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On the Margin hosts argue that macro factors (liquidity cycles, fiscal dominance, interest rates, dollar strength) now drive crypto price movements more than on-chain dynamics, and that structural political partisanship around crypto regulation creates asymmetric risk favoring Republican control, while traditional forward guidance and monetary policy tools are masking fiscal insolvency.
- Bitcoin and crypto now trade with macro assets based on liquidity and interest rates rather than 4-year halving cycles
- Fed forward guidance obscures fiscal reality rather than providing transparency, creating misaligned incentives
- Crypto regulation has become entirely partisan, with Democrats blocking pro-crypto measures while Republicans embrace it, creating political optionality
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Debt jubilees and mass forgiveness are not new phenomena and have occurred repeatedly throughout history, including in Rome, suggesting they are a cyclical response to unsustainable debt levels
“we read these these old you know monetary history books and they talk about debt jubilees they talk about it happening even you know during the during the Roman Empire and you're like how could we just collectively as a society decide to just forgive a bunch of debt be like all right you know let's pop some bottles of wine and just you know start from scratch again”
This pattern of government spending without explicit tradeoffs has existed across all monetary systems and regimes (gold standard, fiat, etc.) and is a fundamental feature of political incentives rather than a specific monetary problem
“this exact situation that you're describing has existed across tons of different societies and different monetary standards and like you can go back to all of these like the Coliseum in Rome and uh you know the circus Maximus and all this [ __ ] that was just politicians bribing people for elections like the reason we have all these cool monuments was people just bribing everyone for elections”
The critical distinction is whether debt forgiveness is funded through tax revenue (which anchors moral hazard through skin-in-the-game) or through money printing (which eliminates accountability and incentivizes further misallocation of capital)
“it anchors you know skin in the game and and moral hazard to actual like Capital allocation because if we just print money and then just hand it out in these different means there's there's no real I responsibility versus if you're doing it through you know basically tax revenue have something that you can anchor it towards it keeps those moral hazards in check more so”
US 10-year real yields (nominal minus inflation) at 210 basis points are highly correlated with USD strength, so as real yields fall, the dollar should fall, and money should flow into European markets
“check this out this is the US 10year real yield so nominal yields minus the rate of inflation is what you get real yields so that's 210 as that falls you know the USD Falls with it it's like very very good correlated very very really correlated”
The core issue with debt issuance and money printing is that it eliminates the need for tradeoffs and real resource allocation decisions, allowing governments to avoid difficult choices
“so Felix the point Point you're so I think you're getting at a really interesting point which is what we're doing with money Printing and just issuing debt to fund everything it offcat the need to make a tradeoff right yeah of course we'd like to just print a bunch of money and give it to everyone and forgive everyone's debts and let people go on vacation twice a year but the there is a real cost to that which is everyone getting essentially diluted their their cash word getting diluted right”
Forward guidance originated with Alan Greenspan as a tool for influencing markets, though some credit Ben Bernanke with formalizing it, and can be viewed either as market manipulation or as transparency improvement
“I I know in that Stanley dren Miller interview he credited Ben banki with that but that goes all the way back to I mean I always thought of Alan Greenspan as the original architect of forward guidance and the first guy to use that really effectively as a tool to impact markets”
The Federal Reserve's primary powerful tool today is forward guidance and jawboning, not rate adjustments, as evidenced by the strong economy persisting despite fed funds rate above 5% due to loose conditions on the long end (10-year and beyond)
“you know their most powerful tool is Ford guidance you know like as we see for fed funds rate is over 5% and economy is still doing great and a lot of the reason is because you know the the economy is so loose when you look at it through the lens of the long end bond yields of of you know 10 years and higher that's just allowing the economy to keep going so you know their biggest tool these days is is Jobing and and forward guidance”
The Fed is more transparent than many crypto governance systems because the Fed explicitly explains its viewpoint, takes questions, publishes minutes, while crypto systems like Ethereum have vague governance processes where it's unclear who decides on issuance policy
“I think pretty objectively you could say that the FED has gotten more transparent and the the IMF does these rankings of uh different central banks in terms of their transparency and you know I know we all C the FED super opaque in a black box and everyone scrutinizes every wrinkle on Jerome Powell's forehead but at least you know they actually do minutes and the guy gets up there and explicitly explains his Viewpoint and takes questions from reporters”
The Fed's forward guidance persists because it's a tool for obfuscating an increasingly bleak fiscal reality: as the deficit widens the truth becomes more difficult to communicate, so forward guidance provides a mechanism to add a 'fog' dimension that obscures the gap between data and Fed intentions
“I think the reason for that forward guidance remaining put is it's like when someone starts going down the road of telling a lie and then the LIE snowballs and then you know you don't even know what's the truth and what's not when you get in such a sticky situation and you can't just explicitly say what's going on you have to op oisc it as much as possible and the forward guidance helps them do that”
