In this episode, Avi and Jonah dive deep into the current state of the crypto market, analyzing the impact of political events like Trump's potential re-election, a potential Kamala victory, and regulatory shifts. They discuss trading strategies, the future of Ethereum and DeFi, and the potential end of four-year market cycles. The conversation also touches on institutional adoption, the role of ETFs, and the long-term outlook for various tokens. Thanks for tuning in!

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Timestamps:
0:00 Introduction
2:54 Range Trading Dominance
13:49 Buying an Uncertain Market
23:28 Momentum vs Catalyst Trading
31:13 Perennial Ad
32:45 Trading Election Outcomes
46:24 End Game of Cycles 
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Disclaimer: Nothing said on 1000x is a recommendation to buy or sell securities or tokens. This podcast is for informational purposes only, and any views expressed by anyone on the show are solely our opinions, not financial advice. Avi, Jonah and our guests may hold positions in the companies, funds, or projects discussed

We cannot understate the importance of the world's preeminent superpower, a nation state with basically unlimited resources backing our space, as opposed to actively trying to fight our space like white blood cells fight a virus.

So I think if Kamala wins, we're gonna see a big dispersion trade.

We're gonna see Bitcoin outperform everything else in the crypto asset space like crazy, Bitcoin dominance is gonna go up, all these other tokens, you're gonna see a lot of people throwing in the towel.

Meanwhile, if Trump wins, we might see tokenized equity on the NASDAQ.

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Welcome back to another episode of 1000x.

Market is currently dying, which is honestly to be expected at this point.

I'm sorry we didn't record before the Trump announcement.

But basically that was possibly the most telegraphed thing I've seen in a very long time.

You had 30, 000 coins added to open interest in the week leading up to his speech at Nashville.

And so obviously, kind of no matter what he said, short of I'm buying billions of dollars of Bitcoin, it was the market was gonna sell off.

The good news is that as far as I can tell, we're pretty close to the end.

I think that there's an unwind happening right now because people are getting out and there was a lot of, there's too much excitement going into this, but we're almost totally unwound.

ETH BTC has come up because I think it's slowly running out of sellers and the ETH outflows have actually outpaced the GBTC outflows pretty significantly.

And Solana is still holding up quite nicely.

I mean, we almost tagged 200 and we're back down at 178 but once this unwind happens, we are in a pretty good position.

I'm going to be very, you know, beating the bull drums.

I know I got my bear behind me right now.

But I'm going to be beating the drums of a bull pretty soon.

For the last, you know, I was sweating so hard because I think we were short around 68, 68.5, got up to 69, 70K and I was like, dude, there's no way.

But I was sweating for a bit, now we're good.

Yeah, I mean, we're just banging around in Bitcoin in this like tight little range, kind of 60-bit at 70 or maybe 56-bit at 74, if you want to zoom out a little bit.

It's a wide range in percentage terms, and I think most traders and most asset classes would be delighted with that sort of amplitude.

But we in the crypto world, man, nothing really gets us excited if it isn't a hundred percent instant gratification rally like face-ripper rally and we're not getting it yeah I think you know What you just said is really important You said that short of Trump saying he was gonna buy billions of dollars of Bitcoin on some sort of regular basis The market was gonna sell off.

I would put a little asterisk there and say RFK actually came out and said he was going to do that.

If only, if only, there's a lot of things he would do if his, if he were in the Oval Office.

R, I mean RFK is kind of irrelevant and the dude said he had a brain worm.

I mean, you can't really elect a guy that said he had a brain worm.

I just thought that in the crazy world we live in, like, why not?

Why not vote for somebody who's being controlled by an alien space worm, like in Men in Black?

Trump would have had to come out and announce what RFK announced in order for the market to keep going.

And it's funny, like when I was at Cumberland, there was always somebody on the team who would be like, oh, So and so is gonna speak at break point.

Like we should buy Solana or oh, they're gonna talk about render at this conference.

