SaaS Apocalypse, 18-Month Bear Market & Bitcoin vs Quantum

Like the revenues from all these companies are basically going to get back in and reinvested in the mega caps that can actually create them internally. And so this is like the best trade of all time. We didn't build anything useful. All in all, my best guess is it is a nine to 18 month bear market before things get better. Oh my, effing God. Six years of microstrategy buying is not even 75% of what will be unlocked when quantum computing comes. Which it will come, it isn't a nevitability. And so really what we have to hope for is today's episode is brought to you by Kraken Pro. You'll hear more about them later in today's episode. As always, investments in blockchain technology involve risk, terms, and conditions apply. [MUSIC] Yo, what is going on? Jonah, how are we doing? How are we doing with that? We, we doing, how are we doing, Abby? We're great. Look, we've got, we've got 70 people on. We're going to get, Jonah is looks maxing. Oh yeah, another thing I shared. What the hell? Yeah, so basically you see this warm, sun tan skin tone of mine right now? Yeah, it's not real. Talk about it. I'm using a video filter. Oh, you're using a filter. This is, this is all me, baby. This is all you're going to get. Yeah. No filter here. You're naturally tan. I'm naturally like pink when I'm cold and see through when I'm not cold. So, yeah, that's good. The downside to being 100% oscarose juice, you know? Yeah, exactly. I got it. I'm see through when I'm cold and pink when I'm warm. That's, that's how I, yeah, that's how I roll. All right, so now that these are all the real ones. Everyone on this podcast right now, I want you to know that you're an absolute real one. And so we're going to tell you something only you guys that we're not going to tell anyone else after I post this tweet and that you guys remember the terminal that we were working on. I remember you, you, you, you, Jonah, you remember the terminal that we're working on? Well, we're pushing out in the next two to three weeks, a major, major, major update. And it's going to be, I think, a very, very, very competitive product. And the token is currently trading at 800K market cap. So that's just for you guys. Let's talk about your house in Puerto Rico for a second. What's out, what's out there? Is there a pool? So that's there is, there is no pool. Unfortunately, that is just the patio. It's a nice patty. I just had it. I had it repainted about a year ago. This nice blue. Mm-hmm. It's beautiful. Yeah, no, it's, it's really nice, but I haven't. I have a shelf too. Nice content. I'll mode you got going on there. Whatever that is. Not too small. No. It's not the Talmud. These are all the books from, there's one shelf. It's just like all the books from my childhood. So I've got the Harry Potter series, I've got the Artemis Fowl series. I've got the alchemist for the real ones and know that. And then I've got like this book, this book you would love, Jonah. Hold on. These are probably two of your favorite books in the world. ThousandX Book Club is one of my favorite segments on the show. These are probably the best books in the world. Oh, I love both of those. I knew you would love this. I mean, you were the one that told me to get this. That's the Bible. And I'm sure you also told me to get this one, but I did. Yeah. The Bible and the secret history of the world's best company. This is a phenomenal book. This is just, it's like a riveting piece of text. It really is. It's incredible. And the little table at the back that shows VTAL's earnings, I can verify that, or maybe it's at the front, I forget which. It's either the front or the very first or very last page. Those earnings are real. I can verify. I was up in there and those numbers check out. So-- Yeah, the net profits are pretty insane. Which is what's kind of-- They published a book just before the Wild ones started. Is that Glencore had a lot of years where they just lost money? Yeah, that's because they decided basically there's the old adage. If it flies, fucks, or floats, you're supposed to rent, not buy. Obviously, that's foul mouth. And I would never coin that phrase myself. But an additional sort of corollary to that theorem in the world of trading is that if it's a hard asset, you're also supposed to rent, not buy. Those things depreciate. So what Glencore did wrong was, unlike VTAL, which is asset light, VTAL rents everything. They have the world's largest navy, but it's all rented. Second largest, sorry, behind the United States. It's all rented boats, right? They don't own any ships for obvious reasons. Glencore went the opposite direction. It went super asset heavy and bought a bunch of mines and assets and cargoes and all sorts of crazy things. And basically, that emulated their returns to the shareholders. And this is what happens when you go from being a private partnership to a public company. So everybody in Glencore, like cashed out around 2011 or 2012, but whenever the IPO was, minted a bunch of billionaires and sent to millionaires. And then the company just went like asset heavy and did the whole quarterly earnings thing. Basically, the best model for these companies is asset light. And majority ownership is employee, not outside shareholder. Then Glencore flipped that. And that's what happened there. Does that make sense? Yeah, that makes it on sense. That actually, it's a good two things here. One, I'm pretty sure Twitter's down, which is why we have zero viewers right now. I don't know if Twitter's working on your end, but it just totally crapped itself on my end. Twitter's down all morning. Yeah, Twitter was down all morning. I think it's back down now. So we're talking about how they're like, Facebook has 150,000 employees and we have 30. It's like, yeah, this sort of thanks Twitter. Good job. If you're an eligible US trader looking for an edge, Kraken Pro is the only crypto exchange offering margin trading in the US. Qualified traders can tap into 150 plus margin markets with up to 10 times leverage on select assets. Using Bitcoin, Ethereum, USDD, and more as collateral. Plus, you get real time risk tools