The FTX crash occurred because the Fed turned hawkish and slowed credit creation, which cascaded into revealing cracks in the system and snowballing crypto downturns, demonstrating the primacy of macro over crypto-specific factors
“you could say this P Cycle we crashed because FDX got obliterated but the reason those cracks started to show is because the FED started to turn hawkish and basically slowed down credit creation and once that happened the snowball started to go the other direction”
Token unlock schedules create supply-driven selling pressure and contribute to crypto cycle downturns as large allocations vest and get dumped
“and the supply schedule of those coin is extremely predatory and leads to people dumping along around like when unlocks happen and that's like really how every single crypto cycle has played out and and that that is not changed that is still the exact same”
The US has had exorbitant privilege that allowed it to run ~7% fiscal deficits during wartime/recessions without consequences, but most other countries running similar deficits without world reserve currency status would face immediate monetary/fiscal collapse
“I like the word choice there that's what I've been kind of using a lot is tradeoffs here and the US has had this exorbitant privilege of of not really having a trade-off because we've been able to run 7% wartime recession time fiscal deficits without issues if you know 75% of the world tried doing that that didn't have our economy or our world Reserve currency status uh it would been game over for for their monetary and fiscal situations”
Bernie Sanders and Democrats introduced legislation to forgive all medical debt in addition to student loan forgiveness, showing incremental progression toward broader debt cancellation
“we saw you know what Bernie Sanders and and that side of the party had introduced some legislation this past week but forgiving all medical debt yeah it's just in Little Steps I guess”
Crypto regulation has become explicitly partisan, with Republicans unambiguously pro-crypto and Democrats anti-crypto, with lines being drawn more clearly than ever before during this election cycle
“as we seen over the last week like the lines are being drawn right now between the pro crypto Republican party and the anti- crypto Democrats and it's it's become really like there's a saw a couple videos it seems like Trump had some sort of event the other day in Mar Lago where he basically put out his standpoint in crypto and it was as positive as it can get and that happened at the same time that the SEC has been putting out a lot of Wells notices against pretty much any you know sizable crypto corporation that exists in the US at the same time that they're talking about vetoing any sort of pro crypto bill”
Estimated daily implied moves for major indices are under 1% per day for next month or two heading into summer, and combined with low summer trading volume and $1 trillion in buybacks, stock market may lack catalysts for meaningful moves.
“I think I think we got that one right it's true we're almost at the highs again um yeah and I just don't see heading into to like the summertime like if you look at the implied moves per day it's like under a percent every day for the next like month or two and then you head into you know the summertime where no one's trading the trading volume's down so you have a trillion dollars of BuyBacks”
University of Michigan survey showed a seven-sigma miss on consumer sentiment, driven by sticker shock on inflation and higher interest rates squeezing discretionary spending and income
“basically a seven Sigma Miss on the sentiment aspect of it which you know one of the main reasons that they had mentioned for the reason why it was Sol low is this two-tailed issue of you know sticker the inflation and with that higher interest rates that are starting to squeeze discretionary spending and income”
Boston College now costs $90,000 per year, double what it cost when Quinn attended, creating an all-in debt load of approximately $500k for students without family support and a 100k-400k starting salary range, producing extreme leverage on debt
“I was talking to a a undergrad at BC be Boston College is now $90,000 a year and which is just Insanity it's that's nuts you know doubled since I went there plus your real estate in Boston to in cost of living in Boston”
The Fed outsourced its corporate bond buying to BlackRock through a special purpose vehicle, which some viewed as potentially violating the Federal Reserve Act
“yeah they gave it to Black Rock didn't they the Larry buy some apple triaa we shouldn't laugh at that it's like kind of messed up”
During the 2020 financial crisis, the Fed opened a facility to directly buy corporate credit (not just treasuries), a major policy shift that may have permanently narrowed corporate credit spreads by creating tail risk that the Fed will bail out credit markets
“because one the last time we had a recession 2020 the FED started buying high yield bonds which is Japan move it's I was gonna ask about this yeah because yeah like I feel like we forgot about that fact that they started to buy actual corporate credit which is crazy to me”
Macro factors (liquidity, interest rates) now explain Bitcoin and crypto movements much better than on-chain halving cycles, suggesting crypto has matured to trade as a macro asset class
“macro actually matters like clearly what's moving at least Bitcoin and Bitcoin moves the rest of the market are macro factors these days like much more so than anything else and it makes sense now that Bitcoin is starting to trade more along the lines of what drives asset prices globally which is liquidity and interest rates than anything else and these fouryear Cycles it never really made much sense why we had the fouryear cycles and not that this is going to be a super cycle but we're deviating from the previous pattern”
Student loans feature extreme leverage (e.g., 60k salary against 400k debt) that would be impossible to obtain for any other purpose, creating a moral hazard where it's only student debt where governments allow this kind of leverage structure.
