Why Japan Could Trigger the Next Global Market Shock #121

(upbeat music) Welcome back to Crypto Options Unplugged, everyone. I'm Imran Laker from Options Insight. I've got my man Dave from FRO&T. And today's guest is fan favorite friend of the show, Greg Magardini. How you doing, man? Doing well, thanks for having me on. Thanks for coming all the way down to London to see us. Yeah, absolutely. I love London. It's a great place to be here. Yeah, because you're based in the US normally. So, you know, normally, you've got so many great macro views and you've been a crypto OG forever. So like, there's so much we can talk about. But one of the big things that, you know, me and Dave sometimes talk about, and I know you're really into this story, is about Japan. Yeah. So I really want to jump into the weeds on like, what your thoughts are around Japan, right? And that whole debt story, yeah? Of course. But anyway, before we start that, what are you up to these days? Yeah. So right now, I'm on a nine month sabbatical. Nine more months sabbatical. Hang out. Nice. Spollowing the markets and traveling the world. And it's nice to come out here and see you guys and kind of chat about what's going on latest. Cool. It was interesting. I was here last year with you guys. And we've seen quite a lot of movements in sort of the risk assets, something's actually going to Bitcoin going the other way. But last year we had a global tariff scare. And we had micron trading $70 to share. We had gold around 3,000, 30 year bonds at about 495 basis points. The world looks quite different. 10x on the micron, gold hit above 5,000. Exactly. If you had told us back then that you'd been to the future and you've seen what risk assets did, our price prediction for Bitcoin would have been like 200K. Right. Right. And instead, this is where we are, like 65K. Yeah, it's kind of interesting. I'm curious to see what you guys think about this, but-- Yeah, we've got to jump into trying to figure out why. That is-- Yeah. If that makes us more bullish here or bearish here, I know he's bullish, but you know. But before we do that, I mean, this week, it's all about the Fed, isn't it? Now, we've got a taco that we were expecting over the weekend. But the market's more fixated on will they hike or will they not hike? Yeah, well, I think the Fed and also obviously some big earnings as well from the sort of big tech companies. But yeah, I know. Look, market's now pricing in decent chance. So 85% as a blockchain. I just-- I don't know. I just feel the market's getting way ahead of itself. It's like everyone forgot how soft that last inflation print was and that inflation at the headline level is purely energy at this point, which-- We've dropped $10 over the weekend. Yeah. Now, I get obviously-- we thought we had this sort of peace agreement. And now we've kind of gone back on that. Well, spiked quite sharply. But I don't believe the Fed and power who's-- Walsh, who has shown a willingness to look through sort of short-term moves in inflation bit from tariff or certainly oil, they're going to start chasing that one around. It seems a bit crazy. I think given the inflation pulse underneath energy is not that strong. So I think they're going to be patient. But the market's kind of panicked and sort of priced in-- Yeah. --starting pricing high, aggressively again. I just feel it's overdone. I still feel the next move for the Fed will be a cut. And particularly if we get a sustained sort of cease-fire and peace agreement, then quite quickly, oil's probably sub-70 and inflation. And in fact, then we're in the disinflation beside of things. Even though we had pop inequities first thing yesterday because we got the taco, we got the kind of pause on strikes. And but that wasn't enough to hold markets up because the AI trade is under pressure again. Yeah. Again, like with that-- I mean, we-- our sky is encrypt though, right? We've seen these exponential trends. And then just one way can only ever go higher. And then you get huge correction. I think the AI trade's having that moment. Nothing's changed. The narrative I think still solid like long-term. I mean, China's coming out with a few little bits, like they've got this big memory maker and this big memory and chip makers coming out so they're trying to become more self-sufficient. So the story is that there's going to be less demand for the US chips that are gone parabolic. And that's now correcting because of that. Right. Not token costs and spend and all that sort of falling. But in many ways, the demand for compute and for-- We only go higher. We'll only go higher. And the thing is, when we have these corrections, we all look for what's driving it. And sometimes, for me, it's just positioning flow. And you think we had this huge one-way trade into all things AI attack and chips and memory and what have you. And then within that, then people start building leverage and then the momentum guys sort of jump on it. And then when it starts to reverse, then quite quickly, it comes off pretty sharply. I think that's all it is. I agree. I don't think it's done enough damage to the move yet to suggest that the bull market in this stuff is over. No, I'd buy any stuff. I still actually would argue that we're quite early in it despite some of the huge moves. But you've been looking at this stuff where your thoughts on that AI space? Yeah, I'm not an expert on the AI space, but I think the credit side of it is pretty interesting. So obviously, we have US yields, especially the back end around a little over 5%. Then we know that historically, wars are expensive and create large deficits and create a large supply or demand for borrowing supply of credit. And we know that CAPEX is essentially funded by a lot of credit as well. And so if you'd mentioned China's AI models start to eat away at the potential future cash flows, the US models, which essentially are priced in to finance that credit, that's kind of