and Kraken's signature, deep liquidity, all in one trusted platform. Check out Kraken Pro and see if you qualify at Kraken.com/features/margin trading. Crypto trading involves risk of loss and margin is not for everyone. Margin services are offered to US customers through payward interactive ink. For full disclosures, visit Kraken.com/legal/disclosures and review Kraken's margin disclosure statement. As always, investments and blockchain technology involve risk, terms, and conditions apply. This is actually-- it's a good segue. And I'm curious your take on this because I wonder if there's a corollary between what's happening in the cap expending of these massive tech companies. And what you just said, which is it's better to rent than to own, all of these companies are saying, hey, we're going to go build these massive data centers and we're going to spend a lot of money because we want to own the data centers. Because we think it's going to be smart to own the data centers. There's also the other argument, which is that they should not be spending all of this money building out data centers. They should be basically going out to contractors that will own the data centers themselves and rent them just in case, at some point in the future, these data centers massively deprecate. It's much better to rent than it is to buy. Right? It actually own them. And so one of the things that I think a lot of people are confused about right now is like, are they actually going to follow through on this? Is it better for them to rent? Are they going to walk back their cap expending, which would be very, very, very good for their stock prices, because it means that stock buybacks could return. But it would be very bad for all of the stocks that have done very well recently in the data center world. So this is kind of a middleing ground here. We're not really sure what's happening. We're curious to your take. Yeah, no. So it's a great point you bring up. And it's sort of nuanced. So at the end of the day, every company is a trading company. Google kind of trades ads and compute, Glencore trades, physical commodities. The time when it makes sense to own rather than rent, it's like a real clear distinction. If you are an intermediary in a market, let me take even further step back. Let's use the oil industry as an analog, because it's 100 years old per the prize and the book you just held up. And there's a real long precedent there. So there are three components of any industry. In oil, you have production. That's called upstream. Then you have trading and intermediation, the middle man. That's called midstream. And then you have sales and distribution. That's called downstream in oil. That's like refining and then taking the refined products and selling them at the rack to trucks, at the pump to drivers and jet field tanks and airports and stuff. So basically upstream, midstream downstream. If you are just a midstream company, buying assets is the stupidest thing you can do. And it feels like a honey trap that everybody just falls for. If you are an upstream company, you cannot rent. Like if you're digging stuff out of the ground or if you're making things, you have to own factor. You can't rent a fact. I guess you could go with a contract manufacturer or own loyalty from streams of oil. Like it happens. But the big, big mega businesses own downstream, you also have to own. So where-- and then we're going to take this analogy back into tech and then try to draw some trading conclusions. So downstream, you got to own a refinery. You got to own the means of production and sales and distribution otherwise you're just just kind of going to drop shipping only gets you so far, right? You have to own those channels. So basically where midstream companies get tripped up is when they try to do, when they try to go from being like a Glencore to an Exxon mobile, which makes sense. You want to expand horizontally into the whole market and become this vertically integrated behemoth. If you don't go all the way, you just end up an asset heavy midstream trader company and that's a terrible business. The companies that succeed like BP and Shell, they bought the assets and they followed through. So going to data centers, it's a very interesting problem. You have like data center companies like CoreWeave, I think are kind of a bad bet long run because for a variety of reasons, depreciation being the number one factor and also, I don't know, maybe, maybe, maybe not. Well, we could talk through it. But if you're Google, Google is kind of like the Exxon. I met a Google Amazon Microsoft. These are like the Exxon mobiles of the compute world. And so given that they are vertically integrated it, I think it does make sense for them to own the assets. And the reason why it makes sense for a vertically integrated company to own assets, whereas it does not make sense for a midstream company to own assets, is because they extract the full optionality out of those assets because they can pull from their supply during times of shortage. They can push into their sources of demand that they own during times of excess. And so those assets actually produce more optionality, which justifies them. If you're just an asset owner like CoreWeave, they're gonna be real cycles for that business, like a midstream asset owner. So I think basically, yeah, I agree. Chano said CoreWeave is basically a landlord for chips and that their assets depreciate rapidly. That would be a scary business to be in, just a massing physical piles of chips and wires and just sitting on them. - Because I assume, I mean, the only major difference might be, are we, have we reached the pinnacle of chip development? Like is chip development going to slow down a ton? Because this is really, this is actually an interesting question because it's kind of what happened in the Bitcoin mining space. Where Bitcoin miners were like horrific investments early on because the rate of development was super, super, super, super fast, right? You were constantly like every year, they're coming out with new miners. And then suddenly the pace slows down and it slows down and it slows down. And