“if I was someone who paid off my student loans and you'd be pissed I so ludicrously pissed that's the second time I've used the word ludicrous but like would I would be absolutely livid and it just it you're incentivized not to play by the rules at this point which is you know breakdown of the social contract”
There is tension between short-term and long-term performance: some founders like Sergey and Larry (Google) made massive long-term investments (laying submarine cables) that would be punished in public markets but created structural competitive advantages 20 years later
“there definitely is especially for entrepreneurs that tend to be more Empire Builders they're not very concerned with things like creating shareholder value and view that as an obstacle and I've got this great idea and I should just be able to do this without showing results for a period of time and there have been a number of radically innovation focused entrepreneurs that have burn through money doing that on the other hand there are tons of examples of Founders like um like Larry and Sergey in the early days of Google laying that you know Atlantic floor cable”
2015-2017 had less liquid on/off ramps for crypto, making it harder for retail to enter, so that era represented the last true organic retail-driven bull market before institutional involvement and infrastructure changes altered cycle dynamics
“2017 was probably the last you know that was when it was actually like kind of hard to on and off ramp funds into the ecosystem still and so that was probably one of the last eras of where was less intertwin”
Political parties form around coalitions of single-issue voters, with apparently unrelated positions lumped together, so crypto's partisan placement is somewhat arbitrary and could have gone either way depending on coalition dynamics
“politics makes for weird bed fellows or odd bed fellows you can kind you can kind of see how this happen like why if you look at the general philosophy behind even republicanism why are small taxes and anti-abortion and small like why are all these unrelated issues lumped together just think about how these parties form it's like imagine just two guys like one guy really cares about the small taxes thing and also gun rights and one other guy really cares about the small taxes thing and is also anti-abortion and they're like all right what we really care about is the small taxes like I don't really love the gun stuff and like I don't really love the abortion stuff but I care about the small taxes thing so [ __ ] it let's just all lump it in here”
Bank of Canada simply copies Federal Reserve policy rather than independently setting policy, showing that global central banks are subordinate to Fed decision-making
“I mean our our Bank of Canada just going to copy the Federal Reserve like they're so desperate to car right now and are just waiting for the feds so just follow what's going on”
You can marry macro and micro cycle perspectives by noting that micro-level cycles (token unlocks, speculation, venture cycles) operate within the macro-determined environment, so both frameworks are true at different levels of analysis
“I think you can you can kind of marry a line between the micro and the macro there for sure”
Obama's joking description of killing Osama bin Laden ('we shot him in the head...beautiful, like a dog') is an example of comedians/politicians effectively using dark humor to make serious topics culturally palatable
“or what if about you ever seen a stand up with uh who's the the best guy on this standup he did yeah he died like a dog when you watch Obama speak about like killing M Laden versus him getting the the Isis guy yeah that that one's incredible he died like we shot him in the head yeah beautiful dogs”
The tradeoff from running sustained deficits will eventually come when excess reserve facilities run out (RRP at couple hundred billion, TGA at ~$1 trillion) and direct market financing becomes necessary, likely next year when these reserve facilities deplete
“I think that still still is a ways out but probably happens next year where you know right now you can just say free money for everybody you know forgive debt here forgive debt there but there's going to be a trade-off at some point when these you know excess Reserve facilities run out and you have to finance directly in the market”
Peter Thiel and others argue enlightenment was actually a retrenchment because it eliminated religious/transcendent thinking, replacing it with pure economics, and now people are reverting to religious thinking as reaction to economic nihilism.