interesting. If there's competing credit needs from geopolitical war financing, that's kind of interesting. And so I definitely think the credit side of the equation is maybe a vulnerability globally. And back to the Japan standpoint. If we look in my mind, the way that a sort of a credit default, not a default, but a credit event would occur, is that the back end would start to float higher in yields. And that would kind of trickle up to the front end. So central banks can really control the front end historically without any sort of twist. And the back end is a lot harder to manage. So we've been seeing that in Japan where we've had 30-year yields go from something like 60 basis points to now 4%. That's a massive move, isn't it? Massive move, massive. And so if you own that paper, that hurts a lot. Think about one of the things that-- We say if you own that paper, doesn't the bank of Japan just own all that paper? So then how does that affect the currency is really the next question? Because the central banks can buy all the paper. They can actually just monetize that. They can own all the paper and just expire. And it feels like they've effected to be done that in Japan. So what would happen at that point is that the currency becomes the source of losses. Because then you lose faith in the currency having any sort of purchasing power. And I think that's what we're seeing now. Now we're seeing the bank of Japan try to use FX reserves to prop up the currency. But if you're going to kill your currency, everything that you own that's not denominated in your currencies essentially, you're safe haven bet. You don't sell your goal to defend your currency because you didn't have less goal. Same thing if your FX reserves are US dollars. Especially if your interventions keep freaking failing. They seem to end all year. It has to fail. Because structurally the story is still the same. The debt to GDP is 250%. The yields are rising. And I think that's where it gets really interesting. If for example inflation stays persistent in the US, even though it's softer, it's still persistent in the sense that it's above the central bank target, long-term target. If that stays high in the US and globally, well, the front end of the curve here in the US will stay higher trying to combat that. But a country that has 250% debt to GDP, they have to pin it down because the unbalanced sheet interest rate is going to be too high. If your debt to GDP is 250%, if you have something like 3% interest rates at the front end or unbalanced sheet costs, that starts to get close to your whole tax revenue base pretty quickly. You just have to finance a debt. Forget welfare, for your aging population welfare, forget building out military, back that geopolitical risk point. Forget all the normal societal goods that you have to provide for. So that becomes sort of the tricky part. And so then you get the yield or interest rate differential between US currency versus Japanese currency. So right now, at the front end, it's about 3% difference. So I can just basically sell the yen by the US dollar, earn 3% carry. I could probably just hedge that with a long US treasury. Now I'm making call it 6% or 7% on an inversely correlated sort of asset portfolio. That gets really interesting. So I think the currency is-- It's just a slow moving trade. Yeah, I'm surprised how slow it is because we've talked about it before and I've speculated on the idea of buying calls on dollar yen, right? Because they're quite cheap. We were, while back we're calling flat, $200 yen, right? Yeah, but what we were saying that because of the interest rate differential, you're getting like a benefit in the forward, basically, right? So the upside calls are priced off the forward and that forward is much lower than it should be, right? Yeah. So you're getting cheap calls, essentially, right? Yeah. This is the most interesting trade ever because there's two phenomena. So as you're pointing out, like if we just look at the term structure of, you know, the, I look at the CME futures, so they're inverse. They're like their Japanese yen dollar, but basically it's a, it's a contangle curve. So, you know, the future value of the yen is worth more than the spot value of the yen. So it kind of falls down the curve, but the interesting part is that FX is such a low-vol asset that the volatility is low enough where the contango compensates the theta. Exactly. Because we get free camera. Yeah, it's a bit like what happens in the VIX curve often, right? I was like, when you buy puts on the VIX, because of this, this is rolled down on the VIX, the futures trade expensive to the spot. So you might have spotted 16, you might have futures at 18, and you can buy the 17 put, and it's like really, really cheap, even though it's spots trading one volume, the money. So it's pretty much exact same trade, but on an FX basis, right? So that was the idea, like buying calls on that, but when I see it's such a slow motion train wreck, like, I guess the idea is you've got to buy quite long dated calls, right? Is it one year would you go one year, two year, like how far out would you go? So what I would do is I would do in the money call spreads one year out. And so what I'm isolating there is to fault the roll down of the curve. So now if the yen just stays where it is, just the decay of the interest rate or the differential of the interest rate essentially makes the call spread full payout. And you buy it something like 56% of the time. That's the way to run the carry trade. That's essentially the safe way to run the carry trade that will never blow you up. Exactly. And then on the other side of the leg, you get long treasuries because the only thing I will blow up that trade is let's say we have like a global contraction and now rates everywhere go down to zero. Now that interest rate differential disappears, the yen rallies because it kind of gets bailed out by global deflation. So the