Kind: captions
Language: en
Arthur Hayes welcome back thanks for
having me glad to be here dude always a
pleasure especially at this point in the
cycle I think today's episode is going
to be a lot of fun and I want to start
with why are you predicting that the
Trump presidency could potentially print
up to 10 trillion dollars possibly
taking Bitcoin as high as a
million so I think it goes back to very
simply and I don't really think this is
a trump thing if Harris had won her team
would have done something similar maybe
it would have looked a bit different but
the effect would have been the same at
the end of the day Trump campaigned on a
progrowth policy uh he wants to bring
back industry to America he wants to
reinvigorate the
military and none of this can happen if
the majority of you know Goods produced
in America or
intermediate supplies are coming from
China not to say there's anything wrong
with China it's just that the entire
American industrial base depends on
stuff coming out of China whether that's
refined reare Earths whether that's you
know you know supply parts or whether
that's finished products in in of
themselves and so you've seen sort of a
decline in American industry starting in
1971 when Nixon took the US off of gold
standard sort of went to hyperdrive in
1994 when China devalued the Yuan and
started a very concered meralis trade
policy and then 2000 was the Cuda gra
when the US allowed China to join the
World Trade Organization and gave them
essentially tari free access to the
largest consumer Market in the world and
China to their credit was very um
diligent and built up an industrial base
that at the present moment has the
highest quality Goods at the lowest
price and we've seen that in the
automotive industry I saw a chart the
other day it was um percentage of China
Chinese cars in the global sold glob
I think about 20 years ago was 1% today
it's
40% if you go and I live in Asia and so
you you go around the major cities you
see the byd cars they're excellent
they're beautiful they run well and
they're cheap and so even if you have a
massive tariff on a Chinese automobile
it's still the best price car at that
price point for that particular amount
of quality and so the they're they're
the country to beat and so Trump is
campaigned on we want America to have
the type of manufacturing jobs that
probably people on this program or their
parents or grandparents had in sort of
like 1950s to you know early 1980s sort
of
thing okay so why does that lead though
to the need to do 10 trillion is that he
is he going to do things like the chips
act where he's going to specifically pay
companies to build manufacturing here in
the US via tax breaks and things like
that yeah so essentially us is going to
copy the Chinese model which is uh State
sanction either cheap credit through the
banking system or tax credits or direct
subsidies so Trump needs to make it
economically feasible for an American a
European or even a Chinese manufacturer
to say okay instead of building my
Factory in China Vietnam Mexico whatever
I can build it here in America and this
good is going to be price competitive
with anything globally because I'm
getting these massive government tax
breaks or subsidies or I'm getting
extremely cheap credit and so I wrote an
essay about this and I went through the
how the money moves for the banking
system to basically show that what Trump
was going to do is allow the US
commercial Banks to issue credit which
is essentially creates money and they'll
do this because it's profitable because
companies have the simplicit government
back stop of subsidies tax breaks even
tariff protection so it's exactly the
same thing that Japan and China did to
elevate their economies post World War
II and so if you take a look at the
amount of money that is needed just to
reduce sort of the American debt to GDP
down I I think I forecast something 7 or
80% from the 130 that is today I
estimated it could be in the magnitude
of 10 trillion obviously I don't know
the exact number but that's the
direction of travel if you think about
the amount of implicit credit that needs
to be created that need to be given to
American or American you know owned
factories in America to do the things
that Trump wants them to do which is
make Goods in America decouple the
supply Chains From
China all right given that they'll be
using the money theoretically on
productive things like manufacturing
infrastructure here in the US do you
still think that it's going to have the
kind of inflationary impact that a
million dollar Bitcoin would
predict absolutely because at the end of
the day the first amount of money that
goes into doing these sorts of things is
used productively and then it gets out
of hand because a company oh I have I'm
the only one who can get cheap credit
I've done all the things I can do to
bring all the production that makes
sense economically onore in America but
because I have this special I don't know
credit arrangement with the US
government and its banking system I'm
going to start going into the financial
sphere so whether it's property or it's
trading stocks or stock BuyBacks and so
the credit is always misallocated you
could take a look at China as a poster
child you know the credit was absorbed
in a profitable way you know probably
from the 1990s up until you know mid
2010s but then that was the development
model they didn't know how to change
from something else the credit kept
coming the banks kept giving you know
state owned companies and those were in
the in the U approved Industries credit
and what did they do they bought
Apartments they became you know real
estate developers they were punting
stock in the stock market um and doing
all these sorts of things buying trophy
Assets in the United States and Europe
wineries like you know large buildings
all these sorts of things these
companies had no business doing that but
they had the cheapest Credit in the
world and therefore they were going to
