Bitcoin Billionaire Reveals His Current Investing Strategy

[00:00] If Bitcoin has no retail bent, Bitcoin is worthless. And I think that's what people don't understand, which is why I say all these bills, who cares? Just DK every single one of them. I hope Trump vetoes every single one of them. We don't need it. We didn't need it in 2009, we didn't need it in 2018, we certainly don't need it in 2026. What's going on, guys? Today we're going to have a great conversation with Arthur Hayes. He's the Chief Investment Officer at Maelstrom. And in this conversation, he's going to explain what's going on in the macro environment, how the Iran war is likely to impact inflation, deflation, gold, Bitcoin, and other assets in the traditional market. And
[00:31] then we get deep into some of the crypto stuff that he's really excited right now. Hyperliquid, Zcash, prediction markets. And then Arthur tells us that he thinks that insider trading should be legal. And his explanation is going to blow your mind. It's really going to make you think much more critically about what he's talking about and why he believes that. Here's my latest conversation with Arthur Hayes. All right, Arthur, let's just start with the Iran war. Obviously, we keep going back and forth. The war's on, the war's off, we're going to have a ceasefire, we're not going to have a ceasefire, oil spikes, everyone's freaking out. What's your read on what's actually happening here, and should investors be worried?
[01:02] So, basically, I have a a chart up that I made on my on my Bloomberg. And it's um a spread between the first and the sixth contract um out in the future for WTI WTI oil futures prices, right? And so, I want to know know the spread between the two. So, obviously, they pretty much track each other up until was it February 28th, whenever uh the war started. Front month blows out to the outside because obviously we have this a bit you
[01:32] know, supply disruption, shut-ins, inability for lots of tankers to get through the strait. And obviously, you know, pretty much the spot price of oil is very expensive. But the back end, yes, it's gone up a bit, but it hasn't gone up nearly as much because I think the market assumes, whether or not that's the right assumption or not, that over the, you know, short to medium term, something is going to some accommodation is going to be made and oil will go through the strait. Right? And so that's why this,
[02:03] you know, back end oil futures prices are not as nearly as high as the front end. And so this is the spread that I'm tracking. All that matters is will the oil go through the strait or not. It's very unfortunate there are all these people dying in the Middle East, but I'm sure for most of your readers, they don't live there, they have no family members there, they could give two [ __ ] about what happens in the Middle East as long as gas price is not $6 a gallon, right? So, that's all that matters for the most majority of the people around this world is can I get on
[02:34] my flight? Is food cheap? Right? Can I go about my life in the way I was going about it before this conflict started? If the oil flows and there are still Israelis and Iranians and Lebanese and people all around the Middle East dying, nobody gives a flying [ __ ] But if the oil is not flowing, we got a problem. And so that's why only chart that I look at, you know, for the Iran war is what is the spread between those two contracts. If back end oil prices start ratcheting higher, we know that, you know, oil is not going through the
[03:05] strait and whatever toll or however you got to pay the the Iranian generals to get your oil through the strait, if you can do it and the back end oil prices stay contained, we're okay. If that's not happening, then we got a bigger problem. And so that's how I, you know, frame the Iran war. This ceasefire, maybe it works, maybe it doesn't, but if the IRGC, if the generals say for whatever reason it's working enough for them to keep the oil flowing through the strait, and it's working enough for the Trump administration to not essentially destroy a country of 90 million people
[03:36] with nuclear weapons or whatever the [ __ ] they're go they're going to do and deal with the pushback from other nations who are like that's kind of [ __ ] up what you did, then the death and the destruction might continue in the Middle East and it doesn't [ __ ] matter. Um so I think that's how I sort of look at this Iran situation. I look at the oil chart um look at that spread. Do you put any weight on the fact that people say, "Hey, the strait's closed." But then it looks like the transponders are being shut off. You have the price like you just look at price is actually the truth-teller and all of the narrative
[04:06] and and what's actually closed and what's not and this is a tronie analyst that's there at the strait taking a picture and like like all this craziness that goes on which is frankly like super entertaining, right? If you're just like a It's interesting to hear this stuff. But is it just like the price ultimately is the truth-teller whether the strait is open or not? It's the price that ultimately cuz everything else is propaganda or it's anecdotal or we we can't verify. I mean, I read this a trendy piece. I'm a subscriber. I thought it was an excellent piece and again, everything is nuanced. There is no black, there is no white, there is no open and there is no closed. It depends, right? And so it
[04:37] depends is a very difficult thing to handicap as an investor. So we always look for an objective measure that you know, puts a price on it depends. And that's the spread between you know, front month and back month oil contracts. If you know, if oil is flowing, yeah, the you know, the the news and the rhetoric can pop up oil up and down depending on you know, what side of the bed Trump wakes up on and what sort of trolling video the IRGC releases. And that that price goes up and down, right? But is there actual oil going through this? Can I have Can I sign a
[05:08] contract with a VLCC and I get my oil in however many and in months time I get my jet fuel or get my fertilizer or whatever it is, right? And if that is continuing to happen and maybe you got to pay a few million dollars to the Iranians and whether that's in Bitcoin or in the yuan or dollars or whatever have it, fine. I can survive. There's a bit more inflation, shit's a bit more expensive, but the world goes on. Before with this whole thing kicked off, my view of the world was there's these deflationary forces. You had deportations, you had tariffs, you had AI and robotics that were swallowing the
[05:39] US economy. You started to see some prices start to come down at least in the the metrics. And I think that people started to price in the fact that maybe deflation is a bigger risk than inflation. All of a sudden oil spikes like this. Now people start freaking out. They immediately jump to like we're you know, sky high inflation's coming back. We're going to get the COVID numbers all over again. How do you think about the battle between inflation and deflation and do you care what what the actual answer is? Inflation is what you want. Deflation Sorry. Deflation is what you want. Inflation is
[06:09] what you need, right? Um Explain it. >> If we're I think the the AI thing that you're talking about, right? The displation of knowledge workers is accelerating. It's It's happening, right? There are companies firing people left, right, and center because it's way easier to run a team of agents to do particular knowledge work than to hire a human. And that's only going to intensify and accelerate. And that's causing deflation in what we want. Oh, you want that nice new whatever the [ __ ] you saw on social media thing, the bag, the car, you know, the house and
[06:40] some McMansion whatever. You don't actually need that. You You want it. And now you are on unemployment insurance because you lost your $250,000 a year tech job. And it ain't coming back. And at least in the same format and the same time frame you need to afford to spend like you were spending. So those things that we want that the social media influencers tell me tell us that we need, that shit's deflationary. And the credit that's, you know, behind that, that's a problem for the banking system. And that that problem's only going to intensify. But what clouds the picture of what people are look thinking
[07:10] about central bankers is, well, then there's this inflation in what we need. The entire world economy is essentially a derivative of energy. And so if we need energy to flow through the straight, whether that's calorific in the terms of fertilizer to make food or it's just raw hydrocarbons, LNG, oil, that's what we need. And if we And if there's inflation in that, then that causes inflation in the entire economy. And so then you're sitting here as a central banker, well, do I cut rates? Do I raise rates? You know, what do what do I do, right? And so you're sitting and you have you have both in different pockets of the economy.