way you hedge that is by just being long treasuries. But what's really great is now you have essentially a very convex trade on the call spread. And then you have a convex trade on the treasury side of the leg and they offset each other. And you can leverage was the was the treasuries a convex trade because the dollar value of a basis point increases when rates go down and decreases rates go up. So I think about. So there's convex to the yield basically convex to the yield exactly. I see. Interesting. And if you want to even more convex, you can just buy calls on bonds, right? You don't even have to buy the outright bonds. Yeah, you could do that. But there's time to K there. Yeah. So that's the trade off. Then you're, then it's more of like a price bet as opposed to like a carry bet. Okay. So I like to carry bet because it's an offset carry bet. And then this is like a problem macro hedge fund trade we're describing here. Yeah. Yeah. So two of the most liquid assets in the world, you can like throw billions of dollars at this trade and not even move the market. I probably don't have billions of dollars to throw this trade. Someone out there watching it does. And then you can put the trade on and so that's the thing. It's true. It's true. Someone out there probably does. Yeah. So get giving you a few. I mean, one of the things that I've dismissed for a long time, like people talk about a carry on wind. And I think. I think people miss. Understand the young caron one. We had that blow up what couple of years ago. It would be August. It would be the two year anniversary. Yeah, which for me was more of a momentum kind of trade where people were, you know, we were short yen, long as that, you know, all this stuff. And that kind of momentum on wind. I think when people talk about the big young carry on wind, they're talking about the, what, four, five, six trillion dollars of domestic yen money that's sat in foreign equities and bonds and have you and all that being repatriated back home. And firstly, a lot of that, a lot of that money is held by like the big pension funds and like life of funds in Japan, which having covered some of those in my time in banks, that they, they rarely make big adjustments to their portfolios. In fact, what they often do is, is make hedge adjustments on the FX and capture differences that way. And particularly in trades that have been working for them where they're like long NASDAQ and things like that, unlikely that they're going to go right, let's just come out of that and go buy a bonds. In fact, what it feels to me is happening. You're actually seeing capital outflows because now they're kind of hiking rates for the wrong reasons. Right. They're kind of in this stack flationary scenario and the constant sleep and the currency's weakening. And I keep trying to hammer this to people that in the carry on wind that you're talking about, yen would be going higher, not getting hammered like it is. This is a very different thing. How, how are you thinking about that in terms of what that means for broader risk assets and what's going on and even has that feed into crypto in your sort of mind? Yeah. So just to kind of give context to sort of those traditional flows in the yen. So yen historically has been a creditord nation. They have large net exports, so there's capital to reinvest. And so what happens is because the interest rate historically in Japan has been lower than the rest of the world, what people would do is they would finance long commodity currencies like the Aussie or the CAD that had higher yields by being short the yen and long those commodity currencies. That's essentially the same trade as being long equities, being long global growth. It's just positive carry for the long global growth beta risk. Now what happens is that everyone's in the same position at the same time because there's one place where rates are essentially zero and that's Japan. So everyone's short the yen and long these commodity currencies. It's basically a short ball trade where it pays carry most of the time. And then once in a while there's a sort of an event and everyone heads for the exits at the same time and then it takes back five X, you know, your risk essentially. But that's the historical flows and you can see that in the options market in the yen. Like yen calls, sorry, dollar yen puts, it's annoying to talk about this, but if we're talking about dollar yen, I'm talking about puts, the puts were more expensive than the dollar yen calls because of this. Crash down slowly grind up. Now the world is different and if we have sort of a credit crisis unwind, I personally think dollar yen can crash up. I think you can actually get a panic move. Yeah, I mean, it's the end game, isn't it? It's the end game move, right? And the question is, it's really hard to know when the end game actually comes because you can see it. Even like you go back to the financial crisis of '08, there were people calling that in '05, '06, right? But it didn't happen to '08, right? So it's like, when this end game occurs, we don't know, but I don't disagree with you that Japan is at the forefront of that end game in terms of credit, right? Like the money printing and the QE that's gone on for decades and stuff, they are at the front of the Q, basically, right? So if we're questioning how it's all going to end, but how it ends in Japan, it's going to end, basically, right? Yeah. Baker upcy happens slowly, then it happens all at once. Yeah, well, that saying is so true. Yeah. And the other ones we invented, QE, which is also a different kind of thing. So do you think that is the source of the next GFC, basically, like type of end? Yeah. So I think it's, yes, if the next GFC type of event is a credit event, I think they're the forefront and they are the canary in the coal mine and they're the place to look. I think the Japanese people are very strong people. I think, as a cultural will get through