use it and their investors expected them
to use it and the same thing will happen
in the US the first amount of credit
will be used productively and then it'll
be misallocated I like to think that
100K Bitcoin is the demarcation point of
where any naysay ER it's just dead like
that conversation is over you've got
your straggler and Peter Schiff who's
just not going to let it go uh but it it
really seems like that argument just
doesn't make sense anymore with the
level of institutional adoption that we
have uh the height of the the amount um
so for it to get to a million dollars
where is the the capital flowing is it
purely from people that are aware that
inflation is happening or is this a
continued cultural momentum of adopting
a new asset class so the first thing
people need to understand is that the
the price on the screen is the marginal
price of the last trade it's not every
trade that's happened and so it's the
the simple example is how do you become
a trillionaire well you create some
fictitious company with a trillion
shares and then you sell one of them to
your friend for a dollar now you're a
trillionaire right the marginal price is
a dollar on trillion shares therefore
you're a trillionaire so I'm not saying
that there needs to be you know a
million dollars traded every day at that
bitcoin price I can see $1 to trade at a
million dollars and that's a million
dollar Bitcoin and that informs our
psychological perspective and what we
think Bitcoin is worth so with that in
mind what I'm talking about is the
marginal flows into Bitcoin well the
supply of Bitcoin is fixed we know 21
million will ever be produced however as
you have people like Black Rock Michael
sailor at micro strategy long time
holders like myself and others people
who are just getting into the the game
now and you know believe in a future
path of Bitcoin over the next 5 10 15 20
30 years are they going to sell why
would you sell Bitcoin for fiat currency
if you implicitly believe that the US
government and every other major
government is going to increase the
amount of that fiat currency at Infinium
that's the reason why you got into
Bitcoin so as the price Rises there's
less people who want to sell it and if
we have this institutional adoption
through the ET f s and other sort of
corporate uh Finance
Vehicles those are
sticky uh forms of holding which take
Supply out of the market which means
it's very easy to have a very
exponential rise in the marginal price
of Bitcoin the last traded price of
Bitcoin so I think that's one facet of
just how a micr structure of a market
works when you have a fixed Supply and a
holding base that doesn't want to sell
it against an asset that can be
infinitely debased and then the other
side you have the United States trying
to Res resore industry issuing credit
you have China has a property bust and
they want to protect their industry and
they're starting down the path of
quantitative easing they just recently
announced that they're okay with
allowing their currency to
depreciate because they believe it's
going to help them in their fight
against the the new Trump 2.0 tariffs
you have the European Union Statesmen
like Mario dragi and Emanuel macron open
ly saying that we need to print more
money to revitalize the European
industrial base and you have Japan which
continues to run the easiest monetary
policy of any major developed Nation so
if you take a look at the entire world
in terms of the largest four countries
in economic blocks they all are printing
money for various different reasons
that's only going to continue it's
accelerating in fact and so we have a
supply diminishing supply of freely
traded Bitcoin with an expanding supply
of fiat currency looking for a home and
if we believe that more people are
changing their mindset to say okay
crypto it's survive 15 years it's going
to be here for another 15 20 100 years
whatever I feel okay thinking that this
is going to be a store value I can use
it to pay for things when I need
therefore I'm going to take two three
four five 10% of my retirement income or
savings and now start buying this asset
and so all these things come together
and that's what creates a marginal price
of a million dollars per Bitcoin how
fast do you think we get
there I I don't know three three to five
years now uh you had called in one of
our earlier conversations you had called
100K Bitcoin which at the time I
remember seemed very aggressive do you
feel like you were pretty bang on with
the timing to get to 100K yeah roughly
you know December is we're here it's 100
104,000 or whatever it is we'll see what
it ends the end of the end of the year
when people do their sort of tax
optimization sort of things but I think
you know out of the many predictions
that have gotten wrong I got this one
right well yeah I mean look I don't
think anybody's going to get them all
right but directionally this one seems
like you've had your eye on it for a
while uh so when I talk to Michael
sailor he really looks at Bitcoin as
like a physical law of nature certainty
that money wants to go from high entropy
where it can be inflated there's all
kinds of chaos happening to
effectively the price I don't know if
he'd use that word but certainly uses
entropy and that it just naturally wants
to go to a low energy state where
there's um less manipulation of the
currency where it's it's going to be
more static from a buying power
perspective um do you see that same
inevitability do you look at this as a
physics problem or is this the inflation
cultural problem from your
perspective well there's a I think the
econom economist who may it's a Gram's
law um you spend back bad money you say
you hoard good money right so what's the
bad money the bad money is fiat currency
US dollar euro Yen Chinese Yuan what's
the good money
Bitcoin gold to some extent and so what
are people doing they're spending the
Fiat they're saving they're hoarding the
Bitcoin the gold right so I think that's
called gresham's law could be mistaken
