, several weeks, more or less.
The vol on it is low compared to Bitcoin, which is the underlying asset.
So with STRC, that's like a preferred stock, but it's set at par. So it's
par is 100, right? So it pays 10 to 11% on 100 bucks, no matter what the price of it is.
But I've been watching it and it went down to I think like I think it was something around like 98.
I think when we had like some of the bigger downside action in Bitcoin, it went down to like maybe as low as maybe it went down to 94, 96, somewhere in that range.
But if you're playing that short game for fixed income just to grab a spread after the dividends there and the tourists leave real
fast it de-pegs and runs down to 96 that's your arbitrage right there to snatch it up early
and just hold off and wait for the next dividend now your effective yield is much higher yeah so
i mean i'm kind of interested in it um just kind of more of like a savings type of thing
um and i was gonna like if you can buy it at 96 i think your dividend goes up to about like 13 12 or 13 so that's if you're gonna hold it yeah
tax deferred if you're gonna hold that yeah and so you if you want 13 for nine years and you don't
understand bitcoin and you're a boomer like i mean if you're over 70 and just trying to coast on your bags, like
you've got to have some exposure to that.
Does that create a perpetual bid for Bitcoin from strategy in a small way that, you know,
just war gaming this in my head?
Yeah.
And I don't really, you know, advocate.
I'm not going to try to, you know, arbitrage it just because it's a lot of risk in that.
And then maybe, I don't know.
Can you have options on STRC?
I don't know.
I don't play fixed income market.
I don't play bonds. I don't do
any of that. I'm just looking at the dynamics
and trying to
see if
enough people are paying attention.
Do they kind of see what I see?
It's's really good
point he brought up about luna and yeah this is serious risk right this is what would dump
you know bitcoin even harder in a drawdown is if this shit blows up right dougie what do you think
yeah um so everything was right.
Pretty much.
But the only thing is the dividend on the monthly end is like just under 1% because it's 11.25% for the whole year.
So I don't think it's going to be as much of arbitrage of people buying the day or two before the ex-dividend date and then selling the day after um whatever
the second date was the record date um and also yeah you could always buy it when it goes lower
on like you know before the last two days when it was like down in like the 96 range for like i think
it was down there for like a week or two
so there's always that option and then trade it back up to 100 that's like four percent and then you could hold it through the you could always trade it up hold it through for that extra percent
so then that's like five percent if you really wanted to do the trade but you could also just
hold it throughout the whole like i feel like the. I feel like it's trying to appeal not necessarily to traders.
It's trying to appeal to the people who want just the 11% fixed and then also have the
potential to buy in if it goes down so then they can get a higher fix.
If it goes down, so then they can get a higher fix.
Or what they'll do also sometimes if it drops,
to entice more people to buy in is they can even raise the dividend if they want.
Like I think it started off at, I think in the 9% range and they raised it up.
Or maybe it started in the 10% range.
I don't remember exactly.
I think 9%, somewhere in the 9%.
It started at 10% when they issued it initially and it came out at like $80.
And I bought one share just to have it on my board
so I would remember to pay attention to it.
So I get your points as well.
My thoughts are people who are not in Bitcoin
or exposed to Bitcoin would become exposed to Bitcoin
if they were exiting a traditional
portfolio for safety and bought some stretch. How much capital does that redirect towards strategy?
We know what they're going to do with it, right? But I think Naka's point was valid that the concern is if this blows up, this has like Luna vibes.
Huge.
Yeah, sure.
100%.
But if it's too big to fail, is this how a strategic Bitcoin reserve is acquired by
the sovereign wealth fund or the treasury, all a 2008 style bailout where we just all
of a sudden strategy is a US owned company and there's our Bitcoin reserve.
And what do you know? Trump saved Bitcoin.
I mean, I'm not trying to go too crazy here, but I'm just saying the dynamics of that peg
being more or less held for several weeks, continuing to drive capital towards it, giving
that 11 percent at some point, guys, at the golf course talk.
Right.
No, you're 100% right. And I do like the way, was it Nick that mentioned that the 1%
dividend comes out to about, I mean, the monthly dividend comes out to about 1% when you average
out over the year. So that was a good point about people trying to get in and out. But now you're
making a great point. Like, so my, I was kind of looking into like, because it's supposed to be
a great point. Like, so my, I was kind of looking into like, cause it's supposed to be, um,
stabilized at a hundred. Right. And I was like, what effort and what strategies does MSTR or what
do they have in place? Or what are they going to implement to stabilize it? Assume if it goes down.