“I thought at first you were talking about Tyler Cowan had a a podcast with Peter TI recently they talked some some similar uh parts of this but that that political uh basically Theory and if you take modernity there's a problem with modernity where everyone forgot to ask the question what it means to be human and teal basically says the enlightenment actually was a retrenchment of you know the human thought because you didn't think about religion you didn't think about these things”
Retail has not returned to crypto this cycle despite multiple conferences, websites, podcasts, and other metrics that would show retail participation if it were returning, and all volume is driven by institutional segment
“retail has just not come back back to crypto period and we've talked about on the show before I mean we have the back like honest we've got multiple different you know we've got conferences we've got a website we've got multiple different podcasts we have all of these different metrics to take a look at like we would sort of know uh if if retail was coming back and they're just not and you saw it in coinbase earnings as well if you look at their um they break out their use their users on an Institutional versus a consumer basis you can see all the volume is is being driven by the institutional segment of their market”
TLT (20-year Treasury ETF) implied volatility is near lows at 14 with skew suggesting puts are expensive relative to calls, indicating investors are positioned excessively bearish on bond markets while actual volatility remains low
“so this is from Piper uh Piper derives guys who I think are the best on the street they said long dat uh TLT vs are back near um lows so it's a 14 implied V on this TLT is a 20-year treasury ETF so people are are betting on this bond market implosion it's just not happening in the bottom is uh the TLT skew so what you pay um for puts relative to calls people are betting on TLT going down so yields Rising on the on the derivative side”
There are $934 billion in publicly announced buybacks scheduled, representing a massive capital allocation away from productive investment
“there's going to be 934 billion in Buybacks in the market I think it's a balance and honestly I say this as a”
Average retail consumers are unaware that Bitcoin hit all-time highs and still view crypto through the lens of FTX fraud and SBF going to jail, perceiving crypto as a scam asset
“I think they're still thinking this is a this is a a scam asset that got marked to zero when the guy with the curly hair went to jail”
Large tech companies (particularly Meta and Nvidia) are engaged in an enormous capex cycle for AI GPU spending, with Meta potentially spending $100 billion over the next couple years and H100 ownership concentrated at Meta
“the posture and language that's coming out of Mark Zuckerberg at meta or some of the numbers that Sam Alman are throwing around there was a an interview that's worth watching from Mark Zuckerberg on the dwares podcast it's all about llama 3 which is this open- Source model that's it's extremely good um and it's also really easy to run on like a very small device type deal but he he just casually mentioned that they were going to they would be willing to spend no problem hundred billion over the course of the next couple years on this stuff”
High yield bond spreads are trading at sub 250-350 basis points, near 2007 levels, with record weekly issuance being absorbed by bond investors, indicating the Fed's forward guidance is successfully keeping corporate credit markets loose
“look at the credit Market it is fine so it's working so this is high yield bonds trading sub 250 basis points and 350 basis points which the spreads of high yield bonds the lower they go the more you know people are willing to pay up for for high yield bonds it's it's almost at 2007 levels so like in this past week you had like a record weekly issuance in the high yield market and it was gobbled up by by Bond investors”
Atlanta Fed GDPNow model projects above 4% GDP growth, with recent strength coming from private investment rather than government spending, and government spending has trended down quarter-over-quarter
“the Atlanta fed came out with their projected uh GDP print and it's like I think it was above 4% again and a lot of the change there was in um private investment over government spending which is actually been trending down like government spending has been trending down quarter over quarter recently”
FTX bankruptcy is achieving 107% recovery rate for creditors because assets appreciated 200-500% from bankruptcy snapshot to current prices, but creditors don't feel whole because they had losses in the interim
“FTX they're getting back 107 cents on the dollar for you know everyone's been paid out on that side and granted well at 16k Bitcoin yeah yeah but that's the funny thing is it's it's it's not as bearish as that sentiment would seem which is probably a good thing that's one of those situations where I actually think they did the right thing”
DraftKings stock moved from $10 in early 2023 to $40 by the time of this discussion, a 4x return, driven both by sports betting expansion into new states and genuine demand growth
“DraftKings is from the beginning of 2023 it was at 10 bucks it's now at 40 bucks 4X”
Student loan interest rates are expected to rise to 6.5% in July from 5.5% currently, while total student loan debt is approximately $1+ trillion, exacerbating the fiscal problem for Biden administration
“the student loan interest rate expenses are expected to rise to 6.5% in July up from 5.5% currently so not only do you have like you know trillions of dollars of debt and student loans I think it's maybe one point some trillion”
Ryan Selus of Messari has argued crypto has no future in US if Democrats control House for next 4 years, representing a relatively mainstream crypto perspective on political risk.
“I think it's you know there are guys like Ryan suus for a while who's the founder at misari has been saying that there's there's not a future uh for crypto in the US if Democrats take the house for the next four years”
SEC has been issuing Wells notices against virtually all sizable US crypto corporations while Biden administration vetoes pro-crypto legislation, signaling coordinated regulatory hostility toward crypto.
“the SEC has been putting out a lot of Wells notices against pretty much any you know sizable crypto corporation that exists in the US at the same time that they're talking about vetoing any sort of pro crypto bill”
Stan Druckenmiller criticized the Federal Reserve's forward guidance as harmful, arguing the Fed should simply hike when it needs to hike and cut when it needs to cut without telegraphing intentions, and that Fed chairs should not become public personalities
“Stan Dr Miller's interview this week on CNBC but he had talked he he kind of went on a rampage about just you know the whole complex of forward guidance and we're talking about oxal forward guidance not Jack Farley's podcast but um just what the FED has been doing over the past decade or so and this idea you know he basically was just saying you know we need to get rid of Ford guidance and you know if we're going to cut cut and if we're going to hike hike but it's doing a lot more harm than good and you know in his words he's saying you know drone Powell you're not you know you're not a rock star don't get on 60 Minutes and and talk about all these things just just get the job done”
US economy is much stronger than other developed economies right now, attributable partly to higher government spending, but this is partly counteracted by potential soft austerity during the election period when no bills will pass
“a lot of what's going on right now is that the US economy is just so much stronger than everybody else right now and you know you could say a lot of that is attributed to just a higher um amount of government spending”
Oil and gas companies in 2020 had zero-dollar oil but were still funded directly by the Federal Reserve through primary and secondary facilities, representing extreme corporate welfare
“we had issuers I worked with on a lot of oil and gas companies and these guys oil was zero and these guys were toast like these companies were talking directly to the FED for financing because there's the primary and secondary facility that the Fed opened up and so they were issu the Fed was issuing credit directly to these these uh Triple B uh companies basically like that like a lot of oil at zero dollars”
Some private student loans reach 12-14% interest rates while fed funds was at 3%, representing a massive spread and irrational pricing of risk
“some of these private um loans can be as high as like 12 14% yeah you know and these were being issued at a time when fed funds was at like 3%”
Media companies create contradiction in headlines and emit bearish content because bearish/doomer narratives get more engagement than accurate balanced takes, creating echo chambers and misallocation of attention.