[07:41] What about Kevin Warsh when he comes into uh the Fed? Do you think that he is going to do one thing or the other or do you feel like he's a pretty rational person that's just going to look at the data? I know there's a lot of I don't even read a lot of this stuff like you have geopolitical analysts and the macro people who, you know, dissect the different speeches of the Fed especially the Fed governors and It's like a show for men. Yeah, exactly. And I'm like it doesn't [ __ ] matter, right? At the end of the day the Federal Reserve is an arm of the US government and they're going to do whatever the US government needs to have done so that the US government can
[08:12] afford to pay its bills. And so to me that means, you know, if there's a deflationary ticking time bomb that is AI and they need to print a bunch of money to save the banking system, they're going to print a bunch of money to save the banking system. And then they'll trot out a bunch of Ivy League economists to make up some [ __ ] as to why they needed to do what they were going to do anyways. If, you know, Trump decides that he's going to send Iran to the Stone Age and initiate, you know, World War for real and they need to print, you know, what do you say one and a half trillion dollars for the new Department of War
[08:42] budget? Guess what the Fed's going to do? It's going to cut rates and print money to make sure that the Trump administration can afford what they want to do. Kevin Warsh is irrelevant. Who cares who he is? Doesn't [ __ ] matter. Doesn't matter who sits in that seat. They'll do what they need to do as they've always done what they need to have done to make sure the government can afford their bills. Now, it might not happen in the time frame you need as a leveraged investor, but over a long enough period of time the Fed always prints the money and accommodates the government in the ways in which it needs it to happen. Let's talk about gold. Obviously that had a fantastic run. It seemed like a
[09:12] lot of central banks were buying up gold. But now we see Iran is supposedly going to charge this tax in the street. They're not asking for gold, they're asking for Bitcoin. And so it does seem like there are multiple use cases for a non-sovereign kind of neutral asset, but depending on if you are using it for defensive purposes or you're using it for payments, it seems like gold and Bitcoin now are being interchanged, but this like non-sovereign asset use case is pretty front and center over the last 18 months or so, would you agree? Absolutely, and I think there's an
[09:42] interesting and I think Luke Grommen points this out quite clearly. The for the last four or five months, the number one export from the United States has been non-monetary gold. So, this whole shebang about reindustrialization and more manufacturing jobs and the US is going to build back its exporting heft because of these tariffs and whatnot is not born out in the data. The data is that the US is exporting gold specifically to Switzerland, it's refined in Switzerland, then it goes to China. And so, what that tells me is
[10:13] there's essentially a a new quiet building of a gold standard. You need stuff from China. You don't have a trade surplus with China because most nations do not. How do you get the How do you get the yuan to buy the stuff from China? Well, they say, "Well, we'll take gold." So, you go get gold and, you know, from the US or from the West. You bring it to China, you still have the yuan, and then you buy the goods that you need to buy, right? And so, we're starting to see gold as this sovereign layer that's lubricating trade, but it's not like, "Hey, we're on
[10:43] a gold standard, no more dollar um used anymore." It's happening slowly, quietly, beneath the surface. Whether or not the IRGC is actually charging Bitcoin or they just wanted to troll the Western financial system, who knows. Let's see an actual somebody post, "Yeah, I got one chip through, and here is a Bitcoin transaction where I paid the Iranian government." I want to see that before I believe that the IRGC is taking Bitcoin other than just saying, "Fuck you" to the dollar system by putting this in the Financial Times. Do you read it all into uh stocks, gold,
[11:16] bonds, everything sold off since the war started, and Bitcoin was kind of flat to up? Well, Bitcoin's down what, 50% from the all-time high? So, it's nice that it outperformed from the 28th of February to the present, but I don't think that's a lot that's a lot of comfort for most Bitcoiners who are like, "Okay, cool, you're up 4% or whatever." Oil is up what? 80%? So, yeah. It'd be nice if Bitcoin kept pace with the price of hydrocarbons. It did not. However, in the good in the good books, it outperformed all the other major asset
[11:46] classes relative to the price of oil. And what is your thought process as to why Bitcoin did not outperform gold or stocks etc. over the last couple years? I think I'm I believe in this sort of AI deflationary thing and that Bitcoin is sort of a liquidity smoke alarm and telling us there's a problem. There's not enough money being printed given the, you know, potential deflationary credit deflationary effects of AI or hyperscalers just hoovering up all
[12:16] available capital to to build out data centers. There's so many other war, all these sort of things that are taking in capital and global central banks are not providing enough broad money or banks are not creating enough loans to juice the system and therefore Bitcoin, which is the most credit sensitive asset out there, has fallen. What's interesting is the first time I heard anyone talk about this was Elon Musk and he basically presented the idea in terms of look, AI is so deflationary that the people are going to beg the government to print more money. And coming from more of a Bitcoiner sound money perspective, you're like, that's