actually now the development timelines where Bitcoin miners are pretty long because we've reached like the literal physical constraints on what you can do with these chips. - Yeah. - And so, it's like minor difficulty. - And so it's actually just skyrocketing. - It's skyrocketing and it's not because of chip development and like faster chips, it's because people just keep amassing more, like we're producing more miners, right? Whereas in the past the difficulty was skyrocketing because a new chip would come out in like 20XC efficiency of the Bitcoin miner. And so the question is, or does it become a better business over time as chips become more stagnant because we've reached physical constraints? The way that I view it is like a massing piles of hardware in data centers is going to converge towards the returns of like a real estate landlord business, like a commercial real estate empire, which I guess is good business, right? Like they're not gonna go bankrupt. Glencore didn't either. - Right. - But it's not gonna be like the hyper growth exciting thing to do because again, it's a, you're a midstream company and you're just, you're just a hard asset owner. You're not like rent, you're not like nimbly renting the assets you need to like use high leverage to bootstrap some, to basically to surf some mega trend, to surf some tsunami wave. Kind of like Bitcoin miners weren't great business until they pivoted to AI. Like maybe there will be a next big thing that CoreWeave can latch onto after AI, but somehow I don't think so. I think this is the final wave in the set to stick with my surfing analogy. And once they've ridden that out, it's gonna go down. I wouldn't be long CoreWeave here, that's for sure. However, I don't think it's a bad idea for Microsoft and Google and the other hyperscalers to be a massing physical infrastructure because they're actually gonna need it for a long time for inference and there's tremendous optionality in there. Like let's say that we go into a glut for compute, they can always, there's never gonna be a shortage of demand from their internal needs, right? Met of advertising and just usage, Google will always have a place to put the compute. This is why Exxon has assets, right? Like when there's a glut of oil, they can just shove it into their refineries until their refineries, you can't buy from anybody else. Same thing with Google owning a data center. If the external demand for compute dies down, they'll still have internal demand for compute that far outstrips their physical infrastructure ability to provide it. So it makes sense for them to own. That you kind of getting what I'm. - Yeah, no, I get what you're saying is that they can pick up that I also think a big part of it is that they just have the money, basically eat the low times, like eat the lean times. But I do think that the amount of money that they're spending is sort of making a bet on exponential growth of demand. And if we don't see that exponential growth for an extended period of time, I think that we could see some issues. But I'm of the opinion that it's possible that we're actually gonna see some walkbacks in the cat-back spending that these companies are doing. Basically, everyone's gotten so nervous. I mean, Google's not trading at 300. Met has been doing terribly. There's sort of been, have been caught up in this route of tech companies across the board. But I don't think that's very fair. I think that this is actually. This is a pretty good time to go buy Google now. This is a pretty good time to go buy Meta. It's a pretty good time to go buy all these mega-cap tech companies. Because I do think that one thing that we're not quite appreciating is just how horrible the SaaS apocalypse has been. But what it also means for the large-cap companies, right? Basically, everyone that pays insane amounts of money to go use that last year, and to go use into it, to go use work day, the amount of money that is spent on Slack and Adobe sales force. The companies that can cut these people out now because of the speed of AI development and what you can build internally, they're going to save. There's going to be tremendous savings. The revenues from all these companies are basically going to get back in and reinvested in the mega-caps that can actually create them internally. This is the best trade of all time right now. It's already sort of played out. I don't know if you want to take the short side here. I don't know if you want to go continue to short Adobe down 25% continue to short that last year, down 47% year to date. But basically what you're going to see is the revenues that we're going to those companies are going to be absorbed into savings from Google and we're going to see the profit go up. And this is what people talk about when they say AI is going to improve productivity and AI is going to streamline companies and it's going to basically increase margins. It's all this. It's all the tens of millions, hundreds of millions of dollars that are spent on these companies that produce billions of dollars of revenue. And total, that is going to collapse now. Because I think a lot of these things are going to be built in house. I wouldn't be-- Salesforce is a great example of this. In the next three years, I guarantee you that a lot of people are getting rid of Salesforce because they've just built their own internal tools. So this is like the SaaS apocalypse to me, whatever one's talking about in all these shorts. I think is really relegated to the B2C area. It's really relegated to these large companies that can afford to develop in-house. But B2C I think is a little bit more safe just because the average consumer is really dumb. And it's actually like once they have buy into a product, it's quite difficult for them to switch. And distribution is still key. Like when it comes to the consumer, the consumer is never going to make the calculation. Could I build this myself? Or should I spend money to go pay for this thing? Businesses make that calculation every single time they sign up for a product. Should I build this in-house? Or should I buy this from somebody? Off the shelf? Or this is exactly