“at Real Vision the the more bearish like you can be the more eyeballs you would get so if you had like a really like bearish thesis you get way more views than if you're like consistently calling accurate things week in and week out”
During inflationary and stagflationary environments, people see higher payoff from gambling and speculation than productive work, which pushes them toward risk-taking rather than away from it
“you're describing these situations where especially in an inflationary or stagflationary environment one of the adverse consequences of that particular regime is that people see that the payoff on doing things like gambling and speculating is actually higher than productive work”
Ohio State University convocation speaker received boos when making marginally pro-Bitcoin statements, showing mainstream sentiment that Bitcoin is a scam asset that went to zero when Sam Bankman-Fried got jailed
“I know like last cycle a lot of Bitcoin fundamentalists got burned... there was that convocation video I think it was Ohio State University where the person speaking started to just say a couple things that were you know just like marginally Pro Bitcoin and the whole crowd started booing and they're like get this guy out of here this is crazy and it shocked me is awesome”
People sound smarter when criticizing than when advocating, creating intellectual bias toward bearish takes, and Mike went through phase of being macro doomer before achieving more balance.
“there's partly a human bias that you sound more smart when you're criticizing something oh yeah than trying to advocate for something new I spent most of my 20s doing that like what funny is like I was like such a hater for so long and I'm like the more and more you learn you're like okay like let's be a little bit more balanced here”
In real terms, credit investors are doing poorly because while nominal credit spreads are tight, they are losing all purchasing power to inflation, making the nominal strength in credit misleading
“I think the answer to this is the nominal vers real because if you you look at hyg divided by gold for example it's down only because in real terms so while Credit in nominal terms is very strong that's simply because we're spending these deficits in nominal terms but you're you're as a credit investor you're doing horribly in real terms because you're you're losing all was purchasing power is kind of how I view that”
2020 ICO collapse was driven not primarily by bear market, but by ICO projects needing to dump Bitcoin and Ethereum collected in 2017 to pay for real-world expenses denominated in dollars
“whenever I think about why the 2018 cycle ended when it did was is actually like icos collapsing under the weight of themselves because you had a bunch of people that raised in when when you raised an Ico you did your initial coin offering you didn't collect dollars you collected Bitcoin and ethereum and back then Bitcoin and ethereum was maybe you could do that as a treasury today but you had real world assets that were or real world expenses denominated in dollars so you know all of those icos that got raised in Bitcoin or eth people eventually started to dump those for dollars to actually begin work on the project”
Risk-free rate (long-end yield curve) is broken, which breaks the discount rate used to value all assets, meaning traditional valuation frameworks don't work when rates are artificially suppressed.
“when I came to the conclusion that the the longer end of the yield curve is broken which means the risk-free rate is broken which means the discount rate that a lot of people base a lot of assets on is broken like that just makes me submit to the narrative”
Economics became a religion in modernism, and young generation will be more mindful about what they allocate capital to because they understand there are non-economic values worth preserving.