[12:47] insane. Why would we ever do that? Like obviously money printing is bad. But as I thought about it more, I'm like, well, well, maybe one of the big reasons why Bitcoin sold off so hard starting in Q3 last year is because Bitcoin, as you say, is like the smoke alarm and it just realized that everyone was expecting inflation from the tariffs. We didn't get that and actually we were going to have this like deflationary period. And so then that begs the question like, do does Bitcoin not go back up until the deflationary pressures go away? I don't I think so. I even if whatever
[13:18] happens in the Iran situation, I think if if you ended the war today and we went back to February 26th and and 27th, does Bitcoin go to 100,000 just because the war ended? I don't think so. I think we still have this AI issue. And this is a very, very big issue cuz you're basically saying what is the value of human labor, especially in a very flexible economy like the United States and and some parts of of Western Europe? You know, I've got anecdotal stories of friends who are firing half the company because they're like, "Well, what do I need these people for?" The the
[13:48] mediocre, the average, the 50th percentile and below engineer is not needed anymore. My rockstars tend to turn 100x more productive using an orchestrated team of properly, you know, prompted agents. So, you know, it's really sad that these very well-paid and very smart people are no longer have a job, but I as a business can't move forward with all this dead weight when I literally have increased my output so much and it costs me, you know, $1,000 a day or whatever it is that you're spending on on tokens on on a cloud instance.
[14:20] What is your current ownership of Bitcoin in terms of like portfolio percentage? Are you have Bitcoin exposure? Do you do you sell all your Bitcoin? What like what what how are you dealing with this? I mean, I I think probably 90 or something percent of my net worth is is Bitcoin. And how do I deal with it? I don't do anything. >> you said 90. >> Yeah, 90. Yeah, yeah. 90. It goes up, it goes down. The number on the screen says however many dollars, you know, value. It doesn't matter. Like at the end of the day, thankfully I have my cost basis is very low and I've made
[14:51] money in other ways, but the question is do you want to have to deploy more fiat? Or do you want to sell some Bitcoin and buy some other altcoin asset that can go up faster? To me, you know, in the altcoin basket, obviously I've been banging the drum on Zcash and hyper liquid. So, it's a on a relative stance, like those are the two, you know, shitcoins that I'm the most the most bullish on. But if you ask me, would you take a unit of fiat today and put it into Bitcoin? I would say no, because I still believe that we're
[15:21] waiting for that big print event. When does you know, the Fed and other central banks realize that if they're going to say AI is this transformatory transformational force, well, that means the banking system necessarily has to go bankrupt because these workers can't service these debts. And so you can't have both. You can't have it both ways. Right now the Fed says, "Oh, AI is this productivity miracle. It's going to elevate productivity. It's going to make the economy so much more productive." Well, today all that's meant is a bunch of people who made a lot of money have
[15:51] gotten fired. Yes, the company has gotten more productive, but those people, especially in an economy like the United States, which is 70% consumer spending, they have material impact on the ability for lots of companies to earn revenue and the banking system to make good on these assets that they hold on their balance sheet. So, I think right now the central bank is thinks the inflationary impact of the war, we can look through that. So, you know, that doesn't mean we necessarily need to raise rates, but AI is going to be so amazing. It's going to raise GDP so much
[16:21] that we don't actually need to cut rates because the system is is fine. And until we, you know, have some major event that changes that worldview, we're in the situation where there's not enough credit being created, and that's what the price of Bitcoin I think is telling us. Have you sold Bitcoin to buy other things or you just not deploying more dollars? And the reason I ask that is um I think that there's a lot of folks that I talk to that own a lot of Bitcoin or have held Bitcoin for a long time. Many of them are saying what you're saying, which is like I'm not deploying new dollars. I don't hear a lot of them
[16:52] saying they're selling their Bitcoin. It almost feels like it it would be blasphemy to them, you know, to to sell any and get liquidity. And so therefore, they're just kind of like, I got what I got. Let's see what happens here over the next 5 years or so, but any net new dollars that I earn or get back from investments, I'm deploying into other assets. Where where do you sit on that spectrum? So, wait. I get I've sold Bitcoin to buy Zcash and HyperLiquid. I'm not selling Bitcoin for for fiat. And yeah, if I have you know, additional fiat that comes into the portfolio, it's earning
[17:22] the T-Bill yield. That's it. Got it. And then what about outside of crypto? Do you have any assets there? Like how do you think about those assets compared to crypto as potential future returns? Yeah, so it's not crypto, it's gold. And so I have physical gold, I've got gold miners and that's pretty much my entire portfolio, right? So Crypto and gold. Crypto and gold, that's it. And whether gold is in physical form or in sort of like a gold miner situation. So that is it's just that simple at least for for Maelstrom.