the discussion that we were having. Do you build it yourself? Do you own it? Or do you rent it? And for the most part, because there's been such a high bar for entry for building software and so expensive, the answer is rent. You want to rent because it's inefficient to build it yourself. But now I think it's very efficient to build it yourself. I'm still on this trade. I think you buy the mega caps. You short the service providers to the mega caps right now. Because they're just going to figure out to do everything themselves at this point. I think that's actually probably a pretty actionable trade. The Salesforce stock price-- I mean, you got to be careful, though. The Salesforce stock price is almost down to the 2023 lows. It's trading 189 right now. All time highs was-- the beginning of 2025. It was 362 when Trump got elected the day after. Now it's down like 50%. The way that you short generally is you wait for the bubble collapse to occur, but then you don't short on the way down, right? What you do is you wait at some point there's going to be a violent bounce, but if you believe strongly that you're in a secular downtrend, that's your entry, right? You wait for Salesforce is almost at the 2020, it's actually not almost at the 2022 lows, the 2022 lows are 131. It's currently at 190. But basically what you wait for is like a one to two week period where the performance is we're up like 15 to 20% on these companies and then you go short, right? That's the way that you manage a short is you short. You want to short these things in strength. And so if I'm constructing a trade here, I'm definitely like I'm still a buyer of Google, I'm still a buyer of Amazon, I'm a buyer of Microsoft. I'm not telling you to short Salesforce in the last year in here, but I do think I do think this is a trend that's going to continue for an extended period of time. I mean, this is like I view this as the alt market blow up equivalent for crypto, right? Yeah. When you hit a bear market, the shit that is useless goes to zero. And I think we're going to say the thing is it's easier actually to short Salesforce and at last in and into it, it's easier to short them because they actually have revenues that you can look at. So all you have to do is say, okay, let's see, are there revenues actually gone down or people actually canceling services? If you don't think that there's anything to reverse that trend, these are phenomenal shorts. I mean, I like your framework for shorting stuff. You know, at the beginning of the year, you were talking about shorting meme coins because they just bounced and looking at my least favorite one ever with or my favorite one to hate when I love to hate. It traded from 25 cents up to 50 cents. And now it's trading 23 cents. Like in these violent bear markets, you get squeezes. If you're just sitting there ready to with the hammer in your hand, ready to play some whack a mole, you can make some money. You can whack some moles. Yeah. I mean, it's really the same trade as the crypto trade. How is the crypto trade going by the way? There's a crypto worm on brand wrote when crypto. I think, I mean, I sound like a broken record. We, I think you just got to wait it out. It's not the hot item right now. Now, I mean, our, our daddy, Mike Ipleito tweeted something, try to pull it up here. He's saying he expects crypto to go into like a nine month minimum bear market. Let's see here. I'm going to read his post because I think it's relevant and I want to talk about it with you. I'm kind of wondering the same thing. Some thoughts on this market. I'm going to try to do my Kipleito's voice. I think it's likely we were entering a full on crypto winter. I'm also open to the idea that this bear will be as bad as 2022. Perhaps even as bad as 2019. The short term reason for this is that their industry is in an air gap created by unsustainable valuations and regulation. We've been pounding that table on this podcast for years. Historically, valuations and crypto have been driven by the hot ball of money money comes in because it was literally illegal to generate value for tokens. Revenue and cash flows were entirely disregarded. Prices were set by the amount of capital times the supply of tokens. The sexier and more risk on it was the higher it went. There are two things that are different this time. The biggest difference is that it's clear that there will be a regulated path for crypto projects. This is I'm skipping ahead. This is good, but it prevents and presents an obvious problem for protocols valued purely based on speculation. Once there is a regulated way to generate cash flows and not get thrown in jail, that is all the market will want. So what is confusing many investors and founders right now is that fundamentals are growing, but tokens are still selling off. This is because we're resetting how valuations will work and the starting price for almost every project was way too high. We said that on this podcast. Additionally, crypto is getting absolutely mugged by AI. The last couple of years, meme coins, stupidity are catching up with us and unfortunately, we didn't build anything useful. Oh my f in God. Avi, what do you think? I think that's pretty reasonable, but it sort of depends on what you think of when you say bear market, right? It's there will be there will obviously in my opinion be a bear market for really shitty terrible assets. But you have things like Morpho and things like Uniswap that are getting bought up by large institutions right now. You have things like hyperlipid that are generating real capital. I'm crossing my fingers that one day, Sarah will stop sucking ass and actually start going up again. But you know, these things are actually generating real revenues and becoming real companies. And we've talked about this at Nazim in the past. And I don't really want to be dead horse, but this is this is the dot com implosion moment where your pets dot com, it goes to zero, but everything else ends up going up. Right. So like all the stuff that is actually a good company run by smart people that are looking to exist in five years where most of these crypto projects are just looking