it, I mean, that the fact that we're able to get to 250% that to GDP is a testament of, like, yeah, the cultural fortitude to get there. I mean, they like, they bought their own debt. They're like, it's cool. Well, we trust you guys. Like, that's cultural fortitude. But the latest, the last year in long-end yields is probably like eroding that trust a little bit, maybe. I mean, at the end of the day, if there's global inflation and geopolitical uncertainty expands, and that's a matter of what domestically, what the investor base does, that interest rate differentials are going to exist. So now let's talk about the crypto read through though, right? So what's, where does crypto fall into this? Because we mentioned it at the start, right? We had risk assets flying over last year. Bitcoin, or the, I mean, I remember us getting together saying why we love crypto, the crypto story, why we like Bitcoin, you know, the last time you're on the show, right? It was like currency debatement. And the adoption story, we were getting the adoption from all these ETFs and all these trad-five firms coming into the space. And the massive build out that we've seen, we got regulatory clarity as well. We got currency debatement in the form that gold went from 3000 to 5000. So that feels like a currency debatement story, although you could debate that. Why has crypto just been left on the shelf? Like why, why is it not participated? Yeah, it's so interesting. So I'll put this in two parts. One is, I hate to give credit to the four year cycle because seasonal cycles seem so basic to me. But so far, it keeps playing out. So empirically, it seems to be true. If the four year cycle has any valid validity to it, we just had a four year super cycle. We had institutions, the ability to buy with the ETFs. And we had the most the Ibit BlackRock ETF is like the most successful. >> Yes. >> Yes. >> Yes. Clearly they did that. Then we had corporate treasuries ad and we've had the whole fiasco with MicroShadgy recently. But we had corporate treasuries adding crypto. So again, they got long. Then we had the most epic regulatory environment in terms of friendliness towards the crypto space that we've seen since essentially the beginning of crypto. So again, that gives support to the narrative. So I think- >> But timing wise, it sounds like what you're saying is, everybody front-run that trade. >> Exactly. >> So when the news came, there was no one left to buy it. It was like sell the fat type thing. >> Yeah, exactly. >> Okay. >> I think it's positioning. >> Yeah. I think as well, like you say, I mean, I kind of was dismissive of the four-year cycle. Just because I've always linked that to the macro cycle and the macro cycle has been extended, which it has. And certainly, we've seen, obviously we've seen the equity moves. I guess there's, there feels like there is some reflexivity in the four-year cycle and people said it. I also think as well, which I've seen others mention, the move above 100K is just psychologically a level that- >> It's like a whale take profit. >> Take profit. And also the- with the big institutional flows, some of these walls have actually got the liquidity now to sell into, which they wouldn't have had a few years ago, without destroying their own market. >> And then I- >> But I certainly think as far as retail is concerned, that capital is quite flighty in a way, and it's all gone into AI and that trade, which is- >> Yeah, so the retail been definitely parted and gone elsewhere. >> Which I wrote and we spoke about on this show, back in June, actually saying that SpaceX, for me, was going to be a local top for the whole AI tech trade. SpaceX was always going to tank post-IPO. >> Is it not 100 yet? >> Is that close? >> It's getting close, yeah. But that feels like it has kind of just topped out that trade. Again, I think you're going to look for levels to get back into that trade. >> So the question is that capital, I think, is rotating back, which is why I think Bitcoin and crypto's at performing at the moment. >> Marginally though, it's a marginal at performance. But the question is like, if we think the AI trade is just correcting and it's not over, then surely that retail money, like rather than flying into crypto, isn't it just going to wait for the next wave hire in AI and get back in there most likely? >> Potentially. Then you just look at now, there's kind of risk reward elements. I just feel like people are going to start looking at crypto again as whether that risk reward is. For me, it stacks up obviously better in crypto right now. I still can see some of the chip names and everything going to new record highs by the end of the year. We'll kind of settle out. But then there's potential free four, five, X moves to come in crypto land that I think some of that retail money will kind of look to sort of come into. Then we've got the four-year cycle reflexivity kicking back in. That in theory means October, November, we start to really climb, I guess. >> Yeah, I wanted to get back into crypto. I'm looking for the move to get back in. My mind is still trying to validate the four-year cycle. Why would it continue to be true? I think right now if I look at the CME fed funds watch tool, we have 80% probability that rates are higher in September. Who knows if that's true, but let's just say that that is right. That's a reason for capital to maybe come out of crypto a little bit more. I think the big one is the midterms. If there's a delay in regulatory, regulatory clarity from midterms shifting more democratic, that's also another reason for potentially crypto to go lower. >> I think that's an entry point though if that comes later in the entry point. >> Yeah, yeah. >> I don't think that it's always hard to try to call the bottom same with the tops. It's full-sare and but if I'm just going to assume that that bottom is going to happen in October and November, those are the supporting points of evidence. If