[17:53] Yeah. Now when you start to look at the different technologies, we've seen a lot of the crypto companies go public. We've seen a lot of net new kind of challenger show up with various you know, things that they're trying to do everything from prediction markets to hyper liquid and everything in between. How do you look at the I'll call it the equity landscape even though they may not actually be equity investments. How do you look at those things and their ability to compete with the Coinbases and the Binances and and some of these bigger firms that just have so much reach and user base that they can just
[18:24] roll out these new products to. Well, I mean obviously if you want to talk about the the biggest challenger and I think an existential risk to the Coinbases and the Binances, it's hyper liquid. And this DEX model, right? What is hyper liquid proven and we've been trying to do this for a very long time since you know, myself and BitMEX invented the perpetual swap. Permissionless listing of perps. DYDX tried it out. They weren't really successful. There was GMX after that which was a darling for a while and now
[18:54] we have properly have you know, a very good team that's executed on this which is hyper liquid. And the reason why I love hyper liquid isn't because they're dominating sort of you know, the perp DEX landscape doing Bitcoin dollar and like Ethereum Solana or whatever trading. That's cool, it's great. Makes them a lot of money. Yesterday I pulled up the hype trading uh leaderboard in terms of um volume traded over the last 24 hours. The number two product is WTI WTI oil. Traded something like $3 billion yesterday on hyperliquid over the
[19:24] weekend. It's the only price discovery source for trad markets. This is what crypto was all about. We created a new way to trade. We gave you leverage. 24/7 Anyone in the world can trade this. And now all the politicians who try to [ __ ] us by doing stuff on Friday night when the market's closed, well, [ __ ] you. Here's some market um knowledge on what it is that's happening. Do you like it or do you not? It's going to influence your decision on on what you do. Now we have hyperliquid. Anyone can trade these assets 24/7. And it's
[19:56] found product market fit. This is why I believe so heavily on hyperliquid is because they're going to quickly take over price discovery in these assets because there's so many billions of people in the world who don't not have access to a Schwab account to buy, you know, a stock or trade an oil contract, right? They just can't do it. It's just not allowed. Not not offered to them. Now they've got hyperliquid. 10x 20x leverage. You give me some stablecoin or or Bitcoin or hype, I give you some leverage, and now you can trade an expressive view on this whenever you
[20:26] like. This is the game-changing thing. And, you know, Coinbase and Binance, these are very slower companies in in a crypto sense. And they're servicing a different market. They've got different pressures, and they're not going to be able to respond as quickly as you know, a team of 11 people who ship code as fast as hyperliquid. So, that's why I'm super bullish on that. And that I think this is the biggest challenge. How do you stay relevant as a centralized exchange to the retail people who pay your bills when you have this challenger
[20:57] who has created a permissionless product where anyone who can stake, I think 500,000 hype, can list any market that they want. And now Hyper is coming for the prediction markets with HIP-4, which should be coming out in a few weeks, well, they've just I think I don't know what Polymarket and Kalshi charge, something in the order of 2 to 7% fee, they went to I think 50 basis points, right? So, they're going to do you know, the China model, right? Oh, that's a great product you have there. How about I charge you almost zero for it and see what happens. And so, this is going to be interesting uh landscape, especially in the
[21:27] prediction markets, which I think are the other amazing thing about crypto. I I'll say it here, like I think insider trading should be legalized in every asset class. We want insider trading. We want the government official to go on Polymarket and buy the ceasefire 1 minute before they announce it on on television. Or, you know, Kim Jong-il is going to die because they're going to about to press the button and dead his ass uh with the missile, right? We want that because that is the market telling us what these guys and gals are doing in real time versus us having to wait for the New York Times to spit us some
[21:57] propaganda nonsense about what they did 5 hours before. So, this is why I love Polymarket and Kalshi and what they're bringing to the markets, and I love insider trading. Today's episode is brought to you by Uphold. Are you someone who's tired of juggling multiple apps just to trade, earn, stake, or spend your crypto? Then listen up, because Uphold does all of that in one single unified platform. You can access 300-plus crypto and fiat currencies with an interface that works for you, whether you're a beginner or an expert. Uphold also features any-to-any swaps, where
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[23:59] Public offers a proven track record of security and performance so that you can trade with confidence. Sign up today at archpublic.com and start your automated trading strategy for free. No catch, no hidden fees, just smarter trading. Your crypto, your exchange, your profits. Arch Public. Go to archpublic.com and tell them I sent you. So, the insider trading, what you're basically saying is like somebody has a piece of information, whether it is, uh, you know, actual material non-public information, it's just, "Hey, I I heard a rumor, whatever." Uh, they are
[24:30] financially incentivized to go and show it to the market. I think one of the questions becomes, "Okay, if they are doing that to, uh, their own personal financial, uh, benefit, are we just cool with that? Like, we just say, "Hey, look, that's worth the trade-off of, yes, they can profit off of it, but they're doing a almost like a public service to the market and they're giving this information, and so that trade is something that society should optimize for?" I think so. At the end of the day, what's the market? The market is supposed to take all available information and coalesce it into a price.
[25:00] And if we're saying that some information is okay to share at some point in time than other points of time, what's the point of the market? And yes, I know there's some ethical questions about government officials trading on this information, but me as a a human and as a trading professional, I want that information. And so we can deal with the ethics afterwards in terms of how you deal with government officials doing this. But like in most countries they already do it. Let's just make it all allowed so that we get better pricing. We see what's actually happening instead
[25:30] of like these, you know, these discontinuous jumps in a price of a particular event. Now we have a continuous stream of information coming from all the actors and they're putting it into the market because the best way to get your true opinion is from you have your money on the line. Yeah, it is it is uh interesting because also there's a lot of rumors and what I always wonder is everyone always points out when there's like a big spike in, you know, purchases on something and obviously that person makes money. How many times does somebody go and have a big spike and they end up being wrong? Yeah, it's the market. It's the market.