on that so yeah you could put in a
physics term you can put it in sort of
an um economics term you can take a look
what happened in sort of like why are uh
Germany during their hyperinflation
during the 1930s in terms of people got
their their their marks they spent them
as quickly as possible but they were
also hoarding gold um because they knew
that was a real that was a real money uh
at that time so we're seeing the similar
sort of thing just starting today and
yeah sailor can put it in sort of a
physics terms but I think in sort of a a
social cultural norm we've seen this
before every time any major civilization
has failed and they always put money
they always debase the currency whether
you're in a gold standard or not it's
the same thing over and over again if
you read enough history it looks the
same it feels the
same the reason I delineate that is if
this is a physics question then sailor's
idea of getting because he puts the base
case over the next 21 years that
bitcoin's going to hit 13 million I
don't know how you feel about that
number but for him it's you can create
inputs and outputs and see how rapidly
the money is going to go from sort of
that bad state of Fiat into the more um
sound
physics money of Bitcoin uh so he
likened it to a waterfall and it's like
once the water starts pouring over the
edge you know as long as the water line
is above uh the channel for the
waterfall it is going to drain out back
to equilibrium it is a matter of physics
for him whereas if it's cultural then we
are still open to what um I Heard Ral
Paul referred to as the path of most
pain because this is the the thing that
scares me when I look at this sailor is
it's ballsy man don't get me wrong and
I'm as inspired as anybody else seeing
what he's done uh but nothing seems
guaranteed in the future and so to treat
it like a physical certainty I don't
know man I just I don't have the coones
I
guess I I mean I think you have to take
sailor with a pinch of salt and
understand where his position that he's
coming from he is essentially issuing
dollar denominated bonds and you know I
guess infinite Supply if he can and and
buying Bitcoin and every three to five
years he needs to roll over a certain
portion of his debt and if his stock
price is below the conversion price of
his convertible bonds he might have an
issue so yes he wants the market to
believe it's a physical certainty
because then you're not going to
question the ridiculous price that
you're paying for his stock um I more in
sort of the the cultural phenomenon sort
of Camp we're humans we're going to over
in the short term we're going to say oh
wow you know bitcoin's a million 100
million whatever the number is this is a
physical certainty this is the last
cycle ever you know you hear those sorts
of things on on the internet but the at
the end of the day we'll get ahead of
ourselves we'll we'll forecast some
crazy dystopian scenario of some crazy
hyperinflation and then if you start to
underperform the craziness
then the price of Bitcoin looks a little
bit High maybe it comes down a bit and
so I think that um markets go up markets
go down we as humans were over
optimistic and over pessimistic we're
not at that stage yet but I definitely
could see at a point of the cycle where
there we believe that there is no way
that fiat currency could ever fix any of
these problems therefore Bitcoin is
going to Infinity you'll hear people
saying this the last cycle and all this
kind of nonsense and then the price will
dump 90%
so I am more in the sort of cyclical
nature of of markets that's the physical
certainty in my respect based on human
nature yeah I uh I think the safer bet
is definitely on the human nature side
but I mean look shout out to sailor
obviously at at this moment in time he
looks phenomenal it's unbelievable what
he's done so I'll use my words I I have
a feeling he wouldn't love this
description but the way that I look at
what he's done with a micro strategy
stock to what you were saying is he's
basically taking taken a normal stock
with a treasury in Bitcoin layered a
casino on top of it so that people can
come in and play whatever Risk game they
want to play if they want the ultra High
Vol he's got stuff on Leverage and so
the the volatility there is just
absolutely Whiplash Manic and so for
people that want that extreme volatility
they can be in there but he's also got
things where he stripped out a lot of
The Upside but also a lot of the
downside and people can get into that
and so it's I mean that move alone
almost regardless of what happens to
Bitcoin in the long run the genius of
being the first Bitcoin treasury mover
layering that equities component on top
of it which is what I refer to as the
the casino uh brilliant absolutely
brilliant yeah absolutely I think from a
as somebody who loves you know Finance
what he's done in sort of a corporate
finance situation with his convertible
debt how he's termed it out how he used
his access to the you know corporate
debt markets in you know the United
States to be able to issue
0% uh coupon convertible debt is a
genius move uh he needs volatility
that's what you're trading so go up go
down Bitcoin needs to move if Bitcoin
stops moving a lot then the micro
strategy trade might get into a bit of
trouble but again I wouldn't worry about
that now that's three to five years sort
of down the road situation right now
it's it's the bull market so you know
when the uh When the Music's playing you
got to dance no doubt all right talk to
me about the dance so high volatility
this was something that I didn't really
uh appreciate nearly enough volatility
seemed bad I like that the government
was stripping volatility out of
everything but the more that I listen to
you the more I realize that volatility
is the game uh that if you're trading
that volatility is the light around
which all the moths gather explain
volatility to us why is it good so at
the end of the day what is life life is