And then more recently it was like, oh, Ilya is gonna talk to Jensen at the Nvidia conference.

And honestly, These trades just don't work.

Like the thematic trade here is crypto is about to go parabolic.

I believe that for a number of different reasons.

But The near term trade, or sorry, not the near term, the trade of the last basically 6 months that would have made you money is just buy when it dips and sell when it pops, just keep trading, just like range trading.

The problem with that trade is that no participant who's still in crypto is a range trader.

Like every single crypto person who's left standing right now is a momentum trader.

If you trade ranges in crypto, you miss these big blow off tops and you get nuked in 2022 and you're dead and you're out of the market.

So yeah, we have a market of momentum traders getting chopped up in this range, buying high and selling low.

And so I guess it pays to range trade but the question is for how much longer?

It seems like with the giant bear behind you, Abhi, it looks like you are still range trading, but soon you're going

I think it's important to be able to switch your bias in this asset class.

I go from being a momentum trader to a range trader.

I think I've said this 150 times at this point, but there are 2 ways that I look at Bitcoin and I look at crypto in general.

And when I'm thinking about how do you buy it, it's, is there momentum?

And what you have to understand is Most people just stick to the momentum side, but the value side is actually where you make the most money right, so the question is At the price of Bitcoin is at you take into context as Kamala Harris says everything in which you came and before it.

So you have to look at, you think Bitcoin just fell out of a coconut tree?

No, you have to look at the previous price action.

So basically if there wasn't substantial momentum heading into that move, kind of hard to buy it.

And when I look at Bitcoin basically since March 5th of this year, or I guess it topped out on March 13th, there's no trend.

And so it's kind of hard in this type of market environment, you just can't buy the breakouts.

You kind of have to buy the value levels, right?

And the value levels are bottom of the range.

Maybe you can buy mid-range for a bounce, right?

But it's really tough to buy top of the range, betting that momentum will occur because there hasn't been momentum.

So you kind of either have to wait to accumulate your positions lower or you have to buy a true breakout of the range above 72, which is why, again, when it traded 70 the other day, it just didn't really make sense to buy it because it's just not the market environment to, it's just not the market environment to better momentum.

And so my view, the reason I have a bear behind me, is that we just had a huge, huge, huge event, which is the former president of the United States, Alta, who is, according to current betting odds, most likely to become president again, has voiced extreme support for BTC.

So what I think this event did, you know, Trump coming out in support of BTC, it set a floor.

People are going to be more comfortable buying Bitcoin when it's scary to buy Bitcoin now because of what Trump said.

They're going to have some level of comfort buying BTC in a way that they didn't before.

Because if the former president endorses it, basically says, I think it's gonna be worth more than gold 1 day, then you wanna buy value, you wanna buy blood.

Especially since the former president, if he becomes the next president, can announce a strategic Bitcoin reserve, which is, you know, we can talk about this.

There's yet another parallel with the oil market and how that works.

And you know what else is crazy in terms of setting the floor, Avi?

The other stuff that's going on right now, like the technicals, these 2 seconds are very bearish.

Like as soon as Trump spoke at the Bitcoin conference, I think a day or 2 went by, not much time before the Democrats in charge of these offices moved 2 yards worth of Silk Road Bitcoin to a centralized exchange to basically sell.

So you have that and you have these, you know, just Massive outflows from the ETH ETFs kind of the opposite technical effect of the Bitcoin.

So the Bitcoin launch So basically you have like bearish technicals You've been trading sideways the market should be fragile and yet it's kind of not like higher lows what we're seeing.

I think the market has been, you know, there's some segments of the market that have been okay.

A lot of Solana beta has performed well and Solana itself has obviously performed well up until the last 2 days.

Bitcoin itself, I think has been remarkably fragile.

Yeah, SolBTC is on the highs of the year right now.

It was there in, it was there in March during meme mania and then it sunk back down, but now it's right back to the highs Solana's Teflon right now.