[26:00] I I just maybe there's zero. Maybe there's literally zero times that that happens. I doubt it, but I just never see those articles about like the person who thought they had information that went and made a bet and then ends up losing their money. So it's kind of like we're getting fed one side of the story. Um at the same time I, you know, pretty sympathetic to the story of like, "Hey, we have politicians." Like, you know, we just published a a report that shows Ro Khanna, he's outperformed the S&P by 112% since January of 2024. So like Nancy Pelosi, she is like in the
[26:30] rearview mirror. She's not even the best trader in Congress right now, right? Ro Khanna is crushing. And so you look at that and you say, you know, odds that somebody is outperforming hedge funds to that degree, probably pretty low without, you know, sitting on committees, getting information, etc. But maybe to your point, it seems like the United States government is not illegal. Like the US government has dictated so far that they are okay doing that. And so we do get in this weird world of like where should the rules be drawn? Yeah, I think just let every let everyone do it. Just let's have information. Markets are all about
[27:01] processing information. Let's have as much information and let the market decide what the price of that information is. >> What about like assassination markets and you know, things that can be manipulated, you know, mention markets or those types of things that are less about like economic data or world events and they're much more, you know, frankly like just like flimsy markets that people are like [ __ ] and speculating in? Again, I'm a I'm a free markets acolyte. Let it all happen, right? It's going to happen anyways. People are getting assassinated, people are getting murdered. Let's just put a price on it,
[27:31] right? Don't we want to know if the assassination risk on some particular leader is going up? Then maybe that alerts the authorities. Well, what's going on? Is there something that we need to be looking into? These markets also have a, you know, could have could be used for good other than just like the the nasty thing of somebody's going to put a hit out on has a market, does the hit and and makes money on both ends, right? But at the end of the day, we want more information. That's what markets are bringing us is the information of the crowd coalesced into a price. Talk about
[28:01] um Trump and his promised for Bitcoin, crypto, stablecoins, tokenization, all this stuff. He kind of came in, I think he was the first Bitcoin president, first crypto president. I think a lot of people in the industry, myself, many others were like, "Hey, it's going to be awesome to have like a Bitcoin, you know, a sympathizer in the White House. There's going to be the strategic Bitcoin reserve. There's going to be all this regulation." Bitcoin's basically right where it was when he first won in November of 2024. Success, failure, doesn't matter.
[28:32] I I'm on the people always like, "Oh, we need the institutional investors and this and that and that's why we need these these bills." And I'm like, "Who cares? This is a retail driven movement. The reason why we're here, the reason why this is valuable is because it does something for people who otherwise don't have anyone doing anything for them. You know, the retail person. We want to create it another financial system outside of the traditional banking system. We've done that. I mean, it's still an experiment at the end of the day. This is why it's viable. If what you're saying is we're just going to, you know,
[29:02] put in a bunch of rules, whatever those rules are, because we really want the BlackRocks and these big funds and these big banks, we're diluting the value of what is valuable. Like, Goldman doesn't care about Bitcoin because Millennium buys Bitcoin. They care about it because there's 6 billion people in the world with 8 billion people in the world who otherwise had no financial access, who now have this thing and they're trading it. And they want to get in on the action and make their fees. That's why it's interesting to them. If this was just another TradFi asset, no
[29:32] banks would be interested in it because it doesn't make them any money. It's like, you know, in the exchange game, if all your exchange is is HFT1 trading against HFT2, they don't want that. They want that organic retail flow to make money off of. If Bitcoin has no retail bent, Bitcoin is worthless. And I think that's what people don't understand, which is why I say [ __ ] all these bills, who cares? Just DK every single one of them. I hope Trump vetoes every single one of them. We don't need it. We didn't need it in 2009, we didn't need it in 2018,
[30:02] we certainly don't need it in 2026. What about the stablecoin yield? You got an opinion on that or you don't give a [ __ ] I mean, I hope that stablecoins are allowed to offer yield and compete with the banks, but I think people are really getting a crash course in politics, and I've been saying this since day one. Stablecoins are a you know, an extinction event for banks. Why? Because if I'm JP Morgan and I pay you 10 basis points on on your uh deposit when the when the Fed pays you 3 and 1/2% or whatever the the T-bill yield is,
[30:32] because I'm JP Morgan and I'm the biggest bank in America and you know, politically connected and what have you and government guaranteed, am I going to allow [ __ ] Jeremy Allaire to come in there uh and say, "Oh, yeah, I'm going to give you 3 and 1/2% and all you got to do is like tap tap tap on your phone and all of the sudden your money left JP Morgan and and went into the Coinbase custodian and now you're making 3 and 1/2%?" Of course he's not going to allow that to happen. And people are really now understanding how this politics works. There's a reason why these [ __ ] give hundreds of milli- billions of dollars to the political process over however
[31:03] many decades. It's to make sure that when a you know, a competitor like stablecoins with a yield, which is actually a great product for the end customer, [ __ ] with their bottom line, which is low-yielding accounts in a higher interest rate environment, they make sure that the politicians do what they're paid to do, which is DK these bills. So, I hope people can see what's happening here and understand how things actually work in politics in the real world versus what you hear on the campaign trail. How has your view on some of this stuff changed after your
[31:34] legal situation with the United States? Hasn't changed at all. I had the same opinion before, I have the same opinion afterwards. Yeah. Did you learn anything in that process? Uh confirmation of what I already knew. Now you feel it now you feel it viscerally. Like what what does that mean? Uh I mean, the banking system is very hostile to the what we are trying to build and myself and others have felt the hostility of those effects in the United States and all in all around the world. And so, I think you know, we thought this was going to be a cute and cuddly little game. This
[32:05] is a [ __ ] war. And unfortunately, people get hurt in war. You mentioned earlier uh Zcash and Hyperliquid. You you explained Hyperliquid. What's what's your thesis on Zcash? So, obviously everyone knows this is a Bitcoiner, it's a synonymous situation, right? People can see your addresses, they can see what's gone transpired. And there's good and there's bad things about that, but it's not you know, private cash. I don't think Bitcoin will ever get to that point where it's completely anonymous. I think this is how it is.