risk right every moment that we exist in
this universe you know I wouldn't go so
far to say this but some people say the
universe is trying to kill you right you
enter this world you we all lose man
whether it's trying or not it gets us it
gets us in the end right and
so at the end of the day we're trying to
make these calculations all the time
about how do I structure my life so that
I can survive longer in this universe
and so at the end of the day I'm I want
to have a strip of bets that where the
upside when I'm right is you know
greater than what I pay to take that bet
intrinsically so our life is a strip of
options and so the more volatile the
situation the more valuable the option
but the game name of the game is how do
I pay the least amount of Premium as
possible in life so that I make
decisions where my you know getting it
right pays me more and sort of you know
feel good things versus what it cost me
to to take that bet so we live in a
volatile Universe volatility is our
friend suppressing volatility is not
natural and so government says hey I
through my ability to have you know
legalized violence and kill people
because they don't follow my rules I'm
going to protect you and so let me
smooth out that life curve for you do
what I say is is is essentially the name
of the game for for any type of
government and there is some benefit to
that but Tak it to the extreme which is
what you know central banks have done
over the past you know 50 years or
whatever it is then you start to get
into this unnatural state where the
volatility is so low relative to what
the natural just es and flows of life in
this universe are and and then things
just blow up right and so you think
you're safe and then you get a 2008
housing crisis or you get you know the
European crisis in
2011 or you get the regional banking
crisis in the US in
2023 and these are all sympatic of
government saying we're just going to
print a bunch of money and suppress
volatility but volatility is natural we
want volatility we want to construct a
situation where we have volatile upside
outcomes with capped downside and that's
really the goal and so that's what you
know Bitcoin and crypto really
represents is there's this outcome where
all the Fiat money in the world needs to
come into Bitcoin obviously that's not
going to happen but you can think of
that as sort of the extreme example and
your cost is the price that you pay
today for Bitcoin so some people paid a
dollar for Bitcoin back in you know 2010
and if they held on now it's worth
104,000 right but the most I could ever
lose was a dollar and so why wouldn't
you take that bet you you know how much
you're going to lose it's the amount of
fiat currency that you sold to buy
Bitcoin and so you can sort of self-
select your risk profile based on your
own situation but there's always an
amount of money that you can really to
lose to earn the 10,000 100,000 million
dollar X return on something like
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product found plus where people go wrong
is when they hear volatility they think
it's a one shot as in Oh either this
goes to zero or it goes up to 104,000
but that's not the volatility that
Traders seek the volatility Traders seek
is I want highall in a day I want it to
Whiplash up and down up and down up and
down up and down rapidly and that way
here's how High read volatility I want
that rapid whip saw up and down because
I'm smarter than the [ __ ] that Panic
sold when it went down and so I know I'm
going to buy low and sell High and the
reality is that um most people are the
buy high and sell low guy so given that
hard fact of life are people foolish to
like the high
volatility well people are foolish to
like the high volatility and have a high
frequency of trading so what you
described is somebody who was actively
trading in a very volatile situation
I'll make an there this is a very simple
example it's called volatility drift
this is why you should never ever ever
buy any leveraged ETF they're terrible
products I should know I've structured
many of them so you essentially if I
take something that's 100 start a
nominal price of 100 and it goes down
10% goes down to 90 and then I go up 10%
I go up to 90 99 so I've on an
arithmetic basis gone down 10% gone up
10% but I'm down $1 right that's
volatility drift and so when you're day
trading in and out in and out and out or
using these products that are sort of
these daily volatility resetting
products you're exposing yourself to
what we call negative Gamma or
volatility drift and that's not good but
if you say I'm a Buy and Hold type of
person you're the the Warren Buffett
type of person and you're going to
compound over time by systematically
trying to reduce your total your your
expected loss if you get it wrong but
just keep keep stay in the game if you
stay in the game then over time you
should do well but the more you trade
the more money you lose and that's just
a fact and so I think the fallacy is oh
I like high volatility I want to go to
the financial markets casino and start
trading and then obviously you fall prey
to the simple nature of like you know as
humans we have no idea what the future
holds and so trying to trade on sort of
like a very short time frame is a recipe
to lose all your money of course there
are these few Traders out there who are
the standout exceptions to that and
they're sort of paraded across the um
Financial mainstream media oh look what
this guy did you know he turned a
thousand dollar into a million dollars
day trading every day here's this system
do this do that pay me a bunch of fees
right
so day trading unless you're very very
good at it you will lose lose all your
money and yes the volatility is makes it
fun so if you approach it as an
entertainment situation like you go to
the casino you're going to play crops
you know you're gonna lose money but
it's fun I'm gonna have some drinks hang
out with my friends approach financial
markets okay I'm gonna go trade on my on