I want to start getting along now, you said something on the podcast, not so long ago, where we keep seeing these cover-call sellers, overriding that call wing, you could just wait until Bitcoin starts climbing higher and then buy the calls. Now, I think that's so interesting. There's optionality in sort of their shortfall. >> You wait for the breakout because it's such a technically driven market as well. It's like you wait for the key level to break on the upside and the vols just going to be at a discount anyway from all the overriding. So you just scoop up some calls and ride that wave basically. >> Yeah, you're given optionality, they're blindly yield chasing or yield harvesting call strategies. >> Yeah, it's so prevalent, it's insane. Vols been trending lower for the last few years and we're seeing front end on a 23-vol encrypt. Do you remember the days when you started G-Vol? That vol used to be 100, pretty much all the time. >> Exactly. >> Even got to 200, I remember in the front end, I remember selling it there. But are you shocked at how low vols got that is at like 20, 30 in these assets? >> I am. And if we look at gold, gold's the same kind of value prop as Bitcoin in a lot of ways. Gold in January had a 44 of all, 30-day vol, 44 percent, G-VZ is the index or the gold vix. That's very interesting. That's basically where Bitcoin devol right now is at 38-ish, 38 or 40, and gold right now is at 24. That's pretty insane. And historical vol for gold is about 14-15. So that pretty much three X. If Bitcoin vol three X is your back at the 90s. >> Yeah, it's going to be a lot of cool selling to get through to get that vol back there or to thought. But you've always been a fan of Ethereum. I remember like we had you on the show before and you've actually preferred being long Ethereum to even Bitcoin at times. What do you make of that story now? Are you still a fan? >> I know. You know, okay, good. There's a change. >> There's a change. >> Tell us. >> So I'm looking since 2022, the Bitcoin dominance ratio went from 38 to 56 percent. And the ETH dominance ratio since 2022, really the bottom to where we are now, went from 20 percent down to 10 percent. If ETH becomes altcoin instead of a major pair, man, altcoins have been such a hard trade. And if it starts getting recategorized as that type of asset, it's going to be a hard road ahead. If anything, I want to own ETHVAL. If I'm playing before your Bitcoin cycle, I want to own ETH downside ball. Like I think that balls cheap. I think that asset can go down lower. >> That's super interesting because the skew in the long end of the curve is more towards it's less put heavy than Bitcoin is. So I feel like institutional hedging and has kind of led to a higher put skew in the back of the curve in Bitcoin over the last year or so. ETH has still got this kind of rewriting that idea that, you know, ETH's just a discount. It's going to massively re-rate higher at some point. And so they're not really paying up for the puts in the long end on ETH, but it sounds like that's a trade for you. >> Yeah, that's a trade for me. I just think ETH can get reclassified as an altcoin. >> But do you not think the tokenization story? Do you not think like a lot of this trad-fire adoption and the stablecoin rails and the tokenization of real-world assets, the fact that that's all coming through Ethereum as a chain, right? Does that not benefit Ethereum longer term? Well, not really. >> I think that narrative is super reliant on regulatory clarity. If we have any sort of delay from the midterms on that, I think that changes the narrative a lot. >> Good, good. I mean, obviously ETH's been outperforming and it does feel like sentiment around ETH, at least, has improved. >> Certainly, in the last month of my career. >> The Robinhood stuff probably helped, but yeah, but that's not making you kind of-- >> You can't get back above 2K. I don't know, that level was a-- >> That is a big level, 2K. >> Yeah. >> People have been looking at it. I don't know. So you're not in the Tom Lee camp then? >> No, I don't know. I think it's kind of a scary acetone right now. >> But you know if I'm right-- >> I think he probably still thinks it goes to 10K by the end of the year. >> What's the whole of that? >> These outlandish predictions do wind me up. Like, look at the vol-do. Look at the annualized vol at like 50 and realize that when the assets trading sub 2000 for you to call a 10K price target in six months is a bit silly, right? But these guys don't mind. >> Jim, but you know now I've got visions of this being taken out. And we got 10K at year ends. >> Do you know I'd be happy with me, I own something. >> You know when a clip of people laughing like back before Trump was first president, when people laughing, Trump will be president. >> Yeah, people laughing. >> Going back to Japan, like, because I do-- and I talk a lot about Japan and I think that's interesting. And like you say, like, and a big part of my thesis for years has been like a publication of the Western world because we're following down the same route. All Fiat currencies go the same way. Never too bearish on a dollar on a relative FX basis because the dollar's still a cleanest shut, but Fiat currencies generally are all going the same way. Like, like, for me, it feels like like everyone jumped on the debatement trade last year when gold was sort of flying. And actually, again, we've spoken about that. In terms of debatement, when you were looking at, like various things that you could look at in terms of time premium and things like that, there wasn't actually debatement signs and actually it was more clearly central bank buying and whatnot. But is this the thing that we're not paying enough attention to in terms of the basement tray coming back into favor? Because I'm holding the way Japan's going for me, they're going to need to enlist the help of the US through swap lines and stuff like that if they want to keep