So let's say some kind of bad news comes out or let's just say Bitcoin is, let's just say like
Bitcoin, it stays a little lower for a while or whatever or something raises
some questions around the credit worthiness of this company right whatever it may be and and
that stock starts to slide down right how are they going to keep it up right so what well the
strategy to keep it up but they would have to buy that back exactly to try to maintain the peg exactly
but in the short term if they were able to do that, what they would do is they sell Bitcoin.
Well, that would create a lot of scatting.
So currently they've got enough cash that they could burn to maintain that peg.
So they have –
That doesn't mean after a drawdown where they defend the peg.
That's what I'm saying.
They would have to sell Bitcoin.
So their cash reserve is based on that dividend rate, right?
But it doesn't calculate in the fact that they might have to buy back up that stock at full price.
And that's when things would get very interesting.
Well, they don't have to buy it back at 100.
If it goes below, they get to buy it back at that price.
So if they sold it to you at 100 and it goes down to 92 and you dump
it they made eight percent well they made eight percent assuming that they're well i guess you
could say they made eight percent but essentially they'll still have to spend 92 of their reserve
on each share you know what i mean so it would their reserve would rapidly it wouldn't because
you're right it erodes the cash position and it makes them unstable.
That's what I'm saying.
Yes.
And that's Naka's point.
I think I'm understanding that's Naka's point.
And so this is kind of the, like, this is why I'm saying there's something going on
and we should be paying attention to it, how this unfolds.
Because if this goes badly, you know, in history rhymes, this is a hard lesson that everybody should pay attention to by proxy and not by experience.
If it unfolds to the upside, also, you know, great, you've made financial history and we should all maybe pay attention.
But I just don't think this is something that should be ignored by serious thinkers. I think this should be talked about and kind of watched, unpackaged, discussed, explained so other people in the space
can understand how this works to the negative and to the positive. Did they just issue new
preferreds today or something like that? Do you know? I don't know. I don't know the details.
Someone else here might be able to answer better than me.
But to my understanding, if the demand at a buck creates a move to the upside, like it goes to $102, they can either issue more to bring that price back down to the peg or the people buying at 102 are just
going to get a lower yield.
That's, that's a good point. There's a, there's like $101. Yeah,
they can buy it. I think at a, at a hundred and one,
I'm going to have to have to look into that, but that's a good point.
I basically wanted to trade between 99 and 101 in that range of like ideally.
But like I get all the points of, you know, it could have a cascading effect.
But I mean, look at how it's kind of performed.
It's only been kind of a thing for what?
Like the last six months or so?
Not even like maybe a year.
STRC, how long has it been going on that's a less than a year that's a good question because my chart only goes back like two months
most of it has been through this like you know downswing that they're able to get this product
up and running and actually create demand for it and it's still in its you know its infancy age and they i'm sure you know he's probably
thought of strategies of what to do in situations where if there is a low demand um like just i
guess potentially raise the yield which they have done throughout like i don't know how high they're
going to raise it to uh so he did the the issue is though he was raising money um when the stock was was priced a lot higher and and um
i think it was above market nav of bitcoin like bitcoin per share i think they calculated but if
he would have raised money now it would be more dilutionary i mean it'd be more difficult to raise
money now so i feel like he was he had a lot of money raised when things were going a little bit
better but what would happen if like that's why i was wondering if he if he was able to raise money on strc today but like what would happen if he really needed to of money raised when things were going a little bit better. That's why I was wondering if he was able to raise money on STRC today.
But what would happen if he really needed to raise money right now?
It would be a lot more difficult.
They actually had a good day in terms of generating whatever the Bitcoin yield off of STRC today.
It was like a record amount.
It was like $1,150 or something like that from it trading at 100 throughout the day today and whatever volume it had.
Yeah, volume was like 116 million shares. And so the question is, did they buy 1,000 Bitcoin with that?
Or did they just pocket that cash to add to his cash reserves or is he going to use that
to pay out the dividends officially but i think ideally they're probably going to use it to buy
especially at these prices i would think so then that's that's not diluting the uh mstr theory
that's the ideal like so that's kind of what the, we like idea behind this instrument is.