“that's when like economics became essentially religion I think we're actually hitting this point where economics became such a religion that we forgot to ask ourselves like about like what it means to be human and I think that's nihilism is going in a bare market and people will start actually putting their money in places where they believe instead of just like this detached you know uh ETF allocation thing”
Tom Brady lost $30 million on crypto and this fact drew huge laughs at his roast, with even Kevin Hart apparently reacting strongly, showing the zeitgeist is still very skeptical of crypto
“there was the roast of Tom Brady they had a bunch of different people out there they had the athletes they had The Comedians and this woman Nikki Glazer who I think gave probably the best roast of the night had this F this jab at Tom Brady which I think got the biggest laugh of the entire evening which was and you lost 30 million on crypto you know Tom like even grank know that not real money and people just howl like people that good and and every I saw Kevin Harts like slapping his knee”
Biden administration indicated it would veto the repeal of SAB 121 rule, which requires custodians to record customer digital assets as liabilities on balance sheets, making it impossible for custodians to hold digital assets
“there was a so there's something called Sab 121 which was something that the secc passed and they circumnavigated some due process to get it passed but it would require custodians to record customers digital assets as liabilities on their balance sheets which basically makes it impossible and extremely prohibitive uh for these custodians to hold digital assets and so there was going to be a repeal of Sab 121 because everyone kind of got together and said this doesn't make any sense and Biden indicated that he would veto that if we were to go through”
Trump issued NFTs and held a Mar-a-Lago event where NFT holders received audience rights, with attendees including Celsius, AI Feldman (ThousandX), and other crypto figures, and Trump gave unambiguous pro-crypto statements
“Trump issued these nfts a little he's actually issued multiple tranches I guess of nfts and in true influence or form they come along with rights and he's there are stories of people taking him giving phone calls to people but he he issued this uh I guess I don't know what the exact rules were maybe had to own a certain amount of trump nfts but he granted an audience to a bunch of basically all crypto people because you're nft owners in Mar Lago and a bunch of people like celus went down there saw AI Felman of thousand X podcast went down there... and he came out and unambiguously said that he is pro crypto in all way shapes or forms”
Student loan forgiveness creates a moral hazard and breakdown of social contract because it penalizes those who played by the rules and paid off their loans, while rewarding those who didn't, generating backlash and populist sentiment
“if I was someone who paid off my student loans and you'd be pissed I so ludicrously pissed that's the second time I've used the word ludicrous but like would I would be absolutely livid and it just it you're incentivized not to play by the rules at this point which is you know breakdown of the social contract”
Crypto is structurally pro-cyclical because block space is limited and demand fluctuates massively, creating boom-bust cycles as capacity becomes constrained during bull markets, forcing creation of alternative chains
“there are these structural reasons why crypto remains Vol like uh cyclical I I think it's a structurally pro cyclical industry basically and you you could like even this the airdrop meta that we talked about but there is this the real fundamental reason why I think crypto is cyclical is that in a weird way block space is this very it's like any traditional capex sort of asset there's a certain amount that you can write to a blockchain at any given time and the demand around the writing to that block space fluctuates a huge amount and you actually can't bring enough Supply on to satisfy demand when retail starts to come in and that's why you get the creation of all of these other chains and coins and tokens and things to speculate on”
Retail may need sufficient time to forget the pain of the 2022 FTX collapse and previous cycle losses, suggesting the short recovery between 2022-2023 was not enough time for retail trauma to heal
“I I do wonder if maybe it takes retail does the average retail person has some length of time that they need to forget about how much money they lost last cycle and the shorter than normal recovery between 2022 and 2023 just wasn't enough time for people to fully forget the pain of FTX I think that could be a big one for sure”
Forward guidance appears to be working because markets remain long credit and treasuries despite fiscal deficits at 7% and rising inflation, resembling a Wile E. Coyote moment where participants are walking off a cliff but haven't looked down
“my my point is the forward guidance seems to be working for the bond market right here even though it's almost like a Wy Coy coyote where they're they're going off the cliff and they say hey we're fine and then like you'll have these moments where you look down you're like oh [ __ ] yeah we have a 7% deficit and you know inflation's getting worse so that will come eventually but right now I think people are positioned wrong in the near term”
Crypto tokens might serve as a bridge between private and public markets, allowing companies to access public funding while maintaining some control, but this depends on political environment becoming more favorable
“I do wonder if tokens end up being this bridge in between like private and public markets um at some at some interval but I think they could but again it really it it becomes a political thing”
There is potential for Fannie Mae or Freddie Mac home equity line tapping programs that could unlock $4 trillion of potential equity in homes, allowing people to lever up and spend against home equity to stimulate the economy into the election
“they're floating into the election is this you know Fanny May or Freddy Mack uh home equity line tapping which is about4 trillion dollar of potential equity in homes that people can lever up and take money against so they want to lower you know your your home equity line rate so you can essentially put lighter fluid on the economy”
Current market environment is characterized by 'stop-start' liquidity where problems cause yields and dollar to rise, requiring Fed to 'talk it down', rather than the clear unidirectional liquidity flow seen in Q4