my brokerage account or my crypto
account or whatever tra of meme coins
I'm having fun my price of fun is the
Thousand doll that I'm going to lose
over time but it's fun because I know
yeah maybe if I get really lucky it
could turn into a million dollars but
over time I'm going to
$1,000 yeah uh I think that's actually
the accurate way to think about most of
the uh certainly the stock market most
of Finance in general is that and the
more I study Finance the more I become
convinced this is all a game of gambling
uh and it's just a level of
sophisticated gambling I won't derail us
on that because I really get soap boxy
about this uh but I would just like to
quote what you just said a second ago
the more you trade the more you lose now
I don't know how much trouble that's
going to get you uh for distilling it
down like that but I think it's really
important for people to understand that
all right I want to keep going on
volatility so what is it that makes for
volatility is it somebody panics and
sells is that the only thing that pulls
the price down well the price can go up
too so I think people ass get more
people want into a finite thing but what
I want to understand is to the downside
what what makes some because when
somebody says High volatility you're
never going to get an only up obviously
everybody wants that they want the only
up volatility I get it that's the
fantasy but that's not the reality so
high Vault Traders are all for something
that whipsaws up and down so I want to
know what causes the down because I
think it's someone
losing yeah so it's it's basically
the the fear of loss and how you feel
about losing money
is more is stronger than the amazing
feeling you make money right so I'm more
afraid of losing the $100 and making
than the the joy I feel when I make the
thousand and so as the fear of loss
kicks in oh [ __ ] I need to make sure
that I have this Capital oh that was my
car payment that was my mortgage that
was my kids college fund maybe I
shouldn't have been yoloing on on that
Meme stock let me just get out of this
right now to like make sure that I have
that some of that Capital left and
that's the natural human reaction which
caus you to just like jam that cell
button as soon as you see things aren't
going your way which is obviously not
what you should be doing you should be
able to wear the Up and the down
volatility and equid but that's not
human nature at the end of the
day yeah so uh this is why anybody in my
community that can hear me speaking as
long as you understand that high
volatility means when it goes down
that's somebody losing it's somebody
panicking that they've already actually
lost or they are actively losing or even
worse they've been liquidated and so it
all goes to absolutely zero if they were
trading on Leverage so seeking out High
volatility is to seek out maximum pain
someone in there in in the high
volatility there are people losing and
running for the exit and as long as you
understand the more you trade the more
you lose great if you see yourself as
somebody playing craps I love it but man
when I talk to my own employees uh which
gearing up for this episode I had people
walking in because they were listening
to us prep uh for our time together and
so once we started talking about
altcoins all of a sudden people are here
they're like What's that ala man you're
talking to Arthur we want to hear about
it and I'm just like guys I need to know
that you know the game that you're
playing and as long as you're treating
this like a weekend to Vegas I'm here
for it uh but if you're not I get scared
um two things do you know have you heard
the Bruno Mars story no so The Story
Goes I cannot verify this but there are
people online verifying it saying they
were there so he's doing uh a stint at
uh MGM
performing and basically people are
saying he's an indentured servant
because he lost I think 52 or 53
million at the casino and then when they
called him he said I I can't pay it so
they said well guess what have an idea
yeah so I mean look it it's rumor I
can't verify it but it's one of those
where people are talking pretty openly
about I was there this is what happened
uh that that's the kind of thing that
you can end up in real trouble these
these losses can stack super fast um
okay so that was just a fun bit of uh
info but now I want to talk about um uh
Murad do you know him yes so I we we
were on a podcast together maybe a few
weeks ago or a month ago yeah so I'm
familiar with him we we uh chatt for a
bit it was a very entertaining um
chitchat okay so he's got a new theory
on Meme coins and how they really do
offer utility and he he has a very
interesting take on what they are um
before we get to that what's your take
on Meme coins and altcoins uh what do
you think is going on and are they
heating back up right now so number one
the authorities globally are trying to
restrict volatility and channel you into
their preferred investment products
which are government bonds which you
know we can talk of ad nauseum about
this are intrinsically going to be
debased insanely amounts they want you
to go into the you know super safe you
know bond fund that's going to get
crushed by inflation that they have to
use to write their balance sheet so
that's what they want you to do but
people are like [ __ ] this I I want to be
EXC I want something exciting I want
something where I believe that the game
isn't rigged and so you get the GameStop
situation that started kicked off in was
a 20121 in January now we have meme
coins which are intrinsically all
worthless no one's out there saying
they're worth anything they don't have
no utility they do nothing they
literally are just a manifestation of
human culture that we can trade
and so what is the most important part
of human culture the parts of human
culture that everybody is participating
in has the most attention so when you're
trading mcoins and a lot of altcoins
you're trading attention is this
community able to grab more and more