So that way he doesn't have to always dilute the MSTR to hell basically,
which he's been, you know, which they've been doing. Um, this is like,
you know,
another instrument to raise money by having the fixed income to appeal to the
fixed income crowd.
So that way they can get through these downswings still be able to raise capital to buy bitcoin without diluting uh the original
mstr shares can you um it's basically just it's basically just that connection oh my god that's
the vibe i'm getting honestly but could you help me understand what you were saying about how the
volume helped them generate money they were able to make money off the off the transactions how
does that how does that work well they sold they sold into that there was a demand today and they
sold into that demand does that make sense so it was some of those shares are trading hands from people who are selling, but I believe the demand, the volume was high enough today.
That's.
You would have to look into the numbers to figure out where it is,
but they were issuing those new shares at the, at the hundred,
at the peg or more in that, in that range.
Okay.
It gets complex.
Have you ever seen the movie inception where it's a dream within a dream?
It just gets complicated.
This is what this space looks like to me is that you got Bitcoin, which is volatile enough as it is.
Then you got a high beta convexity Play with MSTR
And then you stack stretch on top of it
And it's like
It's like a finance web 3
Version of inception
Doesn't mean it doesn't work out
But in the movie the dude's wife
Didn't know which dream she was in
And she jumped off the building
Good analogy man
Yeah I think building. Good analogy, man.
Yeah.
I think,
I think a lot of people are about to do that with this fucking mic. It really,
I think it really just is.
It's the same scam every time.
Like the foot,
like the 2017,
the 2017 cycle,
it was bit connects where you would like,
you would like stake your bitcoins with bitconnect and they
would get like like volatility yields from it right they literally had like bitconnect literally
advertised volatility trading algo as how they got their profits it was really isn't ibit about
isn't ibit about to offer this a similar product? Oh, my God.
I mean, someone correct me if I'm wrong, but isn't BlackRock about to offer an income-generating product for iBit holders?
Holy shit.
I have not heard about that.
Basically, as soon as these things start trying to tell normies that they can put money in to get upside with no downside, and it's in the same pot as something that has infinite downside, that's when you know the scam is off.
As long as it's something like an ETF where it's like, you put your money in, it tracks Bitcoin, it holds the Bitcoin, it could go up, could go down.
That's probably not a scam, right?
But once they start saying, oh no, put your money in this different hole in the same machine,
and it's like no downside, all upside.
Have you seen that meme of the recycling bin where you have like one for general waste and one for recycling,
but the guy just puts his hand through it and they're actually just the same
hole.
I'm tracking.
I kind of lost you there at the end,
but I agree.
Yeah.
It's basically the,
it's like you have a recycling bin with two holes in it.
One is for general waste and one's for recycling.
Right.
But when you actually look at it,
it's just,
it's just one bin with two entrances
that just go into the same pile of crap, right?
And that's basically,
and it's like to try and fool people
and to think, oh, you know,
I'm not throwing my rubbish into the general waste.
I'm recycling.
I'm a good person.
But it just all goes into the same pile of crap, right?
And I think that's kind of the scam
they try to run.
Like, you know, Luna was the previous the previous cycle bit connect was the one before well bit connect was
a bit different but luna luna was definitely that scam the two holes were ust and luna and the idea
with ust was you would deposit your dollars into their protocol and you would get a safe 20 upside
annualized with no possibility of downside and the luna one was you would get a safe 20% upside annualized with no possibility of downside.
And the lunar one was you would deposit your dollars into the lunar hole and you would get basically infinite upside potential.
But you also had infinite downside.
And it turned out that these two holes were just going to the same pile of crap.
It's all the same pile of money.
Stick with me here for a second, Naka.
I want to ask a question in a creative way. If I kill a man,
I'm a murderer, right? And if I kill 50 men, I'm a mass killer, right? But if I kill 500,000 people,
I'm possibly a leader of a country, right? Yeah, you're a war hero. You're a great leader Do you see what I'm saying So have we reached a scale
With this
Where it's not going to be the murderer
He's going to be the god
No I think
If Sailor isn't careful
With his degeneracy
He's going to be sharing his cell with SDR
So okay I'm going to go sharing his cell with SPF So okay
I'm going to go out on a limb here and say you're not
Long MSTR here right
I'm not
Long I'm not going to short it either
I'm neither long
I do not want anything to do with
This like fucking disaster
But we should but
People of
Serious
Thinking should be paying attention to what's going on here because capital markets don't exist in a vacuum.