a lid on the currency. It's going to need small liquidity. But then also, do you feel that kind of debt dynamic and debt sustainability fear is what's bleeding into the US right now or is it just oils up so US yields are up? What are your thoughts around that? Because for me, this is all leading to all these. They're going to need some sort of financial repression, which ultimately means liquidity coming into the market and the fear currencies take the hit, which should send Bitcoin gold and everything else back higher. But what are you thinking around that bleed into the US and where this ultimately leads to for liquidity and any policy responses? Yes. So when I think about the Japan situation in terms of liquidity, I agree with you. The only source is in the currency. I think at some point it just decided it's okay to monetize the debt. And I think that's the right move and it will deal with the effects of a currency of $200 to $250. We'll figure that future problem out together. That's kind of, I think that's the only path and I think that's the best path to move forward. If I were them, I would buy as much things as I can with my yen and plan to kill the yen after I bought all the things that I can. That's how I would think about it. In terms of how that affects the US or US support, the problem with US helping is that I don't actually think they can that much because their debt to GP is like $12 trillion. It's not quite as big as ours but it's kind of in the same ballpark. It's pretty close. It's not like a small economy. So I just think they have magnitude in the size of the thing. There's no easy bailout. In terms of how that ends, I think credit crises are typically aligned with geopolitical risk. In my mind, the way it probably plays out is some sort of regional conflict that requires military spending and then the bet there is less killer currency, build up military and winner take all type of deal. What's interesting to me of all of this is the whole fiat system is built on confidence. That magic fairy dust of confidence and credibility. What's the US debt at now, like $37 trillion? It's crazy. It's kind of, "When do people start to question that sustainability?" At some point it's 50 trillion and then it's 60 trillion. Their kind of game right is to keep the sense of, "We've got this under control. It's not an issue. Maybe if they get this explosion and productivity and growth with AI, then that kind of solves some of it." Just feels like we are nearing some of those end games. Again, I don't think we'll ever see a global financial crisis ever again. In the sense of, we've got the tools and stuff to manage it. They're getting quicker. I mean, I've argued this for people. Just look back over the last few years, we had a guilt crisis, guilt blop. It was distinguished pretty quickly. Even at the time when the Bank of England were hiking rates, they essentially went into dual curve control and stabilised the yield curve. So Japan have done that consistently. We had the regional banking crisis in the US quite quickly. They sort of backstopped that Fed balance sheet exploded in the space of a couple of weeks by like a few hundred billion. So that'll be the answer to all of this. They'll just find ways to essentially print money. It's just at one point. Maybe now with social media and everything and the debatement trade, people are kind of understanding that the currency is the escape valve and all of this. I still am talking my own book massively, but I still feel that that's where potentially you get this sort of God-candle in a Bitcoin one day where you wake up and go, "Yeah, fast the world, the world is just. " Yeah, like the US, the US, the UK was under so much pressure that they've come in and had to buy it all up and then all of a sudden Bitcoin just got back. So I want to pay, I want to pay, there was other cut here, right? Because the point you made about like GFC type crises being less likely because of the way they react to it and the way they spray their hose at the problem much faster than they used to. That has been clearly evident, right, in like you said, the regional banking crisis, COVID, same thing. They're backstop the credit market after 30% draw down in stocks, which was not as bad as the GFC. So yes, they want to backstop stock market, right? There is a backstop for the stock market and the credit market. And that's why the depth of corrections of those markets tends to be shallower than in the past, right? However, what did crypto do on these steep draw down events, right? In COVID, crypto got wiped out, right? And you know, COVID, crypto, it's had a pretty bad wipe out last October because there's no backstop in that market, right? So the issue, the issue we've got in crypto is that when we go into a crisis in risk assets because there's no backstop and no one, no government player gives a shit about crypto, it tanks 50 plus percent, even though stocks can't, right? So you get these wipe outs in crypto. So while I agree with you, one day the market might realize that crypto is your escape valve from this shit show that is the government credit market that all deserves to go to zero. Sure, I don't know when that realization occurs, but in terms of how we've seen market, like, play out every time. We've seen the market that has the least backstop has the deepest drawdowns and crypto and it's a big, yeah, of course. Of course, and because of liquidity and I in a big sort of crap out risk off of then all correlations go to one. So March 2020, gold drop, treasury drops, you know, exes drop, Bitcoin dropped more, right? But then it's very, very short lived. And to be fair, even during the regional bank crisis, Bitcoin got hit and then the space of all, you know, got hit pretty hard and then, and then like ribs. So it's when the response comes. I don't disagree that it has a worse all but. And I'd actually argue the Fed came more about the bond market and they do