“this is the Vault controlling the volatility controlling like they're pulling out all the stops to kind of keep this thing paper over all the things that are problems it's like whacka all boom boom boom and that's what we keep seeing as soon as you get to these extremes I think that's what's pling the market right now is this like stop start of look liquidity it's not the clear One Direction onedimensional situation of Q4 where the market was off sides to the downside liquidity was coming back in a big way”
When political/social institutions reach fourth-turning extremes, incentive structures change and disconnect from constituent interests, making institutions lose touch with what people actually care about
“that's that's Lely you know these this is what happens when you're in a fourth turning and these things get so large is your incentives change and you you get disconnected like the media is not talking about the things we're talking about the mainstream media where we think people care you know maybe we need a bigger audience but like it I think we're more tapped into what like the Next Generation actually cares about than you know these giant you know huge incentives”
Analyzing crypto cycles too closely has caused more pain than gain for average investors, with stock-to-flow models predicting 100k-250k and luring people into holding through major drawdowns
“analyzing Cycles has caused a lot more pain than gain for the average person you know I know like last cycle a lot of Bitcoin fundamentalists got burned pretty hard because they were looking pretty closely at things like the stock to flow model that was saying that we're going to go to 250k or at the very minimum 100K and so they they got left holding the bag all the way back down again hoping for that moment”
Comedians are the best observers of where power resides in society because they identify little-noticed human insights and flip them for laughs, making comedy a window into zeitgeist
“what's a good like guys you know what a good way to get a z guys on things is listening to comedians oh yeah those like whatever makes people laugh like it's a pretty good way to understand where power resides in whoever the comedians are making fun of that's where the powers reside it's a really good way to get Zeitgeist”
Student loan debt forgiveness should be viewed not just as a handout, but as addressing a broken education system where very high interest rates are offered to young people without means at a time when federal funds rates were much lower
“if I if I was going to be a one issue voter it would be something around the idea of Education it just feels really intuitive to me that if you want to improve things you gotta rewire the software that's going through the hardware of people right like that's the only way to really achieve better outcomes and the the way that we do um you know student loans and and offering debt to extremely young people at very high onerous rates it just feels broken to me”
Meta's stock tanked on guidance about huge capex investment despite good earnings, demonstrating that public markets punish long-term investment spending in favor of near-term EPS, creating incentives for companies to stay private
“it there is a extremely like large capex cycle that's going on around it's so funny how the meta stock tanked on that announcement too like they had good earnings but their guidance around the huge capex investment just tank their stock because you know it just goes to show like I understand why a lot of these companies want to stay private because you're just playing the EPS expectation beat analyst Road Show and they don't really care about long-term Investments”
Private capital markets have more abundance than ever before, so CEOs and founders rationally choose to remain private rather than subject themselves to public market scrutiny and short-term earnings focus
“it's probably a healthy balance here between short vers long termism and really it just comes down to the founder and whether or not they or the CEO or whoever's in charge and whether or not they were right but that's not even the relevant question it's just the availability of capital the availability of capital in private markets is larger than it's ever been and given the choice what CEO or founder would subject themselves unnecessarily to scrutiny from public market investors that are more short term it just doesn't make any sense”
Student loan forgiveness programs are being pursued repeatedly because the administration faces a fiscal and debt spiral, and the next generation feels 'completely annihilated', with multiple tranches of forgiveness likely to keep happening
“this is a major problem for Biden and it's why you know they're seeing student loan forgiveness this just G to keep happen more and more in my opinion is they're looking down the barrel of a fiscal you know debt spiral and you stent alone spiral the Next Generation just feels completely annihilated”
Federal Reserve officials are appointed, not democratically voted in, so they should not be making broad economic policy that should reside with elected officials, focusing instead on specific policy execution like rate decisions
“the other side of that coin is that the these people that are making these decisions at the Federal Reserve are not democratically voted in but are rather appointed and I think a lot of those they they've adopted a lot of those aspects that should probably reside within people that are voted in versus pointed in and I feel like the FED should focus more on some of these more specific aspects like if you're going to hike hike and if you're going to cut cut but a lot of this this big picture thinking I feel like has been taken over by those that are appointed rather voted”
Venture capital allocation cycles are on 4-year schedules requiring capital gathering, allocation, and vesting, which aligns with crypto 4-year cycles and may be the real driver rather than on-chain mechanics
“the best argument you can make for a cycle is the Venture Capital allocation cycle of basically they need those investing sched drills are on a four-year cycle and we need to go through that process of gathering the capital then allocating then vesting and you know you got to pump those numbers up just in time”
Trump's statement 'I love crypto but my favorite is the dollar' is a comedically perfect response that acknowledges crypto support while maintaining plausible deniability about commitment
“he's like I love crypto but my favorite is the dollar the US dollar okay”
Higher education institutions have become hedge funds rather than educational institutions, charging 14% tuition increases annually while wages grow only 3-5%, creating unsustainable cost escalation