[32:35] Now, if you want to have complete anonymity, especially in an age of big tech, big government, and AI that can easily de-anonymize transactions and put a physical person to an address, then you want something like Zcash. Now, I particularly believe that Zcash is the best manifestation of this as, you know, zero knowledge proofs plus Bitcoin, but other people have other opinions. There's Monero, there's other uh different type of private privacy assets, but we're all trying to do the same thing, which is if you want complete privacy, and there's good and there's bad things
[33:05] about that, here is a protocol for you. Uh and I think we're going to that desire to have completely private digital money is going to increase over time as the ways in which, you know, it's easy to de-anonymize Bitcoin, you know, it doesn't it's not it's going to be so easy and so trivial that people go, "Well, I actually wanted that to be a private transaction for whatever reason." No judgement. Well, then here's Zcash for you. Use this instead, right? And so, that's why I think having both makes
[33:36] sense, and the price of Zcash is going to go up a lot to reflect this desire to have privacy over the internet. When you look at these privacy coins, is this something that really stays outside the system? We shouldn't expect to see, you know, the banks, the uh large financial institutions embracing this stuff, and it's not only the privacy in terms of the actual usage, but it is the thing that like doesn't get pulled into the system like we're seeing with maybe Bitcoin with the ETFs and and all this stuff. I don't think it's compatible with the
[34:06] system that they're trying to run. It's almost like cash is not compatible in this day to the bank, right? Cash made sense in the time in which it was better than, you know, having a bar of gold or some sort of physical commodity, right? Cash was invented for that particular purpose, um discounting bills and whatnot, and the banks were all about cash. But in this digital age, where, you know, the banks are under constant surveillance from the government for, you know, "Where did this money come from? Where's it going?" And all that. Oh, [ __ ] this. Why why do I have to deal with this this cash thing? I have to physically put it somewhere. I got to
[34:36] have this branch that's expensive. Got to hire these [ __ ] humans and you know, the security guards and all this. Like [ __ ] this. Let's just move to digital. You know, you hold it on my ledger. I let you send it back and forth, right? So, I don't think cash makes sense for banks anymore. It's just very expensive to use relative to the use case that it provides in a digital economy. But cash definitely makes sense for us as individuals. I love cash, right? I want to have a private means of of paying for things. And guess what? The government loves cash, too. When they want you know, when they want to do things off
[35:06] the book and pay that person they shouldn't be paying, they're [ __ ] using, you know, stacks of cash, right? And so, I think that the under the the average person in the government now has uh a desire to have a private means of money. The banks, they don't want privacy. This is not their business model. What are you bearish on in crypto? Like what do you what does everyone else excited about that you're like, "Ah, you guys are idiots." I pick the next L2, whatever the [ __ ] it's supposed to do. Like I'm bearish on that. I mean, I would say I was I was
[35:36] bearish on on Monad when it launched and I don't even look at the price since I was getting a little spat with Keone. I'm sure it's down 99% whatever the [ __ ] it is. Like there's just so many projects that we see especially at Maestream cuz we're on the venture side. They just have no clients. Have no product market fit. And literally it's just, you know, how did you game the pre-seed, the seed, raising this VC to that VC and you know, the whole game. And it worked for a while when it was novel and new.
[36:07] But after the last cycle, we've seen basically most of these tokens are down, you know, 90-something percent. And they could be very good projects, but the capital formation was flawed. We need to get back to basics. I love ICOs. I think that's great. However, yes, people lost a lot of money because the maturity of the projects was not there, but I think we're in a different stance. I think if people are better at assessing whether or not a team is able to ship something and whether that something is able to achieve product market fit, [ __ ] the VC model, let's go back to funding from the
[36:39] crowd. And I think we're going to get a better alignment of incentives, better capital formation, and better post-TGE token performance. I do think that um there's this balance between the crowdfunding idea versus execution, but the idea that your customers, your you know, community members, whatever, have an economic stake uh feels pretty important. And in a weird way, like the Trump accounts or Invest America accounts that they're they're talking about where they're going to give a thousand dollars to every baby, it's kind of the same thing. They'll say, "Hey, every citizen's going to get an economic stake in the system,
[37:10] and we think that's going to have all these great benefits." That's just a very, very generalized version of what an ICO was, right? Yeah, and I guess when you have a stake in the game, then you participate in particular ways, which is why governments always support housing. Cuz if you have a physical house in a particular nation-state, then you're going to essentially be much more conservative than you otherwise would have been. Perps seem to be all the rage, and it seems like Wall Street wants in on the game. I think a lot of people are talking about perps in crypto.