for a quick buck. The things that actually are trying to build, I think are are very, very, very good trades because they're right now. What's happening is they're they're being dragged down by the broader market. They're being dragged down by this idea of a bear market. Right. I mean, like hype's hype's trading as much volume as coin base now. That's insane. Hypes not valued nearly were coin bases coin, although it's their converging quick, holy moly coin bases is just imploding. You know what you're right. Like this really is the technology market in 2001. Pets dot com is, or I guess maybe in 2000, pets dot com is dying and Amazon is getting hit in sympathy. But you know, the next 25 years are pretty bright for the projects that actually build like another one that I didn't want to leave out my favorite arrow drum or as my Italian and French friends pronounce it hero drum. I think that I think it's got a lot of upside from here. It's just the question is like when does the good stuff stop getting dragged down by the bat? Mike Ipilito says 9 to 18 months. To me, that just feels like I don't blame him because I pull stuff out of my ass all the time. That feels like a timeframe that's been pulled out of his ass. Now I don't I don't have any issue with that. I just it's like I can't help but wonder and we should probably discuss why? Like what is that in the past in the past there were like catalysts is like, okay, well, Luna and FTX just blew up and volumes are down 90%. People probably won't reengage for at least a few months, maybe years. Here, it's like what all the back the regulatory and narrative backdrop is so constructive. It's like why why should it take 18 months for the valuation convergence to occur? There are huge trades here short garbage against being long good stuff short coin base long hyper liquid short with long long long arrow drone. Like what am I missing? Why does it take 18 months for the market to correct or is Mike Ipilito right? I think I think what what happens here? Well, there's sort of two things that we need to we need to talk about. If you're if you're an investor and you're just thinking about like how do I how do I think about trading the crypto market? Well, two things are true. One is that we're having a massive blow up moment and that this has been talked about and that it's probably going to take some time to wash out all of the exuberance that we experience. I think we pulled forward a tremendous amount of value just because of what Trump did pumping up the crypto markets, launching his Trump coin, launching the grifty ass Melania coin, you know, basically trying to bring in like right. Basically trying to bring in like as much money as they possibly can and then exit the exit the nonsense. But what is also true is that animal spirits always return. They always return and all you need in order to get a massive massive massive rally from alt coins from crypto is a whole from meme coins or any of this shit is simply for valuations to go low enough to the point where it doesn't take that much capital to send them higher and then suddenly you're going to start to see like if Pepe goes to 50 million bucks or a hundred million bucks, it's probably going to five to 10x at some point after that because I don't think animal spirits go away completely. Over time, it trends to zero, but there's always going to be pockets of exuberance where everyone floods into the market because if every it's very simple, it's very monkey brain. It's always monkey brain. Yeah, I'm sorry, I just had to share a Melania coin while we're here. That's all I have for now. I'll hear. Let me remove it from the presentation. Sorry to interrupt your rant there, Avi. That was good, John, I'm happy. Brought them. Now, the animal spirits are back. I mean, also another thing, another evidence of this is like prediction markets. To me, prediction markets are the new crypto. It's like, okay, people have gotten a little bit worn out and drained from betting on random meme coins and to you know, 2000. in 2021 and 17 style ICOs that have no connection to any business if there is even a business. Especially the 2017 ones. It's like this, this is Python for crypto on the moon when future space-faring civilizations will need that. This is the coin that they will use. And obviously people would gamble on that stuff back then that got a little, in 2021, there had to be the veneer of a business. Then no business is materialized except for gambling ones. And now I think prediction markets are the new altcoins. Why bet on some random crypto project? Even if it's a halfway decent one. Why bet on layers 0 or why bet on mo-net or gonad or say or sui or aptos? When you can gamble on how many times will bad bunny grab his junk at the Super Bowl half-time show? Nine-bit at 16. Lift the offer you hit in the bid. Prediction markets are the new shitcoins. And so I think a lot of attention in gambling money has just shifted to other sources of sugar rush online. Yeah, it'll come back. And the very specific reason that it'll come back is because prediction markets are not a cohesive entity. They're not a cohesive thing where everyone on the prediction market is all making money together because the markets are correlated. Crypto community building there. There's no community building. There's no, there's really nothing. And honestly, it's very, very, very rare obviously that one in a hundred events happen. The density of 10 to 100 X's that occur when crypto is hot is way higher than it will ever be on prediction markets. And so obviously crypto is like, I mean, imagine this. Crypto is the equivalent of going to a casino and losing over and over and over and over. But then for like a 15 minute period, everyone's slot machine is hitting. Everyone is making so much money. Everybody is buying bottles of champagne and sending them to one another. It's like oceans 11 and you're just having the greatest time of your life. That is what crypto is. That is the value out of crypto. It's weird. I'm genuinely serious. It is so real. It's so real. I've never heard of it that way. It is like when everybody wins at the same time. It's