attention of the world of the investing
public is their their joke their video
their image their tagline is it catchy
do I hear more and more people saying
viewing these memes if so okay I'm going
to buy this particular mem coin and
it'll go up in price as the attention
that it Garners increases and then
obviously all cultural things diminish
over time at some point that cultural
artifact becomes irrelevant the zise
changes and then it falls precipitously
in price and so what mcoins are are it's
essentially Humanity human culture
attention economy encapsulated in this
247 trading Market that anyone with an
internet connection can access and
that's what they are and that's why
they're so much fun to trade because
this is the first time in human history
where literally oh I saw that on social
media my friend was talking about it I
think more people will talk about it in
the future therefore I will buy this
meme coin today because I know others
will buy more of it
tomorrow
the very succinct summation and I think
that that is really an orienting
mechanism for people mean coins are
useless it's tradeable culture
uh what I want to make sure people don't
miss in what you said is that while they
may not have utility it doesn't mean
that it's not fun to get in and trade it
doesn't mean that this isn't a huge
moment with billions of dollars uh
flowing in and out of it uh and that's
what I think um Murad I think that's how
you pronounce his name has really um
summed up he's got this idea of PVP meme
coins AKA hyper gambling uh versus PVE
meme coins AKA Colts and just the idea
of using gamer technology to speak to
the people that are really playing this
game and I think that
is it's very important if you want to
understand this moment so I will
research with my producer or build out
an interview with my producer oftentimes
here on set which means that the team
can hear us and it's pretty rare that
people will walk up and want to listen
in uh as soon as we started talking
about meme coins specifically as it
relates to you as sort of the KE king of
meme coins uh we had people come in and
so I went around to each of the people
here at my company and was just like you
know do you trade meme coins do you
trade meme coins and most of them were
yes one or two were like I don't even
know what that means
um they could play in the stock market
they could go to the casino what is it
about meme coins is is it the sense that
they can win the game that they can
outsmart people like why are meme coins
supercharged they were in the last cycle
I can feel it building up again in this
cycle there's something that really
grips
people well the first thing is that true
meme coins you know the are non PVP
meaning there's a a team Anonymous team
whatever they in this cycle it's pumped.
fun on Solana which is the main conduit
which we launching these things they put
out 100% of the supply on day one they
launch a pool on rum or one of these
decentralized exchanges and anyone can
get in at ground level there's nobody
who got in before you who has a whole
entire Financial Services System set up
to dump on you which is what the stock
market is you know the people who
Capital formate in the private rounds
for the most promising technology
companies in at least in the last 30
years are the ones selling to you on IPO
day and obviously they're going to do
whatever they can to get you to buy at
an inflated valuation now sometimes you
get a Facebook and sometimes you get a
pets.com right but at the end of the day
you will never become Mark andreon you
will never become Peter theel because
those guys got in when Facebooks are the
type of companies when they were selling
at you know $10 million valuations $20
million valuations you will never get
that deal as a rual investor you get the
10 billion dollar Facebook deal well now
maybe 10 billion goes to a trillion but
imagine if you got it at
10 million to a trillion obviously
there's a lot of risk I'm glossing over
that like VCS are taking a lot of risk
in the early stages but they've got an
entire ecosystem of laws regulations
intermediaries set up to make sure that
they as successful as possible because
they're going to make sure that retail
cannot participate in the most promising
companies early they can only do it late
and so everybody intrinsically
understands this this was this was the
whole angst about why these you know
hedge funds able to short these stocks
and do essentially possibly illegal
things and you know Ken Griffin calling
the exchange you know I'm sure didn't do
that but you know shutting down the
trading of these stocks because they're
too volatile because there's a bunch of
these Legacy institutions are going to
lose a lot of money like people
intrinsically understood the stock
market was rigged they saw it explicitly
in action in
2021 and now you have this crypto thing
where the best mecoin projects are ones
where everyone could have gotten in on
the the ground level there is no there's
no Insider who got a better deal than
you if you saw it first and you were
able to act quickly you got in to you
know dog with hat at a very low
valuation or Pepe or um harambe or some
of these other very successful meme
coins you could have gotten the 10,000x
return you will never get that return on
the next Facebook as a retail investor
and that is the meta narrative that's
powering people to say well [ __ ] the
stock market [ __ ] the bond market [ __ ]
all these coins that I wasn't able to
get in early if I was willing to take
that risk I want to take the risk I want
to try to hit the 10,000x return because
if you look at a mathematical basis is
actually um expected value positive
because you investing in Facebook at the
IPO the stock dumped like I know 75 80%
over the last the next two years after
the IPO you're already down 80% the
mcoin you bought that you know that is
intr intrinsically worthless could also
go down 80% but Facebook will never
return you 10,000 times the meme coin