[37:40] Do you think it goes to other asset classes and we see it on Wall Street and you know, NYSE and Nasdaq and all this stuff? Or like how do you see this playing out? I think all those products will fail, and they're not going to fail because of a prop poor implementation. They'll fail because of um clearing. I think this is the thing that most people don't understand why this product works. When you invest in a perp in a crypto platform, you have a limited loss. You put in your investment margin or I don't know how much it is, 10%, 1%, what have
[38:10] you. That's all you can lose. The crypto exchange isn't coming after your entire financial uh net worth because we don't have the heft of the government, the legal system, and the banking system there to make good on bankrupt debts. We only can take what you have, which come to the exchange with. And that allows us to have the high leverage, and to have to have to have the high leverage, we have all these socialized loss mechanisms. Now, I know that Wall Street hates this because they don't want to invest in a product where you're making money and all of a sudden you're not. It's just not a great way to to trade, and I
[38:41] completely understand that, which is why you know, when these banks and these exchanges have pushed to put perps in the TradFi arena, they haven't really gone to the base root clearing is broken in a 24/7 internet way. We do it better in crypto. We all of the as the exchange owners have skin in the game, and if we don't have skin in the game, we've limited the payouts to make sure that we're all solvent. So, you know, in the statistical sense in crypto, we, you know, have these left tails, left and right tails, and they're
[39:13] properly capitalized, which means you don't get these ridiculous payouts. But in TradFi, the left and the right tails are undercapitalized. This is why these, you know, the Nassim Talebs of the world can make a lot of money because you can predict the crisis, and you know that the bank on the other side, even if they can't make good with their own balance sheet, is going to get a bailout from the Fed, just like AIG was bailed out to pay Goldman Sachs, right? And so, that's why these tails are undercapitalized in TradFi because of these clearing
[39:43] systems. And if we don't fix these fix these clearing systems, you cannot have a NYSE 100x leveraged perp on anything. It just doesn't make any sense. And the retail investor wants 100x leverage. They're not going to say, "Oh, it's NYSE, so I'm going to take the 3x leverage and close on the weekends versus the hyperliquid 100x leverage, open 24/7, tap tap tap on my phone, and now I'm trading." And so, that's why I think that the retail trader is not going to go to any of these TradFi products. It's just going to be the
[40:13] Virtus and the Citadels trading against each other, and they're not trading on, you know, on a traditional futures contract. Now they're trading against each other on a perp. And you know, great, good on them for making some sort of financial innovation, but for the retail trader who really matters in this equation, it doesn't [ __ ] matter and it's going to be irrelevant. How big can Hyperliquid get? Could it be bigger than Nasdaq and ICE? Absolutely. I mean, there's what? There's only what, 300 million, 40 million Americans? There's 7. whatever billion other people in the world who want to trade the same stuff,
[40:45] too. And they've been barred from trading this stuff, you know, up until now. And so, I think the sky's the limit for Hyperliquid or some other exchange that captures this sort of decentralized perp decks market. And this is the dream, right? Put up any market you want as long as you put up enough hype to put skin in the game to make sure you're an honest operator, do whatever you want. This is what crypto is all about. And so, I think that the sky's the the limit for Hyperliquid and which is why I'm so bullish on a team finally being able to execute on this
[41:15] vision. Because again, the vision is not new. People have tried this vision before, because I'm not executing as well as Hyperliquid. How do you play it? So, if somebody hears this, they're saying, "I don't know anything about this." What, you just go buy the hype token? You go and you buy something on the market? What Explain how you're thinking about, "Okay, you've got this thesis. How do you profit from it?" Yeah, it's like wouldn't you love to own a piece of the New York Stock Exchange? Of course, you would. And then you can go on and you can get a dividend, you can participate, right? It's same way, right? Wouldn't you love to own a piece of what could become the largest
[41:45] exchange in human history? Great, go buy this token called hype. Guess what? 97% of all fees generated from users is used to buy back the hype token. So, the more people that trade on hype, the more fees generated, the more they buy back the token and it becomes deflationary. So, that's the story. It's just as simple as that, right? This is the modern-day exchange. I would have loved to buy the New York Stock Exchange right after, you know, the Black Monday in 1929. What a great investment. Wouldn't you love to own the CME when electronic trading started in the mid-90s? Absolutely great
[42:17] investment. Well, wouldn't you love to own the exchange that's going to power 8 billion people joining the financial world of trading? Yeah, that's hyperliquid. Prediction markets are also coming to Wall Street. We've seen nice you make some big bets there. Um, do you think that the prediction markets can be as successful on Wall Street as they are off? Absol- I mean, as in like nice you launching a prediction market? Yeah, like one of the things >> I've been surprised by with the prediction markets is like sports gambling obviously has gotten a bunch of, you know, fanfare etc. and then no shock there. Um, but I would have
[42:47] thought that hey, I want to buy uh Tesla stock today because I think they're going to be on deliveries, but rather than make the bet on the stock, if I could just isolate that economic data point and I can just bet on is Tesla going to beat on deliveries or not? Like as an investor, that's way less risky. It's like I'm just underwriting this one thing. I'm not also thinking about what's going to happen with revenue and EPS and is Elon going to say something on the, you know, press conference and and this whole thing. And so I would have thought that there'd be a lot more adoption in the like trad- tradfi world. It doesn't seem like that's really
[43:17] happened yet, but maybe it's because the venue is not a place that they're used to trading on and so if nice you launches this stuff, then maybe that would change. Maybe. I mean, I think if if nice you going to launch binary options like okay, you can trade a 5-minute binary right before results on Tesla, that's going to be game buster's product. In the same way that zero day options are a game buster's product in the CBOE. It It just comes down to what of the exchange owners going to launch and do they understand their their base customer and what they actually want, right? If they can follow on the advice of what is the