like so much more fun to all make money with your friends. That is the that is the core value proposition of crypto. It is not a tool for gambling. It is a tool for gambling with your friends and making a ton of money with your friends and being part of a community that just minted millions of dollars for God knows what reason. That prediction markets will never ever. No, they won't. Let me check. They'll never be able to replicate that prediction markets will drain. We're all winning together. These events are completely uncorrelated events. There's zero sum also. That's the difference. Crypto is not zero sum whereas prediction markets are zero sum. Crypto is zero sum in some ways. No, it's zero sum in the sense that like, sorry, crypto is zero sum if you think of it as a closed system. If you think that the communities that are built by crypto can bring outside money like X crypto money into crypto can generate immigration. It's not zero sum the way that like the United States of America is not zero sum. An individual prediction market is literally a zero sum game. The problem with prediction markets and the reason why I think they will, maybe the market cap of money invested in prediction markets continues to grow but like each one is a zero sum game. The reason why I think prediction markets will drain retail a lot faster than crypto did is because it's precisely for the reason you just described. There are sharps at the tables of these prediction markets. There are people who actually have talked to bad money before the halftime show and he's like, they're like, "Ola, I'm going to grab my junk 25 times, take the over." Why are you obsessed with the idea of bad money grabbing his junk show? Because he did. He did. I was very inappropriate for my children. I had to turn it off. It bothered me. So now I'm just harping on it. You just kept grabbing his junk. It's like, "Come on, man, it's the Super Bowl. Don't do it. I've got a three-year-old girl. Like, stop it, bad money. Every time I exit my chew bubble, honestly, I'm in my little religious chew bubble in LA. Everything's sort of like the way I'm used to it. Every time I like just sort of like open the shades and like peek out a little bit, I'm just like more and more horrified by what's going on in society. It feels like a total alien invasion is taking place that I'm just sheltering myself from." Anyway, my point here is like, it's a zero-sum game. Every single one of these markets has some insider who actually knows that insider trading is not illegal. Everybody knows the. Everybody. They're markets so bad. We talking about bad, buddy, John. I love it, guys. I love it. I love where it was. This is so fun. They're all hilarious. Every time. Twitter just turned back on. We got viewers now. Amazing. Probably my point here to make a long story short, prediction markets have insiders who actually know the outcome of these bets. They will drain retail a lot faster than retail got drained by just sort of community style, investing in vibes and the sort of grand vision that you do that you have when you sit down at the craps table of crypto. So, the difference between a craps table and crypto is that the casino doesn't allocate the bet size, right? Money can come in, add infinitum in crypto. So, yeah, man, I think. I think I'm. This is what I would just advocate for is you really shouldn't write crypto off. We can stop there and I'll explain that more later because we got to hit the ad break. But you can't write crypto off because it will always come back. No matter what happens, it will always come back because all it has to do is go down enough so that people are willing to gamble on that again. It can't go to zero. That's the thing. Anyway, let's hit that ad break. [silence] Alright, we're back. So actually, we're getting people are coming back on the podcast now. We're up to 2000. It's still very low, unfortunately. The Twitter breaking really just. It left us with you guys. And I'm very happy that you guys are here and I'm very happy that you're listening to this podcast because again, it means that you guys are the real ones. You guys are the one that fought through the Twitter breaking down. Maybe you're even on YouTube. If you're watching on Twitch, that's crazy. There's one person watching on Twitch. Don't know who that is. Shout out to you. Yeah. That's. I think that's nuts. Who the hell watches this on Twitch? There's a guy on Twitch who added something in the comments. He wrote, "He asked if there are black Jews." And I wrote, "Of course, there are black Jews." Amari's not a man. Alright, guys, not on Twitch. Who. Was it? Yeah, here we go. Avi looks black in this letter. Yeah, that guy's on YouTube. Yeah, that's what I believe. I love our YouTube listeners. Those guys are the peak. Those guys are just. Those are the real ones, actually. And I only. Actually, I might have to take it back because I don't know how many times I've explained this. This is just what my eyes look like. Yeah. Like. I got good sleep last night. I don't know how to tell you. But maybe you should try some cosmetics by Kylie. Kylie Cosmetics. You can just apply a little. You know, whatever it is. Touch up. You're gonna wear makeup? I know you put on video filters, but I'm not putting it on a video filter. We may as well just totally cartoon to fire ourselves and just become. Wow. Instead of two Jews talking about crypto, we could become two Korean girls talking about crypto with all that. You know what I mean? Nothing on Instagram is real. Nothing is real anymore. It's. You know what would be a crazy, crazy crossover. Okay. Crazy crossover. If we did a get ready with me and talked about crypto. [laughter] Like, what we do is like. We would be on one side of the screen and we get some. Maybe we get some girl. Yeah. On the other side of the screen and she'd be putting on makeup. That is click. We would just be talking about crypto. That is like audio would just be solely crypto, but it would be like some girl getting ready. I think that would work on TikTok. I think if we ever want to go for the talk, I think that's what we've got to do. I actually had a group of