Transcript
Speaker: Welcome to a new episode of the InSilico Terminal podcast. This time, very professionally produced IRL a special episode. I feel a bit like I'm on Joe Rogan, and I guess that would make me Joe Rogan. But my guest today is FlowTrader.
Speaker: Right, if you're Joe Rogan, I think I would still be Flow Trader. But we'll go by Flow a little bit easier. Yeah, so ah we have ah a very nice studio here, a nice setup, a bit nicer than usual. But um yeah, can mean can you tell me a bit about who who you are?
Speaker: Yeah, again, i go by flow. I've been in the crypto space just generally now going on for, God, too long, but around nine years. um First got into it actually through the stock. So back in 2017, 2018, around then,
Speaker: ah you know twenty eighteen around then at the time, miners were first becoming popular. So things that people still trade now today, like Riot, Blockchain, Mara, ah things of that type were first coming onto the market. um And funnily enough, you know, Mara was a patent troll company before they converted into a miner. Like Riot Blockchain was a, I believe, a biotech company. They worked on like dog medicines. Yeah, before they became a crypto miner. So, interesting interesting you know, it's one of those times where, you know, I think similar to now, you're seeing a lot of businesses pivot into what is ah kind of the current meta or the current narrative, you know. We've seen that a lot with you know AI, I think, in in this cycle. So ah that's kind of what brought me in is stocks. yeah My background is somewhat, I guess, just as an individual trader. i was doing it on the side just as kind of a hobby along with my regular work.
Speaker: um for the first couple years. And then really, I think the common story is that ah COVID is what really drove me to you know kind of take it to the next level. you know You're at home, you have a lot of time. um Your hobby pretty much becomes your you know your kind of like main focus, I think, for a lot of people during COVID. so That's what brought me here. And ah yeah, just over the course of the last few years, just have gotten more and more into DeFi and eventually landed in the in the perp space. And I think I kind of like that's where I found that I belong at this point.
Speaker: So it's been an interesting, interesting few years. And obviously that's a very abridged version of what happened. You know, glad to go into more detail, you know, fill in the blanks there. But ah yeah, it's kind of general gist of it. What does your your trading usually look like nowadays?
Speaker: So high leverage, most of the very short term these days, like not taking a positions that it would last more than, let's just say, three to five days in most cases, um basically contained within a trading week, like trading sessions. So normally I'm not taking any positions into the weekend.
Speaker: um I figure like just in general, that's generally when you get hedging flows. So at that time, I'm either closing out or hedging myself, but primarily I'm actually just not trying to hold any exposure over the weekends these days.
Speaker: as we've kind of learned, that ah the news cycle is kind of at this point timed around market events. yeah you just have to be very careful about what where you're holding positions into, including from the weekends. because You get some of the biggest announcements there outside of market hours, outside of the best liquidity, and just get your your position completely reversed against you. So not trying to deal with that at all. I love my weekends, I like having a good time. not going to be trading this weekend, and ah that's kind of ah how I like to keep it. Yeah.
Speaker: So um when you when you do your trading, because I ah got ah
Speaker: i learned about your account through your macro takes, I think they are very interesting. And is that how you mostly look at the market? Is that like the lens where you view your trading? or It's a like kind of a background or a general framework. like One of the things is that I was taught very early on is don't trade against your macro, which is just really another way of saying don't trade against the trend in some ways. Because the macro is what's going to determine that the general trend, the general direction of the market, what assets are ripping, like, secularly. um And from there, like, you, as long as you can kind of nail that broadly down, then you can kind of pick your assets, pick your plays from there, right?
Speaker: um We've been in an environment where, you know, the narrative has been debasement. The macro narrative was a lot of money printing, a lot of issuance. of treasury bills primarily.
Speaker: And ah you know in these types of environments, when real rates collapse, gold does really well. So I've you know managed to trade gold ah fairly successfully over the last couple of years. It was never something i I traded very heavily before. i left that to other people. yeah i mostly stayed somewhat Once I got into crypto, I mostly stayed within crypto to some degree.
Speaker: um But yeah, as the space has moved towards you know just ah more into RWAs, started trading more gold, more oil, et cetera. So these assets are much more direct ways of of expressing your views um on these actually macro narratives.
Speaker: Obviously, crypto, Bitcoin is nowadays very sensitive to these types of things too, but I would say that Bitcoin tends to kind of switch narratives. or like yeah It's ah not consistent about what it does. It moves idiosyncratically to the rest of the market sometimes. and you know Some people say it's sometimes correlated to NASDAQ maybe, sometimes correlated to gold. so it's It's a pretty interesting asset class, and i think that that's one of the things that keeps me around is just the just the interesting interestingness of the whole space.
Speaker: What do you think Bitcoin is right now? Because like last year it was supposed to be digital gold and gold went up a lot. Bitcoin didn't really follow. And then we were like in a pretty brutal bear market while AI was ripping. So it's kind of it lost like the the narrative a little bit. yeah so But it's coming back a little. So what do you think it is?