And what happens in one place has second and third order effects.
And there's also reputational risk for the underlying asset.
But other other markets other markets like triple q's triple q doesn't promise you
No possibility of downside triple q's is you put your money in and that money is handed out to a bunch of real companies
And some of those real companies are actually producing things that people need to buy
Right, like a lot of them like amazon like microsoft like google like, you know facebook like all of this shit is in triple q buy, right? Like a lot of them, like Amazon, like Microsoft, like Google, like, you know, Facebook,
like all of this shit is in triple Qs, right?
So triple Qs will probably, you know, take a hit,
probably take a 30% hit, whatever.
You know, it's just risk appetite.
You can buy the drop, you can buy the dip on triple Qs
and there's your safe yield.
Your safe yield is buying the dip on triple Qs.
That will get you
60%. Oh, yeah. Sure. No.
That's a given. So what does a guy
do in the meantime
if he's stepping off and going to cash?
Does he sit on cash?
Don't you think some of them... Hold it in bonds.
Hold it in bonds.
I'm not asking
for financial advice because I don't play
the space that way, but I'm just arguing for financial advice because I don't play the space that way.
But I'm just arguing in abstract that doesn't some of that capital that's smart and goes on the sidelines waiting for the sale get tempted to go into stretch and grab the 11% APR?
Yes, they do.
Yeah, they do.
Exactly.
That's the point.
That's the point I was making.
And then does that create a bid?
Well, we know it creates a bid.
Does it create a bid on Bitcoin big enough to put in a floor on the price?
Probably not, because what's going to happen is a lot of these so-called smart investors that put their money into, you know, the UST with the safe yield
or the, you know, the, the micro strategy, safe yield, whatever it is. A lot of these people are
going to be leveraged long on a bunch of other crap because they're not actually smart. They're
DGENs. And, you know, these people who are leveraged long on a bunch of other crap and also maybe, you know, don't have like adequate cash savings for their life expenses and stuff like that.
When the general market goes down, instead of adding to the safe yield micro strategy thing, FTRC or whatever, they're actually going to be withdrawing from it.
Right. And they're also going to be withdrawing from Bitcoin.
So they're going to be pulling money out of both holes.
So Bitcoin's acting
as a liquidity buffer for
the larger system
to a degree then, isn't it?
Well,
I'm not sure I'd call it a buffer.
It's like a bucket that when it's
going up, everyone wants to fill it up more.
And when it's going down, everyone wants to drain it up more. And when it's going down, everyone wants to drain it.
But if it's the most liquid thing that I can trade on Saturday because I got the call after the Friday close and Monday is going to be brutal and I need to have a stronger cash position.
Oh, yeah.
Oh, yeah.
So in that sense, it's like, yes, it is more liquidity sensitive, which is why Bitcoin is already down 50% and the queues have probably only just passed.
Okay, so just spitballing here, Naka.
Do you have any predictions for where you see the floor on Bitcoin?
I'm not asking for time.
I'm just asking for price.
I think, yeah, I think it goes to about $35,000. I think
that's probably it. And you think there's enough of a
buy there that
just stops at $35,000 and that's where it gets
bought. But most people won't
have money so they won't buy it. And then
the people in the know buy it.
It's the same as every market.
Most people were
not, even I wasn't all in at the bottom
last market. I still had a cash buffer. And the reason I had that was because I'm kind of poor and I needed
that cash buffer for my, you know, potential real life expenses if the market kept going down.
Now, you know, yeah, like most people will not buy any. In fact, I remember in late 2022,
people DMing me and saying they finally capitulated and sold their e for like eight, you know
870 or 890 or you know, whatever right like and saying I actually know a guy who's a high net worth individual
Who capitulated his entire crypto stack in late 2022 everything bitcoin eith solana the whole lot sold every single coin he had
Right. Why? Well, tax loss
harvesting. It was like it'd be
a big bear market year,
he racks up a lot of losses
and he wants a tax loss harvest
and he said to himself,
it's fine, I'll just rebuy it all in January.
But guess what happened?