TikTokers that tried to rent my house back in 2020 during COVID. It was like. The sad thing is it actually would have been preferable to the tenant who I selected, who's obviously the guy. But like. My landlord. Sorry, not my landlord. My real estate agent was like, "All right, I have to show every offer to a landlord." legally required in the state of California. I don't recommend that you take this. Let me, let me just caveat what I'm about to say with that. But a group of 18 tick tockers want to live in your house full disclosure. They will be like skateboarding off your roof into your pool, like crashing Lamborghinis into the, you know, whatever the front staircase, they'll, they'll repair it. You know, here's an insurance deal and the answer was no. And I guess trying to tie this back into investing. Crypto right now is being handed from OGs to Tradify. And that's basically like, like the two of us are sort of like the real estate agent podcasting to Tradify saying like, guys, crypto's offering itself to you right now. It's a bunch of 18-year-olds that want to like crash their crash their lambos into your swimming pool and skateboard all over your house and stairs. Do you want it? And Tradify is just kind of like, ah, maybe we're going to be a little selective here and try to invest a DCA into Bitcoin over the next 72 months instead of just foaming your bags right now. I think that's making it life very, very difficult for people who work in crypto, especially crypto vcs. I don't know how they're coping right now. That's, that's got to be a very difficult job at the moment. Tricky didn't navigate. Chris Dixon posted a long thing about it. It's hard to, like, I basically think the only way to invest in crypto here is to play the long game. It's almost impossible to trade the short term unless you're pairs trading it in which case, you know, shout out to pair protocol and they're thing that they're doing on hyper liquid. That's probably the only way to actively trade crypto here without getting emulated. I think that's, I think that's unfortunately, unfortunately, fair. Yeah, maybe, maybe go, go sign up for pair protocol and just start putting on all these pair trades because the issue, the issue obviously is that the interest right now is dead. And like I've been talking about for a while, I have my framework called value versus momentum. We definitely have downwards momentum. The question is where's the value? Now, my take is that there is value at like 60 to 64k per BTC. And that's where I would look at accumulating long term. I mean, maybe we get down to 52k, at which case, you know, you really, you really can back up the truck, but candidly, that's what I said, that's what I said at 80. I was like, I think, I think this, this, this, this, this will, this will be good. And then, you know, we, we tried straight back from 90, 93 back to, back to 86, maybe like, okay, I guess there's, there's just infinite sellers. I mean, there's no real narrative for Bitcoin to go up right now because it used to be the golden narrative. And I think it's decoupled from gold for too long of a time for that golden narrative to come back. So it really just has to be like a global equity narrative. And it just has to be like, it has to be the, once again, the fastest horse in an all up market. We have to be in a market where everything is doing well, where every, where liquidity is getting pumped into the system and animal spirits are back for it to reverse, or we need to be at a price where basically everyone looks at it and goes, that's a massive bargain. Yeah. And people are doing that by the way, like, even my, I think we are, we're not super far away from that. I do think the quantum fud, we got to talk about that too. That was my next comment. Quantum, we got to talk about the quantum fud. People keep asking me about that. Well, the quantum, the quantum fud is real. And to explain what the quantum fud is, they're really two different levels of fear around quantum hurting Bitcoin. The first level of fear is if quantum computing gets to the level that it needs to, which currently is very, very, very, very far away from and most experts think that it will take at least up until 2030 or 2035 to get the qubits up to the level to actually crack the encryption that's used to create the private keys. The fear is if we get quantum computing, then all private keys, as they stand right now, are crackable, which means that your Bitcoin, as it stands right now, is not safe. And there are a lot of people out there that are saying when quantum computing comes out, Bitcoin will go to zero because everyone's Bitcoin is going to get stolen and it's going to get nuked. And that's going to happen because Bitcoin developers are not going to introduce quantum resistant Bitcoin accounts. They're not going to develop it in time. Why? That they're, hold on, that they're sticking their head into the sand and that it's that's going to be the catastrophic end of Bitcoin. That is not true. I think that the Bitcoin developers will introduce quantum resistant accounts that we will introduce a quantum, quantum resistant mining algorithm, which is actually less of a fear than quantum resistant accounts because quantum computing is, it has a much harder time breaking shot 256 than generating than breaking the randomly generated private keys, but that's another discussion. I think that we will fix that. The main actual issue, which is why people are scared, is that in order to have a quantum resistant Bitcoin account, you have to move your Bitcoin to a new address. You have to generate an entirely new private key and move your Bitcoin over, which means any Bitcoin that isn't moved, that sits in an old address, is vulnerable to quantum computing. There are 4 million Bitcoin that Satoshi owns that sit in a non-quantum resistant Bitcoin account, which means that the moment the first quantum computer is created, there is a massive bounty out there and 4 million Bitcoin will immediately be sold probably on the market or take in control of. For context, when micro strategy, micro strategy has been operating and buying Bitcoin for the last 6 