Speaker: So I think that again, it ebbs and flows a little bit. But the primary thing is always going to be that it works somewhat as a overflow liquidity like bucket for what I would consider just excess capital. Like once a lot of other profits are made in the market, there's, you know, hurdle rates become a little bit harder to hit, you know, in, let's say, an industry like AI. yeah Well, then, you know, I need to find someplace where I can actually hit, you know, hit those hurdle rates, get the proper i ROI out of my investments. And if we're looking at the market over the last few months, um you know we've seen semis, memory, like all these different things run like up to you know very high levels. people People make a lot of money.
Speaker: And then after that, people tend to look for like the next thing. like what is not you know Just to put it very simply, like what is not up as much? What hasn't pumped yet? And crypto actually turned out to be the thing that hadn't pumped yet. you know it that it Obviously, it's been going through what you know you can see you could consider a bear market. i would consider it a bear market. even though the rest of the market hasn't necessarily you know agreed.
Speaker: um But yeah, i would say that that's kind of where it's at right now is back to being an overflow liquidity kind of basket for this excess capital that's there to be invested that already found those returns elsewhere.
Speaker: So um what do you think in general? I think right now the macro situation is very interesting because like this year, obviously we've had the Iran war, which has been very, ah caught a lot of people off guard in a sense that like the indices were very bearish on the indices and then it just went straight up again, as it always kind of does. But um right now we're like, ah I think a month out from the midterms, as a non-US person, but I think there's very soon. And we're in kind of a weird situation because yields are rising a lot.
Speaker: like They're very high, very high for like the last 10, 20, 30 years. And usually, yield rising is bearish for risk assets, but... um There's also the AI build-out that is still happening. Right. You have a high high inflation, but you also have high growth. Yeah. And that's what's kind of ah confounding things a little.
Speaker: um I mean, similarly to, you know, kind of 2022 or 2023 in a way, ah where we also were experiencing ah you know an inflation issue, what ended up happening is is the economy actually ah actually ended up growing itself out of it, right? It found it found production like you know more productivity. It found more growth to actually...
Speaker: essentially mitigate the effects of inflation. You know, we outgrew it. So I think that that's somewhat of the goal this time as well yeah from the current admin and just, you know, just in general across the world, you know, current administrations. um And realistically, I think that ah the economy is in such this big growth build-out phase. It's like, you know, the biggest infrastructure build-out, arguably, is since, like, we were building railroads, you know, in the United States, that it's very possible that we may be able to outgrow it again.
Speaker: But I think that there are some cracks starting to show, you know, whether it's looking at things like consumer savings or you're looking at things on a more firm level, like where you're looking at the CapEx mixture of some of these large companies, where, you know, early early on the build-out, this is mostly being,
Speaker: ah built out using, you know, the cash on balance sheets. Whereas now we've started to go into more deeper into debt financing, which obviously can be very sustainable. These companies print money. But, event but you know, it's just seeing that mix eventually, it sort of deteriorates over time, right? You know, you get further and further type of into, in the sense, into the risk curve. yeah um And ah that kind of deteriorates. So I think that we're in that phase of just ebb and flow and just, you know,
Speaker: where it's kind of like a Goldilocks in a sense. Like you said, the markets have just been ignoring it because we go from like, it's over to we're so back. you know, we're literally in it, we're over, it's so back market. And just in those types of wall of worries, as people call it, the market just tends to walk through them until the fundamental situation deteriorates so much that it just can't be ignored. yeah COVID, another good example. with them COVID was already raging across the world um in that, but it took for months, you know, for it actually to hit the markets until there was literally a breaking point. So,
Speaker: it's so the classic saying is the market remain irrational longer than you can remain solvent. So I think that ah for me personally, as someone even who may be leaning, starting to lean even more bearish, that doesn't necessarily mean that I want to be short the market. Yeah. um top-taking is a very dangerous game.
Speaker: you know I'd rather ah you know kind of let things play out, and if it clearly becomes you know the trend shifts, then we can start to think about you know it start taking some shorts. But at this point, I'm mostly in a phase of ah like tactical longs, I'd say. Again, like three to five-day trades, depending on what's kind of contained within that week off the the macro situation. you know At this point, we're all headline traders. Trump has turned us all on headline traders. So kind of doing, you know that's kind of like what I am into at this point, just because I really don't think that there's much of a of a choice with the way I tend to trade or else I'm just going to really be end up taking a lot more losses. So it's kind of like i've I've adapted to what the market has become over the last ah couple of years in some ways.
Speaker: Yeah, I think this year especially has been, i feel like the whole year has just been Trump up and down every day. He says something different and we just have to kind of like play around that and deal with Right, right. and And I think that a lot of people's confusion about kind of interpreting what Trump either is going to say or what the effect of his words will be is that a lot of people, um and God bless them, you know, look at words as ways to just communicate facts.
Speaker: um or information. Like if someone's telling me something, they're telling me it to increase my knowledge or give me a fact. But the truth is is that words are in many cases used to get a certain effect.