[43:48] zero day option market has proved, which is the degenerate gambling of the American investor, and they launch, you know, five, one minute, whatever on all these stocks, [ __ ] yeah, let's go. Like that's going to be an amazing product, right? And I think it's going to be very hard for a poly market of Caltech to compete with the distribution um lock in that someone like the NYSE has with the banks and the brokers, right? They're all in on this together and they all want to make money. Do they really want to make money big enough? That's all the question. I don't know. I don't know. >> I've never told you this before, but because I feel like you're the perfect person, I'm not going to go do this. If
[44:19] somebody does it, I just want to be able to invest. Um I uh years ago almost did something with Barstool Sports at the time. And one of the things we were talking about was inventing a new sport. And the idea that we had was to do like a 30-minute heads-up one-on-one trading into the close. So like you have you have you know, you versus me. We each have like I don't know, 100 grand. Anything goes, any amount of leverage, any asset, anything. At the close, whoever's got more money wins that round. And you just play this
[44:49] game and it's like 30 minutes jam-packed, you know, you may say, you know, almost like in Jeopardy or whatever. You're like, well, screw it. I got to put it all on you know, I got to put it all on red here because I'm going to lose. And so you just get this like action-packed into the close type action. The problem is that they don't have products like a 5-minute binary, you know, type type asset. And so if you introduce that type of stuff, I do think that trading has already become entertainment and sport, but I do think also people are going to start to try to, you know, how do you productize this into a true sport, things that they can
[45:20] monetize, teams, merch, you know, all that kind of stuff. And maybe it's just the products are missing for them to be able to do it well. Yeah, I mean, we already pseudo have this, right? You have all these TV and social media personalities that are like investors, right? And they may or may not make money like a Jim Cramer. Remember that doesn't matter. He's not there to tell you to make money. He's there to entertain you while you watch the markets. And this is just a natural extension of that. And I think that's that's a great idea. They already see it in South Korea. I think there was during the KBW last year, there was some bar in
[45:50] Seoul and they had two screens up and there were two traders on some sort of perfect change and they were just like trading and seeing who could make the most money. And live streaming live streaming themselves. So So this is absolutely going to happen. Yeah. I I I've always just thought it's interesting because you got this whole trader world and a lot of those people they don't give a [ __ ] about sports, they don't care about all this other you know, they just like hey I just want to do trading and one of the problems had historically been okay, well what am I going to trade? How much volatility is there really on these stocks? You've got all the circuit breakers, whatever, but you start doing it maybe it's not in the close, maybe it's in crypto, you know,
[46:21] you could really start to get, you know, pretty interesting. Um and then of course, you know, you want to own the league, you want to own the teams, you want to be the like the the LP, right? Yeah, you kind of live I don't know if you want to be the LP, but you might want to own the team. You want to be like the live golf of trading, right? You just kind of own the whole thing. Yeah, maybe actually the LP is not what you want to do depending on the on the quality of the trader. Um all right, what what what are you guys doing with this private equity fund? To explain kind of what the the
[46:51] general thesis there is. I mean I think it's only only gotten more compelling as the prices of things have come down, right? There are lots of great crypto companies that are not on exchanges that have critical infrastructure, great cash flows, great teams that are under appreciated in these markets. And you know, after these guys and gals have grinded for 5 10 years, they want out, right? And so we're saying let's put together a pool of capital, go to these founders and say hey, we don't want you to work under golden handcuffs for another two or three years like they would if they took a bid took a price
[47:22] from like a large strategic like Coinbase or Binance. We'll take you out, you know, through our network we're able to put in great operators, and we're going to operate this company over for a while, change it a bit, and flip it to another sponsor when the market recovers. And so no, we're still gung-ho on this on this this vision. Some of the companies that we've talked to in the past, the pricing has gotten a lot more reasonable reasonable recently. And so I think this is the perfect time to be deploying capital, especially on a, you know, full
[47:52] buyout equity stake because again, there are lots of very profitable crypto company. Yeah, I'm not talking billion dollar, I'm talking 50, 100 million dollar revenue companies with, you know, 75% EBITDA margins that the founder wants a break. And, you know, we want to be able to raise the capital to go in there and get and give that to them. That uh that makes sense to me. Um where do you want me to send people? Where where where uh you want to follow you on the internet, maybe crack some memes, a couple frogs here and there? Yeah, so I'm on I'm on X, formerly
[48:22] Twitter, at @CryptoHaze uh and Substack @CryptoHaze where I publish my essays. You know, my favorite thing is when I see you just tweet some Yatsy. I'm like, "Oh, here we go." Me and like, you know, you're you're doom scrolling, you got to stop. Hey, what what's the Yatsy of the day? I mean, look, I I if I had to sum up your uh your current market view, is they're going to keep printing money over time, Bitcoin, gold, hyper liquid, Zcash, those are the things you like,
[48:52] and then there is a bunch of like crypto equities in the private market that you think uh have opportunities that aren't being capitalized. And so, if you can go and buy those at reasonable prices, you guys are willing to put in kind of the sweat equity to uh to turn them around as well. Yeah, absolutely. It's just that simple. Yeah. Well, I maybe the most surprising part of this conversation is uh you don't seem to have anything outside of US Treasuries in the traditional market, at least in size. And so, you you're still very much concentrated in uh in kind of hardcore crypto world.
[49:22] Yeah, I'm not a I'm not an AI guy. I can't hunt those stocks. It's like, at the end of the day, there's lots of fun to be had in traditional markets and lots of very volatile stories to play. I just prefer to hit tennis balls, ski, drink wine. They don't want to look at my screens. So, I do things that I know, and I don't have to be very engaged to do them. Yeah, we all read the the profiles of you, you know, sitting on your little [ __ ] couch and everything. We saw. Yeah. All right, thanks for doing it. We'll do it again soon. Boom, thanks.