“you need to make the uh institutions in charge of like some of the debt forgiveness there's no like if you're if you're charging you know 14% you know higher tuition every year and wages are going up three to five percent it's like you're you're the problem the in these levered hedge fund higher education institutions are the problem like that they're hedge funds they're not institutions”
If stimulus is to be unleashed before the election, it requires financing, which creates constraints on the administration's ability to simply 'print' stimulus packages, making the timing and sequencing of stimulus uncertain
“if they could they would unleash all these stimulus pack but that requires financing so it'll be interesting to see how that plays out”
FTX founder Sam Bankman-Fried's fraud caused major stains on Democratic party because he was a large donor, and this damage to Democratic credibility may be driving crypto opposition as attempt to regain moral ground
“I just I don't forget that the dem's biggest donor got is the biggest fraud fraudster since you know Bernie made off so they all have such stains on you know they're they're personally and professionally very very damaged from from that”
Rather than criticizing the Fed's 2020 emergency response, the real issue was continuing stimulus through late 2021 and not starting balance sheet reduction until March 2022, which delayed inflation recognition
“the less controversial thing is is that what they didn't have to do was keep stemng for through uh late 21 right like okay if we recovered uh we got out of this Gap everything's opened up you probably don't need to be handing out $1,500 helicopter checks a year and a half after and they didn't start balance sheet reduction till March 22”
The question 'Is this cycle different?' is debated but historically resisted, with the two things causing confusion being Solana's rapid outperformance and Bitcoin ETFs pulling forward price appreciation earlier in the cycle
“let me ask you guys do you think this is the most it's like the question that launched a thousand podcast but do you think this cycle is different from previous cycles and I have historically resisted that I I don't know like I know Quinn you and I have talked about this quite a bit is actually this cycle is very similar to past Cycles the two things that are messing everyone up is that the salana ran really hard really fast that kind of threw people for a loop and then also maybe the Bitcoin ETFs pulled forward some of the price appreciation and growth earlier in the cycle that otherwise and I could paint a pretty compelling picture for either one of those things being true”
DAX and Euro stocks are making new highs on expectations of a global easing cycle, suggesting European markets are pricing in Fed cuts and European ease, and the dollar has likely peaked
“on this point two things check out the Dax and Euro stocks making new highs here have you seen that like this is where not only is the S&P The Q's about to make new Highs but like Euro markets are going up because like they're anticipating a global easing cycle I think we we've probably seen the top in the dollar personally”
Meme coins are doing well but they represent a pure crypto PVP (player versus player) game, not new retail participation, because retail doesn't know about or participate in memecoin frenzy anymore
“and that's why mem coins are doing well that's a super crypto PVP game that's not a new retail for the first time game like retail is not buying bom you know and pumping it to a billion dollars in 24 hours they don't know what that is it's already dead by the”
Trump is one of the best comedians of the current era because he understands human psychology and uses comedy effectively to shape perception
“I mean Trump is one of the best comedians I think in in today like he's to like I was say when we talking about his crypto and he's like I love crypto but my favorite is the dollar the US dollar okay”
Crypto lacks clear near-term catalyst, so it needs one to go up given supply dynamics, making the election and Trump's pro-crypto positioning a potential catalyst but still too far out to impact near-term prices
“crypto's really been struggling over the last couple weeks for for a catalyst I think and and in some respects I don't think it's I don't think the market has recognized uh Trump and Republicans being like undecidedly Pro crypto or you know undoubtedly Pro crypto um so in some ways that that event I think is positive it's still a little too far out on the calendar for people to to be seeing that as a near term positive Catalyst”
Tulsi Gabbard described Democratic party operations as focused on money-raising events and short meetings with DC officials rather than constituent service and governance
“did you hear the tulsey gabard thing this past week she's like no we we didn't do anything when I was a Democrat of essentially you know going to our constituents and figuring out what they care about it was all about going out raising money you know you'd have a money raising thing at nine then you'd you'd have a a short meeting with someone in DC it had nothing to do with governing your your constituents”
Fast forward one year and Kevin Hart will likely be part of commercials promoting crypto, illustrating the cyclical pattern where skeptics become advocates after bull markets
“and every I saw Kevin Harts like slapping his knee like and gr's like I knew it wasn't real money and it just tells you where the zeit ghost is on yeah crypto at the current moment you know yeah and then you know fast forward a year and a half and Kevin Hart will be part of some commercial saying you know more basically for sure that guy I'll sell still sold anything him and Matt Damon we'll be on the next one”
Democratic party donors include large banks and legacy institutions that should theoretically oppose crypto, yet they support anti-crypto policies, suggesting hidden dark forces or political think tanks are driving anti-crypto stance
“well when your donors are big Banks and uh you know Legacy oligarchs it's really but they but they must be on the Republican side too there must be some banks on the Republican side and and they're Pro crypto so like what's driving this that's really the the thing is there there's some big dark Forces hidden forces behind behind or is it just some like political think tank that said if you go against crypto you know the left is going to support you”
Next leg up in global liquidity and risk asset prices will come when the Fed signals rate cuts, possibly in July if inflation data softens, or later depending on data
“I think that's that's probably where the next leg up and liquidity and risk prices comes in my view is when the FED signals maybe that comes in July if we get some soft inflation data Maybe it's later but I think everyone's just kind of at the whim of of when the FED cuts on this point”