about the equity market. Yes. But then all fees into financial conditions like this. So into twine. Yeah. But once they, once they act to stabilize the bond market and by proxy, I guess the equity market, then that stabilizes all markets because ultimately the response is like the equity response, which is why again, in 2020, if anyone was, you know, it was smart enough for, you know, had the conviction in that we're just looking for the levels to buy Bitcoin by gold because of what was coming. There's one more fragility though that crypto has that we haven't talked about and that is Mr. Sailor, right? And Greg's got some good opinions about this, right? So, you know, I've always been saying I make, it makes me nervous when someone points a target on their own back and telegraphs this monstrous position because when they need to get out, if they need to get out, there's going to be no bid, basically, right? Yeah. Now, you had some interesting thoughts about what they've been up to recently after the little wobble that the stock has had, right? Yeah. So do you want to share that as well? Yeah. So I think the fact that Michael Sailor has kind of shifted his long only at any level, sort of attitude towards a, let's be kind of strategic with our balance sheet and maybe sell some Bitcoin back, buy back some MicroShadji shares or sell some Bitcoin and buy back my preferred shares that we're trading at the time, 25% discount. That is the right move because if you're willing to buy and sell some Bitcoin to defend your balance sheet or not your balance sheet, but have cash reserves and defend your capital structure in a way that you advertise it to be, that allows you to kind of go in and out of the market in a way that's not destabilizing. If you are long only at any cost, you get the target on your back. Once the target's on your back and you just wait till you need financing costs, whether that's, you know, you ran out of capital reserves to pay dividends or you decide to cut the dividend and now you can't raise more preferred capital, whatever it is, and you're forced to sell Bitcoin, well then the bid disappears and now you're kind of, everyone's waiting for you to pukes so they can essentially. Yeah, and like you said, selling some Bitcoin was value-ocreative at the time because he's then able to buy back stock discount basically. Yeah, and basically we didn't buy back stock though, he didn't actually buy back stock, we don't think, do we? No, no, he's right, he's raised that, the cash buff is right. He's raised that. And then enabled him like $1.25 billion worth of essential selling Bitcoin to buy back capital structure, whether it's preferred or stock. So I mean, I guess my only concern is the size of selling was kind of a drop in the ocean relative to the size of the position. So if we were to go into a GFC type of vent where crypto markets broadly sell off 50% plus, right? does he get to a stage where the the size of the sale is no longer a little drop in the ocean, it's a chunk and the market doesn't have the appetite to absorb it basically, so that's a concern. Right. I'm not concerned about that because I think now he's able to manage the balance sheet to pay off dividends or adjust the capital structure in a way that doesn't get him cornered where he has to sell a lot at one price. Which is a point I've made. He's got what two years worth of cash now to fund the prefs and everything else. If we did have some event tomorrow and Bitcoin dumps another 50-60-70%, he's not false to sell any if he's got cash to meet his obligations. That's why it kind of feels fine to me. Again, I still feel if there was a GFC type of event, the dip will be so brief and short lived. For me, I almost want that event to happen for Bitcoin because the only response I'll have is to just print a shit ton of money. That's the only response I have. Under water, no one's going to sit and go, "Oh, hang on, no inflation's a bit higher. We're not doing that. We're going to wait and see." The world's puking. They'll do that. I don't know. It does maybe feel like we're looking out Japan and some of us creaking in the bond market in the US. Maybe we are nearing those points. I still find it fascinating. People push back to me on this. I'm like, "You know the Fed are still expanding in balance sheet again, right?" "Oh, yeah, but it's not QE. It's not QE. They're doing it because essentially to provide liquidity into the front end, which has become as a result of their start to skew issuance to basically fund this deficit to the front end. Now essentially the Fed are buying and they're left tapered out those purchases from 40 billion to 25 billion. But that'll increase if it needs to. Again, if we start to get some funding market stress and as we saw at Q4 last year, and it's like, "This is the whole fiscal dominant story. That is ultimately what will dictate Fed policy and where balance sheet goes and maybe to some degree where rates go because the thing is how do we keep sufficient or ample amounts of liquidity in the system?" And kind of came inflation to it. Yeah. But the liquidity side is more important to them than the inflation side because otherwise the whole Fed system blows up. And they do it in a way of saying, "This isn't QE. This is just a technical operation." As they said around, and then people spend ages on Twitter arguing, "It's not QE. This isn't good for risk. It doesn't mean anything for risk. They're just printing money. That doesn't actually go into sight." No, they're debasing the currency because they're still printing money. So essentially fund a deficit that is not sufficient liquidity in the system to soak up. So they're going to be the liquidity provider of last resort. And we're seeing all these things play out. Unless, yeah, I sit there more and more bullish Bitcoin every day because we see where this is all heading. It's just timing these things. So it sounds like you're very Bitcoin sort