can and so you actually are from an
expected value perspective better off
punting extremely risky meme coins than
buying at the top of the market
extremely risky from a Market's
perspective new technology companies so
that's why meme coins are a thing
they're going to continue to be a thing
as more people learn about the
centralized exchanges about browser
based wallets about how to move their
Fiat dollars into a token that
represents those Fiat dollars like an
Athena tether a usdc on circle on chain
they're going to be doing more of this
style training and they're going to
demand from teams that they reduce or
eliminate the ability for insiders to
get a deal better than them if you want
my participation in your community if
you want me to talk about your product
if you want my attention then you need
to give me the same deal that everybody
else gets and I'm going to take the same
risk and I could lose all my money but I
also could make 10,000 x so that's meme
coins what encapsulates to me as a as a
movement as we sort of get more
comfortable being completely on chain
and sort of disintermediating all of the
financial intermediaries that take a cut
and restrict access only up until the
time when they want to dump on
you all right so the question becomes
then is this a child's tantrum
and these are just people annoyed with
the current system or is this a new
system that the the youth is building
from the ground up I think it's a new
syst that the youth is building from the
ground up once you start trading mem
coins and having 247 access to your
money it's very difficult to go back to
trading stocks at you know N9 to5 and
you see that the stock markets are
realizing oh [ __ ] okay we didn't want to
do 247 trading but it's happening we
need to get there because our
competition is this crypto thing thing
where they can people can trade things
when they get off of work when they're
on the subway when they wake up in the
morning wherever they feel like trading
there's a market we as a legacy stock
and bond markets need to meet the
customer the Gen Z's where they're at
they want 247 trading they want app
based trading they want intuitive UI ux
we need to give it to them or they're
never going to trade this my stock again
and so yes you're going to see 247
trading you're going to see more Robin
Hood Type interfaces that are going to
allow retail traders to get this sort of
look feel that they get on a on sort of
a a DEX in crypto or you know how you're
trading on pump that Fund in in meme
coins so we're going to start seeing
Legacy Finance mirroring what's going on
in the crypto and decentralized finance
space because the youth wants to trade
and invest differently than you know the
Boomers that is really interesting so
I'm going to start putting a couple
pieces
together so here's what I just heard
meme coins are worthless they're not
real yet they're very real because they
are capturing cultural energy of the
youth who have realized the system that
they have stepped into is rigged um I
want to put a point on the way it's
rigged this was when I first began to
realize that the system had such deep
flaws that people should be very angry I
became accredited investor when I made a
ton of money and I was like but I don't
know anything about investing so this
seems now unfair to me that I now have
access to deal flow and opportunities
that the average person doesn't have who
may know 10 times a 100 times more than
me about
investing so to your point the
traditional system has like all this
before it IPOs thing which is where I i'
shudder to think the percentage of The
Upside that is captured before it IPOs
like if you took all of the market over
the last 100 years uh it's it's so L
disproportionate to the people that are
in before the IPO which the average
person cannot be a part of uh so now you
see the youth sort of do these start and
stop movements so first they try Occupy
Wall Street they don't really know what
they want it doesn't go anywhere but you
can feel the Rage Against the Machine
then you get uh the GameStop movement
where they realize oh wait a second we
can actually use this against these guys
and we can make money but like there was
such an ethos of don't sell that the one
hero to come out of GameStop was the guy
that didn't sell right so even though he
wrote it all the way up and all the way
back down he was a hero because it was
like this this real bottomup youth
movement but then that becomes and I
know that Meme coins were happening at
the same time but that becomes the memec
coin movement which I think now is
really gaining legitimacy in the youth
culture via the mechanisms you're
talking about which is we're not going
to let people in before us cuz
originally meme coins were still like
that same sort of corrupted system of
there's a layer of people that are
getting access to this before you
literally VCS driving the price up
through a bunch of hype and then it
would just stair step down from there
not stair step it sort of Spike up and
down as people would pump and dump as
they say uh but all the value was
captured before it went live and so now
seeing the movement become not the
distracted movement of Occupy Wall
Street but the very concentrated
movement of I see an opportunity to
build a new system and that new system
is going to be totally equal the the
token gets launched to everybody if
you're a VC and you want in you got to
buy in the market just like everybody
else um that's very interesting but the
thing that matters most to me is the way
that it it is the emperor's new close
where finally the nature of trading is
revealed as gambling full
stop and that's been something I've had
a really hard time convincing people
they want to layer narrative and all
this on the top of it the market is
gambling in in a very refined fashion
because I'll grant you that all of life
is gambling you once said to me walking
up the stairs taking the elevator versus
walking up the stairs is gambling fair