years and they have accumulated 2.8 million Bitcoin. So 6 years of micro strategy buying is not even 75% of what will be unlocked when quantum computing comes, which it will come, it isn't a nevitability. And so really what we have to hope for is the first people to, the first people to crack quantum computing are not massively greedy and they crack Bitcoin, they crack that private key and they burn the coins or something. Or the other possibility is that we fork Bitcoin, we soft fork Bitcoin and those coins get locked forever, they get lost, they basically get burned, they get sent to a new address and they don't exist anymore, it's gone. Now the issue here is that if you fork Bitcoin, obviously you're saying Bitcoin is no longer immutable. We've had this happen before with the BCH and BTC hard fork BBSV, but what's happened? The fork's died, BCH died. Well dude, sorry, this is exactly what's going to happen. Let me just give you the play by play. Quantum computing will start to get threatening. We don't know whether it's in two years or 20. When it starts to get threatening, but before it before the chain gets hacked, the devs will fork Bitcoin. The current Bitcoin that you and I have in our cold wallets will become Bitcoin pre quantum, Bitcoin pre and then we will, you will get issued Bitcoin post just like there was the BCH fork and the BSV fork. Bitcoin pre will trend towards zero just like BSV and BCH have and Bitcoin post will just keep on trucking and pick up at the same price and do whatever Bitcoin pre would have done if it weren't for the quantum threat. The other thing is the quantum threat applies to your JP Morgan account, your stocks, your bonds, your grandma's stocks and bonds. Like society has just got to fork everything and switch it to between pre and post. There will be entrepreneurial hackers out there who steal grandma's pre quantum assets and sell them off while they still have value. But honestly, I don't see a problem here. This has literally happened already. Every chain we care about has been, I guess, not Solana, but the big chains have been forked. ETH has been forked. This is just normal for crypto. There is no reason to fear. Even if you're like a Bitcoin pre quantum maximalist, but you don't care about BCH and BSV. You just care about the current fork of Bitcoin that we're all trading, not going to zero. You're worried that somebody's going to steal Satoshi's coins with a quantum computer and sell them to zero. I guess the big reveal of the show where we've only got three minutes left before the end of the show. The big reveal is that Satoshi is Mike Ipollito and he's smart enough to move his coins over. He's going to protect us and we'll be fine. Basically. Thank you, Mike. We appreciate your sacrifice. We appreciate you. Thank you. This was a fun show. This was good. It's always fun. The hour went by like that. We got to, you know, I want to end with one thing now that we have some listeners that have gathered. As you know, Jon and I have been working on the thousand ex-terminal. So if you go into your browser and you type in the thousand ex-stop money, this is the terminal that we put together. Now, Unfortunately, our dev actually broke his arm. And so we for the last two months have been really struggling to push out a good product. We think we found a pretty amazing solution. And we've partnered with a group that has built an internal LOM that is really, really good. And they need a good distribution partner. So we're joining forces. And we're probably in the next two weeks, to three weeks, going to be pushing out a pretty major update to our 1,000X terminal. And obviously, as always, the 1,000X coin will take at least half of the revenues, if not more, from this terminal. And I think we're going to be able to build something pretty incredible. So I'm going to put two things out to the community. One, pay attention to the 1,000X coin and the 1,000X terminal over the next few weeks. When we end up pushing it out in the next two-- the update, I would love if you guys ended up using it signed up for account. Try it right now. It's broken. So don't worry about getting on there and trying it. But I did want to give you guys the real ones, the heads up. Because it's possible if the terminal is really good and a ton of people sign up. A lot more people are going to find out about the 1,000X coin. And I wanted to let you guys know about it now before that happens, basically. Yeah. I wouldn't-- let's not interpret that as a shell for the coin. The coin is our half of whatever revenues come from this terminal is going into the coin, for sure. Because that's what we promised. And promises made, promises kept here on the 1,000X. Promise made, promises kept. I would say what's exciting about the terminal is that when you bootstrap a project, even when you get kicked in the nuts, what sort of just happened to us, there's nobody shutting us down or bankrupting us or calling back debt. We're just going to keep going. Yeah, this is a full-- We're going to build this thing into existence one way or another. I mean, I've sunk-- between the two of us, we've sunk in multiple hundreds of thousands of dollars. We've lost a lot of money on this so far. But we're-- No thing, Avi. We're just going to keep going until we-- We are. We are. We are going to use it. We are absolutely plugging away. So do not worry. Do not fear. We are not abandoning this project. We will never-- Never. You. So just know that we're going to be-- we're working our asses off for you. Avi's got a fire in his belly now. I love it. So do I. We're back to roll. Love you, bro. This was great. Thanks for talking to me every week. I learned so much. This was awesome, Jonah. We'll catch up soon. See you soon. Later. [MUSIC PLAYING] Nothing said on the 1,000X podcast is a recommendation to buy or sell any investments or products. This podcast is for informational purposes only. And the views expressed by anyone on the show are solely their opinions, not financial advice, or necessarily the views of block works. Our hosts, guests, and the block works team may hold positions in the company's funds or projects discussed.