Life happened. He had life events, he didn't buy
back in. So basically,
he ended up capitulating his entire stack, doing some real-life shit,
and then six months later being like, oh, crap, I missed the bottom.
I sold the bottom. Oh, shit, what am I going to do?
So this is what actually happens.
And the thing is, if Sailor has basically turned Bitcoin into Luna for boomers,
what will happen is people will capitulate all of their shit when everything looks bad,
when everything's going down.
And if he has, if Saylor has kind of like screwed up badly enough, then he may have
to start selling Bitcoin into a weak market.
And then I think we go below 35.
But I think probably, I think we go below 35, but I think probably
I think we bottom at 35 and as long as the overall economy recovers
I think sailor and that might have probably all right
Although i'm a bit less certain about ethereum a little bit vague about what the recovery looks like. Is it fast?
Is it slow? Do we get a left translated cycle again or a right translated one?
Do we get a left translated cycle again
Or a right translated one
Is it more like the 2013 cycle
Where everyone actually genuinely thinks it's over
And it's like basically
Scrapes the lows for like you know
You say cycles
Are you referring to Hearst cycles
Or are you referring to like
The four year halving cycle
I mean the Bitcoin cycle
Well I don't think it's a halving cycle
I think it's a four-year
kind of like Bitcoin bullish
cycle. Are you familiar with Hearst?
H-U-R-S-T?
No, what does Hearst mean?
It's named after the guy that
is credited for the work
he did on cycle theory.
When people talk about
cycles, that has a different meaning
to different people. Not everybody's using the same term, but the term has a different meaning to different people.
Not everybody's using the same term, but the term has a different meaning.
I was just wanting to ascertain how you defined the cycle.
And you did. Thank you. I appreciate that.
Nakamoto, I'm so happy that you mentioned BitConnect, though, because that's something a lot of people don't know about or don't remember.
I guess the overall market cap of cryptocurrency was a lot lower,
so I think the impact,
the gratitude of it wasn't as
much, but it was massive when you look at
it, because that was when Bitcoin was like,
it was crazy, man, and nobody talks
about it. I think Bitcoin was at
like $100 billion. What was that
quote from that Trayvon James
guy? It was like, listen up.
You haven't lost your money up you haven't lost your
money you haven't lost your fiat money okay oh my god yeah it was terrible yo but like people were
so new there were so many different scams but that was a huge one and i was like one i think i think
it was like a top 10 cryptocurrency at the time right at least it was like 5 Top 5 Yeah it was
It was high up there
So was Luna
Luna was like number 4 or number 3
It's so crazy man
I honestly
Think that MicroStrategy
Is going to be the Lunar cycle
But it's like it's a lot more
It's a lot more kind of
It's a lot more kind of hit and miss
As to whether it actually blows up Because it's on TradFi rails It's hard lot more kind of cut and – it's a lot more kind of hit and miss as to whether it actually blows up.
Because it's on TradFi rails, it's hard to blow up.
That was going to lead me to my next point, Naka.
Another question for you.
So you're saying the balance of probability says this is bad.
Do you have an assessment or a case where it works and they pull it off?
Yeah, I mean, I think the case where it works is probably the default, where basically we have a bear market.
It goes down to about 35K.
People panic.
The Economist publishes an article saying Bitcoin is dead.
And then that's the bottom.
And then it goes up again. and it goes up fairly quickly the bear market is over within say by the end of this year
i think in that scenario sailor is pretty much 100 guaranteed to survive uh at least for this
bear market i think that is probably the default and if everything goes to plan that's okay the thing is i think sailor has basically
he's basically planned for an averagely bad bear market and said my setup is strong enough
that if the bear market is averagely bad if it just averages the same as the average of all
previous bear markets i'm okay and so if that does happen, then he's probably...
And so if a year from now,
guys in fixed income are looking back on stretch,
it's maintained its peg,
and they've always paid out their dividends on time,
don't you think that becomes more attractive
in the fixed income market for larger institutions?
Well, I don't know the fixed income people, so I don't know how degenerate they are.
It's not that they're degenerate.
It's just that those guys, those bond guys, you know, attached to like retirement funds
or large institutions, you know, they're only allowed to do certain things in certain ways.
If Stretch ends up checking those boxes and survives, we're using your positive case here now.
I think a fixed income guy that's looking at buying municipal bonds and maybe getting 4%
looks at Stretch and says, that's a way prettier girl. And I'm going to go dance with her.