but it's not refined gambling in the way
that the stock market is this new system
meme coins is
like the the cut pure cocaine of
gambling I mean this this is a shot
right up the nose man
uh it is really really
fascinating what do you think is going
to happen with all of that explanation
what's going to happen this cycle crypto
Haze people turn to you you've got a
good read on this stuff what's going to
play out everyone knows you can't
predict the future but you've got a a
good ability to read the room what's
going to happen well meme coins is an
asset class you know the all of are
starting you know I get all these you
know deals I messages I got one
overnight hey we've got all the major
K's you know do you want to like invest
in this particular meme coin X XNY
Market maker on board XNY you know
high-profile VCS are on board and we're
going to launch launch this coin so
we're starting to see that because we as
Traders we've got you know a large
Capital base we need to be where the
market's at the market is mem coins and
this particular type of capital
formation so now you're seeing starting
to see people to to ape these particular
types of things now the problem with
that is when people like me are
launching a meme coin I know it's going
to fail because I'm not the culture the
culture is the man or woman who's
sitting in their basement angry or sad
or happy or some sort of emotion about
something talking about it with their
friends on Discord or twitch or whatever
and coming up with the culture I am not
the culture I'm a consumer of the
culture I cannot dictate what the
culture is and if people like me with
money are trying to dictate the culture
I guess that's going to go to zero
immediately not not that the other one's
not going to go to zero too but at least
that's Grassroots bottom up and has a
little bit more authenticity than a
bunch of rich people saying I'm going to
create a mem coin and yeah it's going to
go up in price so all all that is to say
that is it the thing now people realize
that there's money to be made one of the
most profitable decentralized
applications this cycle is pumped out
fun they make something like I don't
know5 to10 million in fees every day uh
in terms of when you're launching these
things and so we in the invesment
community we know this is a thing we
know this is how the market is going to
evolve there are going to be you know
Meme coins that are going to approach
the valuation of Dogecoin right Dogecoin
is the original meme it does
nothing stated by the founder of the
thing and now you have you know a a
potential Department in the United
States government with the acronym of of
dots just because it's funny and and
memeable right
and so if you have government officials
getting into this game then it's only
going to get bigger that doesn't mean
the meme coin that you own is going to
go up in price there's going to be a
system I don't know what that is you
know I I'm just a punter I'm just a
gambler just like you when I trade these
things but there will be a few standout
success meme coins that are you know 50
to 100 billion dollar market cap things
there'll be a few of those and then
people will be chasing those and most of
them will by the next cycle there'll
still be meme coins but the memes that
around this cycle will be cents on the
dollar and worthless so again it's going
to it's going to get more silly I don't
know what the the most silliest memec
coin thing is going to be this cycle but
it'll be pretty obvious in hindsight but
we won't know what it is when we're in
the
moment and how would you advise somebody
if they were going to come to you and
say look uh Arthur I know that this is
just gambling I'm just having fun I'm
probably going to end up on the negative
side of this but I want to have a great
time but I I do want to do this with a
thesis um what thesis would you give
them just like Blackjack has like rules
you hit on this you don't hit on that
you can obviously ignore them but what
rules would you give uh a meme coin Lord
how should they how should so how do I
mean this is how I approach when I start
trading these things so number one I'm
always late I don't ever want to be
early I'm not trying to be early yes
there are the the people that are early
mean they get something really cheap and
it does the $1,000 next but you've got
to invest in a lot of things to hit
those because you're not you're not sure
what you know what $10 million market
cap mean coin is going to grow to a
billion very very difficult so if you
look at the stats from pump. fund and I
might be getting these things off by
order of magnitude but the number of
meme coins that are between a 100
million to1 billion dollar market cap is
something
like
0.01% of all launch meme coins this
cycle the ones that get from 1 billion
plus there's probably less than 10 right
of all the I don't know it's probably
10,000 or so 100,000 whatever a number
of meme coins that have launched between
you know the pump out fund has been
around the last what 18 months something
like that so the memec coin Market is
very Lindy and to talk about Nim talib's
terms right what has been success what's
valuable in the past is more likely to
be valuable in the future so I want to
play in the $100 million to $500 million
market cap coin if your coin can get
enough attention to get to that market
cap then I'm going to bet that you go to
a billion dollar plus right so I'm
looking at a you know 2 to 10x return
but it's very unlikely that the 100
million $1500 million market cap memec
coin goes down 95% very very quickly
because it's already got this inbuilt
community and the momentum building so
it's it's Lindy in the in the mcoin
space so that's when I want to place my
bets tell me something's above $100
million market cap where am I hearing
about it who's telling me about it which
types of influencers on Twitter or in
the certain chat rooms okay I look at
the chart I like I like things that have
made higher highs it doesn't m