I think, I think that strength is going to continue.

What do you think about, what do you think about ETH and and the ratio here?

I mean the ETH ETF has been really really depressing Yeah,

I mean basically what I think about ETH goes back to what we were talking about.

I think that what matters isn't like who wins the, like, let's talk about what actually impacts the price of ETH.

What I think impacts the price of ETH is will there be regulatory clarity under the next presidential administration for crypto assets, or will the current paradigm of let's just throw a wrench in their plans and keep kicking the can down the road the gensler way, Will that continue?

So basically, regulatory clarity, yes or no.

Basically what I did was when I like to put on macro trades, I always like to try and work out a just probability tree.

Under Trump, I assume that an SEC overhaul is 95% likely.

Under Kamala, I assume it's like 25% likelihood.

And then for each of those like SEC overhaul, yes, no.

Like if there's a new SEC, you know, with each scenario, I basically cuffed some probabilities for regulatory clarity, very high under a Trump SEC overhaul, still high under a Kamala SEC overhaul, very low if Kamala doesn't overhaul the SEC.

And then I basically just put price scenarios for Bitcoin, ETH, and Solana on each of those sort of like SEC overhaul probabilities.

And I came up with some forecasts and basically that's, it's not an exact science, but it's something to lean on when a trade is going in your face.

You can look at these little spreadsheets that you made and see if the assumptions still make sense.

And basically what I came up with is like, if the SEC finally gives a measure of clarity to builders and projects on what is and isn't a security, and immediately like snap your fingers overnight, ETH and Solana are the protocol layers for the internet of value.

Like slow, staid financial institutions will probably stick with ETH because it's stable and they don't need like high-performant blockchains because they're working with fucking Swift and anything is better than T plus 2 5 days a week.

ETH is way better than that, even though it's not Solana.

And then Solana is like a micro-payments infrastructure thing that could turn into something huge, stable coins, faster value movement, all this other stuff.

So suddenly a whole world, a whole internet of value becomes viable once financial institutions and Web2 companies can reassure their employees and their management and their shareholders that they're not gonna get sued by the SEC for doing their thing in crypto.

And that's why I think if we get stuck with another 4 years of Gensler or Gensler 2.0, ETH is gonna be absolute trash.

It's gonna look the way that XRP looked after its big you know time in the sun.

Meanwhile if we get a new regulatory paradigm like all the pipes have been built institutions can just light up ETH and they're ready to and they will.

Yeah, I think that's I think that's fair.

I think this is at the end of the day For better for better for worse.

It's gonna take a long time for people to come in But at least the infrastructure is now built in order to do so So once people decide to allocate to ETH, once people decide to allocate to BTC, it's going to be easy to do.

I think there's still a lot of uncertainty because as you said, you had to build a spreadsheet out for this, right?

Will the US be friendly towards applications built?

And so you need to see if Trump gets elected, you need to see what happens if Kamala actually switches her stance.

Otherwise, you're looking at a lot of uncertainty.

And I don't think there are enough people left that are willing to buy an uncertain market.

I think basically everyone out, you know, if you look at the numbers of who owns crypto in the US, it's pretty massive.

substantial portion of the people that invest in the stock market, also own crypto.

And so the way that I view it is it's about the level of allocation and retail and your average person probably is already reasonably fully allocated.

I don't know how much more as a percent of portfolio your average person is going to increase their Bitcoin holding.

So it's really about the family offices of the world, the institutions of the world, the big money of the world, and they're not going to deal with uncertainty very well.

I mean, ultimately, I think what needs to be underlined here is that you have a lot of institutions, family offices, bigger pools of capital.

Like, yeah, like you said, the retail de-Gent are either in or they're out by now.

But let's just take the pool of family offices or even basic hedge fund strategies that touch crypto, those guys are all ready to go.

So if Gensler gets fired, if Trump starts buying Bitcoin, if there's a new crypto friendly regulatory framework, I think they're ready to pull the trigger.