of biased as opposed to, like you mentioned, if East becomes an alt, you don't want to kind of own it. But does that also mean there's no other alt that interests you? Is it Bitcoin is the only one worth investing in? Probably by the dip in it later in the year. Or are there other things you're interested in? Is Salana something that's a viable proposition? Does it have a use case long term in your opinion? Is this new hype token? It's been all the rage, all the hype. Is that something you put money into? What are you thinking? Yes, I would put money into Salana. Yes, I think you trade hype. I just think those are very different trades. We've been talking about the macro picture and rates of global deficits. To me, that is purely a Bitcoin trade, a gold trade, maybe a silver trade. But Salana hype is kind of like an exchange trading, adoption trade, on-chain equities, things like that, pre-IPO markets. Those are interesting. But that's not really like the global macro trade. No, it's not macro trade, exactly. Salana is interesting because if ethos become an altcoin, Salana just by default gets relatively more interesting versus eth by ethos loss sort of thinking. And then Salana has a nice yield to it. I think staking Salana is like 5% something like that. So that's cool. I like something that yields. Remember we had a bank strategy just on this show quite a while ago talking about the big use case in where he was bullish Salana was because of micro-payments? So it's saying that was something that he thought was going to be, rather than the mean coin casino that was driving upside in Salana previously, he thinks it was going to pivot towards the chain where you could do these micro-payments. That's cool. Yeah. Great. Just to clarify, because when you say, because I think of ethos and altcoin in a way, I think there's Bitcoin and everything else is altcoins. But do you just mean like you've always seen, well, people thought of Bitcoin and eth and then everything counts. But if eth just becomes everything counts, then it's interesting. So we've jumped around a lot. It's been fascinating. I mean, there is so much going on. You've always talked in for hours. Yeah, and I love the dollar yen in the trade. We've kind of, we've spoke a little bit about agon bars. You think you've got some calls later, yeah. Yeah. But how would you be positioned in Bitcoin and stuff right now? Just probably to wrap this up, I guess. Yeah, that's a great point. So I think right now, I'm personally, the chuck of my positioning, I'm just waiting to see how October and November plays out. But if I wanted to get long right now, I think ball is pretty low, owning that call wing, and you can own it, not, I don't mean like 30 days out, you can own like two years out, something like that. Interesting thing about wall dynamics is if the market trends, obviously you can hedge out trending component, but still you can play optionality for the trending component in a really interesting way. So like if I just did like this mental math exercise, if you take a 19 ball, I'm going a 19 ball asset, which is about, you know, 1% a day on the 365 calendar year. If the market trends, like it goes up to two times and then back down one, well, that 19 ball asset over a year goes up over 100%. And so that's like five standard deviations on a 19 ball. So if we get a trending market, which I think crypto, I mean, Bitcoin has trended many times before. It's been around since what, 20 2009, so 17 years, six out of 17 years, Bitcoin has rallied more than 100%. And so that upside optionality that's being given to you, I think if you go out two years, two and a half years, it's given to you at 44 of all. If we get any sort of trending though, like that, that's great. Like you just, you'll get, you'll pay off. So that's one way to nibble and then you wait till October. And if you do get some sort of panic spiked down, I'll sell the, if all pops, I'll sell the put and buy some out of the money optionality or an essentially do a risk reversal, but short the put side long to calls. And if it doesn't really make a big move, then I'll get some more, you know, 25 delta, 15 delta calls, false. So still, still looking to position for, for the next sort of bull market, if you like. Yeah, I want to position for the trend. Yeah, yeah. Which we haven't been, and you've always said in round like that's the nice thing about where, particularly where topside bulls trades right now, you can wait, you can wait, you know, you don't have to be early on it, you can wait. Yeah, and it's one of those things that you can decide like how much you're going to invest in this idea and this trade. It's like you don't have to be so cute that you put all of it in at the same time, right? So like Greg was saying, two year vol is super low, right? Yeah. And so you might want to actually take a stab at like a two year call right now. So you're in with like a quarter of your, of your pot that you want to invest or whatever it is. But then, you know, you can average in over time. And then when you do get a break of like a key technical level, like 70 low 70 Ks, I think is a super key level, you get that break. And you can look at a shorter dated option because they're suppressing it with all the overriding flow and you get some leverage to that, to that breakout basic key. Can you actually get much done there and like two year times until you're mature. I haven't done it. I haven't traded to you much, but yeah. Yeah. Oh, in the ETFs. Yeah. So, exactly. So I'm not sure what the longest expiry on dera bit is right now, but I'm going to guess it's closer to a year, year and a half. Right. Yeah. But yeah, two year out, maybe, maybe you have to go to the ETF option. Yeah. Yeah. Interesting times. Yeah. Great to have you on the show, man. Yeah. Yeah, really, it's have you all. It's really good. I hope you guys enjoyed that. We certainly did. And we'll catch you back in next week. Cheers.