I'm going to make one trade.
Aren't Mooney bonds better than 4%?
4% is basically the
central bank.
It's like the treasury, short-term treasury.
I thought Mooney bonds...
When you go into junk,
you get a higher yield, but if
stretch comes out smelling like a rose,
I just think that a lot of
the fixed income market starts to pay more attention that doesn't mean they go full you
know full flash by and like keep their bags over there but you know three to four percent of you
know a 400 billion dollar pension fund uh rotating their bond allocation into stretch is a shitload
of money that's i think it would be very difficult for them to really get to the credit rating that they need
for large pension funds. One, because it's preferred and it's not traditional.
What do you call them? It's just not traditional debt instrument.
The other thing is that they're callable after like 2017 or 2019, something along those lines.
So someone who has insurance you know, insurance fund or
something like that, they're looking for grade A, a company with long history of income, great
credit score, equity debt to whatever their balance sheet needs to look like. And it'd be
very hard for a strategy to get to that point. Not to say they couldn't, but it would take a long
time. So there's a big hill to climb and there's a lot of runway here and a lot of uncertainty and we've seen a lot of examples of people doing it very poorly in the past or very
well if you're if you weren't a bag holder right um so we've seen we've seen this blow up before
we're not we're not new here you know this is just the the new person at the dance and so i just
thank you guys for participating.
Just wanted to start to have that conversation out loud in a space.
I mean, I don't think it's guaranteed that this thing blows up.
Like not in the way Luna was like basically guaranteed.
But I think there is a risk there.
And I think if you put your money in something that's yielding 11 you've got to think
what percentage of the time does this thing yield negative 100 because if it's like more than that's
you know like 11 of the time it yields negative 100 and the rest of the time it yields plus 11
that's probably not that's a great point so do you think the 11% is, I guess the market's going to have to tell us whether or not 11% is pricing that risk appropriately.
Well, let me put it this way. Let me put it this way. I will not be putting my money in sailors' ponds.
Okay. I will buy Bitcoin. I will not put my money in sailors' ponds.
Yeah, I have one share of each of his offerings just so it stays on my board to watch it.
Otherwise, I forget about stuff and don't pay attention.
So I bought one of each when they came out.
No, I appreciate that.
Do you think that the 11% price is for the risk?
Well, I guess the market will decide if the 11% is priced for that risk is consumer.
I mean, somebody's, somebody's going to buy it.
Like somebody's always buying it.
Like somebody, a lot of people in crypto put their money in UST because it was a safe 20% yield.
You see, it was like a safe 20% yield for the bear market.
So no matter what happened, you would always get the money you put in
plus 20% to buy
crypto assets when the market recovered.
See, it's a great plan, right?
But unfortunately, what they actually
got was negative 100%.
So there are always going to be
some takers.
Let me put it this way.
Have you ever been fishing?
Have you ever been fishing?
Have you ever thought, like,
no fish would be stupid enough
to take a worm that was just dangling
there in the middle of the ocean?
Just like way... It's so
stupid. Why would you take that?
Worms are not there normally.
What do you think it is? What could this
possibly be other than a way to make
your life go negative 100%?
But still, fishermen catch fish all the time.
There's always an idiot born every day.
There's a sucker born every minute.
Don't let today be your birthday, right?
Yeah, exactly.
Okay.
Great conversation, guys.
I got to get going.
Kids are coming back to the car.
Love everybody.
Thank you, Because, for hosting.
And thanks, Naka, for bringing in this savage. to the car love everybody thank you because for hosting and thanks naka for uh you know bringing
in this average yeah this was great man i think it's a a great time to wrap up man um dang pretty
good points and maybe this actually uh rhymes with previous cycles, right? Every four years, there does tend to be something huge
as far as sacrifices in crypto.
2014, Mt. Gox, 2018, BitConnect, 2018.
The pool of dead bodies is quite insane for that one, man.
Way too much to go through.
But maybe history does rhyme and strategy gets taken over by,
I don't know, ken griffith or
something like that wouldn't that be something but uh i want to thank all of you all so much
for coming on naka prometheus jeff benjamin dougie thank you all for so thank you all so
much for coming on it's been a great show but guys if you've enjoyed the stream over the last
two hours and you've enjoyed all the conversation want to keep up with
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