I don't think it's gonna be like 2021 where we were all sitting here like, the institutions are coming maybe, but we don't know when.

They will show up the second they know they're not going to face legal risk.

Nobody wants to, because if you're a family office and you want to get involved in crypto, your concern isn't getting sued.

Your concern is like, does your qualified custodian support Bitcoin?

Does your JP Morgan, like, can they custody your coin?

I think family offices are like, if I had to guess, my gut feeling is that family offices are behind the spectacular inflows into the Bitcoin ETFs like iBit, because custody is not an issue there.

But I think you'll start to see more adventurous, younger, wealthy, techy types directing their family offices to go out the risk curve and buy other tokens, riskier tokens once they know that they can get solid custody and they're not going to get worm hold.

You know, it's it's it's all it's all like, either contingent upon institutional clarity, or it's like institutional adjacent stuff like custody and lending and all the other things that you want to do with it with a coin to make it more capital efficient.

Yeah I mean the capital efficiency is actually actually key and that's 1 thing that I hope will happen with the ETH ETF as well, which will allow people to buy more ETH, is that if you can borrow against these things, then you're good to go.

So the way that I'm currently thinking about the ETH ETF and like when do you want to buy a ton of ETH BTC is when you start to get that leveling out of the ETH flows.

And when you actually take a look, ETH is being drained a lot faster than GBTC was being drained.

And so I think that that sell-off, the full sell-off on ETH has probably already happened.

And What we're waiting for now is we're just waiting for the last little bit to drain out.

We actually, the news on the ETH ETF was sold a lot faster.

I think the BTC ETF news trade bottomed on day 12.

So I think the market's just getting more efficient at pricing the trade.

That probably is going to happen with Solana once it happens.

And then BTC proceeded to rip 92% in 50 days post.

So I'm of the mindset that we can probably see a pretty strong performance from ETH over the next, I'd call it mid-August is when I'd start to turn pretty bullish on ETH.

I mean, I agree with you tactically, but I think that it's important to note that ETH, ETH-E was never like this benchmark important trust in the space, right?

Like it was always the sort of redheaded stepchild of GBTC.

GBTC had like tens of billions of dollars of AUM.

It was this massive trade where you could like create it and then sell it at a premium versus the Bitcoin that you had in there.

And it was this arbitrage and it was like dominated news flow back in the previous cycle.

And it was like this massive thing that then entangled a bunch of people.

They pledged his collateral as part of the FTX estate.

It was like this big story and this big macro asset and this big way for people to, retail people to buy Bitcoin in their 401k 7 years ago.

Now, like ETH never had that cache, right?

ETH was, I think ETH was just a way for DGENs like us to basically replicate the GBTC discount trade on a shortened timeframe.

And so the rapid outflows right now aren't that surprising.

It isn't like something that's as sticky as GBTC was.

So I don't know if I'm as bullish as you are based on like price action, mirroring what Bitcoin did post GBTC, Bitcoin ETF approvals, but you might be right.

I mean, I think I'm bullish for other reasons.

There is 1 other big reason that I didn't bring up that I'm bullish both ETH and Bitcoin and also Solana to some extent, which is, again, I do think that Trump is going to get elected.

I do think his odds are being undervalued by polymarket right now.

And 1 thing that he's going to do, both he and Kamala will do, whoever wins, is probably devalue the dollar.

Trump wants to do it as a mechanism for trade, basically to make our exports appear more cheap and good value to foreign consumers because he's obviously it he's he's obsessed with trade balances or imbalances So weaker dollar means Stronger Bitcoin and the other 1 with Kamala just to finish the thought very quickly, and then I'll stop rambling.

Kamala, I think if she wins, we can expect a repeat of the Joe Biden stimulus orgasm of 2021, where it's just like, we're going to print trillions to pay off student debt We're gonna print trillions to you know, do social social welfare type stuff like, you know Preschool and after-school care and that kind of stuff You just just wait for the printing machine to start humming and that like bitcoins a great deep basement head as well

when you think about the election people got really excited when Kamala got installed and I think there were some polls that came out saying that she was leading Trump.

The reality is that politics and markets and life work in a very similar predictable pattern, which is that whatever the most recent thing to happen is, is the most important thing in people's minds.

You saw this with the Trump assassination.

And it's a few weeks later and nobody's talking about it.

Kamala, no, Joe Biden steps down and Kamala steps up.

This is new, this is fresh, this is exciting.

In 2 weeks, people are gonna forget that this was this crazy event that happened, that Joe Biden stepped down, right?

And this was encapsulated, somebody on Twitter, I saw a funny post, talked about the President Garfield's assassination.

And they said this will be taught in history books for years to come.

And now I bet you like 75% of people don't even know this guy, right?

isn't Garfield an orange cat who's Garfield

Garfield and Andrew Garfield never heard of him exactly yeah so James Garfield sorry James Garfield 20th president of the United States was assassinated.

On September 19th, 1881, the shooting occurred less than 4 months into his term as president.

Anyway, long story short is that every event that you think is going to be life-changing, every event that you think is going to impact your life for an extended period of time, everything that you think is going to, every event where you're just like, oh my god, I can't believe this happened, I almost guarantee you it will fade into irrelevancy, which is kind of nuts to think about, but it just happens so often.

I mean, think of all the announcements that seemed like huge in the moment that in hindsight are no longer that big.

Elon Musk selling Bitcoin off of his balance sheet in May.

Yeah, catalyzed some sell-off, but then 2 months later, we were right back to where we were before, and Elon loved Bitcoin again, right?

And so you have all these things that happen that don't really impact price in the long run, they impact it in the short run.

That's not to discount what just happened.

That's just to say, you know, don't overestimate the impact of these events.

The world tends to just go in a direction.

And Trump, my personal opinion, is the better candidate than Kamala.

And so despite the fact that she got a recent boost, I think he still

I mean, OK, So when I talk about Trump trades, I'm talking about episodic macro themes and the probability weighting of those things.

Catalyst trading is like, oh, I'm going to buy Doge because Elon's going to go appear on SNL.

Oh, I'm going to buy NEAR because Ilya's going to talk with Jensen at their conference.

I think I'm a decent episodic macro trader.

And so the way that I avoid killing myself during these periods of chop where it's like, oh, some bullish catalysts come up and we rally up to 70K and some bearish catalysts send us back to 65 is I stop trading.

And then in like in big moves, I do okay.

Or if I get it dead wrong, I'll just get out of the market and sit on the sidelines for a while and then get back in when the price is more in my favor, when the risk reward is better.

But like I'm a macro trader, a macro momentum trader.

You seem like you have this ability as a more active guy to kind of switch back and forth between range trader and momentum trader.

It's just being a crypto trader, I think, because unless, You know, if you're a crypto trader and you want to actively trade BTC and ETH, you have to build that skill set.

You have to know when is time to set and forget, and you have to know when it's time to pay attention.

And this is just by virtue of, you get it after a while.

It can be subjective and you just have to understand what to look for in these certain types of situations.

I mean, it's actually, I'll give you an example.

When you're looking at Bitcoin and on a one-week time horizon, I'm staring at the one-week chart, and then I stare at the four-hour chart, and then I stare at the

hour chart, and then I stare at the 4 hour chart and then

I stare at the hour chart and then I start the 5 minute chart.

Basically, every micro dip gets button up when every hundred dollars goes down and then boom, it gets swallowed.

And that's been happening for a week straight, that's momentum, right?

And that's what kind of what happened in October of last year.

If you look at the period of time from Tuesday, October 24th to November 24th, which is about a month period of time, there was a full month where every dip would just get slurped.

Will you call that a doji, a downward dangling doji?

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Trading Crypto's Election Year | 1000x