Speaker: So you know when I'm looking at some of this messaging, like what is the incentive? What is the effect? like what is know What is the reason that this might be being said? So I think that if you can ah you know kind of ignore your biases a little bit and just like think about what the incentives are, which obviously is to you know keep oil down to some degree or just keep it contained so that it doesn't get out of control.
Speaker: um You can just ah start to identify a lot of these patterns. So recently I've of course just been long. one of the things I've been saying not quite since the bottom, again, because bottom top-ticking is a dangerous game, but since we kind of like started marching upward again is that the oil math hasn't changed.
Speaker: um You know, something that a lot of people are talking about recently is like the barrels per day coming out of or going through Hormuz has started to approach pre-war levels. Now, I don't necessarily believe that, again, because you got to think of incentives. um To me, that's you know just clearly propaganda. I mean, if we're looking at alternative OSINT data, things or maybe about 70% you know obviously that's a little bit of a wide gap too, but it's their sources differ um That's currently transiting um And then the real constraint again is in refined products, you know This trade could open tomorrow, but that's not gonna bring back all the refineries that were yeah bombed That's not gonna bring back all of this infrastructure that leads to other refined products like diesel and Diesel is the thing that really can bring down the economy. They call me, you know just a industry, manufacturing, trucking, all this stuff, you know, all runs on diesel. So at a certain point, this is the danger as far as um that, like, fundamental thing that just could build up and then eventually just reach a breaking point that we didn't, know, that's kind of impossible to see beforehand.
Speaker: um So that's ah another thing that I've just been paying a lot of attention to, like been trading oil actively. um And really, again, just paying attention to incentives. You should understand that they want to bring the market down, but that the natural market forces are are sending it upward. So it's it's somewhat...
Speaker: Again, if you can get past the biases of just thinking, oh, Trump is going to nuke the market or Trump's going to scam the market up or just having these like, I think that's something that should be really just removed from like any analysis and just really just look at what the actual incentives are um and you'll start to get a good idea.
Speaker: How big do you estimate the risk to be for this winter to like have a downturn in the economy? Because I think that was something that was talked about quite a lot earlier in the year when like oil prices go up. it's like down Everything is basically downstream of oil in the economy. But during summer months, less energy is used. And during winter, people use more energy. The the prices actually hurt more and and also did all these downstream effects of food and fertilizer and stuff like that. Do you think that will have a real-life catch-up effect on the numbers or will it just be blown over i think that uh it's more likely to be blown over at least through the winter again i think that if we're looking at things just on a cyclical basis and historical basis it tends to be when you're going into the next year like let's say end of q1 into q two that's when you start to actually start to see some of these cracks um
Speaker: just There's a lot of different reasons for that, like including just you know earnings starting to turn. like you're actually seeing the earnings from the previous quarter, and the market you know basically gets to digest that. um But also, there just tends to be, like I mentioned, there's a lot of economic activity that happens during the winter.
Speaker: um But again, that that deteriorates the situation, but doesn't reach it necessarily to a breaking point unless, you know, there's some other, something else happens. There's, ah you know, Trump has talked about bombings again, starting again after the midterms. So, kind of of course, like none of this stuff is is assured.
Speaker: um But yeah. I thought you had some interesting takes on the Iran war as a whole because, ah like you said, it's mostly just about incentives, like the information that we get. no one I feel like no one really completely understands what's going on. I felt like for quite a long while that also on the ground in Iran,
Speaker: i'm I'm not even sure how clear it actually is, like who is in charge there. Maybe it's become a bit more clear now over the months, but I definitely felt like earlier this year it was like just some random person popped up that like someone talked to and there's like PC or whatever. So do you do you think like who is in a better position, the US or Iran? And is it going to escalate more or de-escalate more?
Speaker: I was just going to say that's an argument for decentralization, right? You know, that's ah a clear argument for decentralization adding to resiliency, because if we're talking about a more centralized state, then you know, a decapitation strike like we did against Iran in many cases might have ended things. But again, because they're a decentralized command structure without any one single leader necessarily doing things that works on them in cells, it's very hard to defeat that type of enemy or insurgency. So, ah yeah, again, like a it's in some ways, ironically, again, argument for the benefits of crypto. That's literally a benefit of decentralization is that level of resilience. um I would say that, I mean, you know, everybody loves the underdog, right? um So there's a lot of people out there for just, I would say, quite literally, just underdog type of sentiments. Like, people don't like to see the big, like, ah don't like to see bullying in some ways. So, but i
Speaker: And so they might want to believe that Iran is in has some sort of advantages, but in reality, they, yeah, there's just not really any vector um of this conflict that they have an advantage in.
Speaker: um Some people might say, well, they can control the flows of oil through Hormuz. But if you're really, really looking at how the world operates, that does not necessarily affect the United States as much as it affects anybody else. The United States, along with Canada, just so essentially North America, and now as we've joined ah this kind of somewhat block with Venezuela, we have the capability to essentially be an independent energy block, yeah both in production and refinement.
Speaker: um So while it may hurt here domestically, like obviously the price of goods, you know, inflation is a problem. We are also, you know, again, somewhat outgrowing it um in many ways.
Speaker: So ditch the economic, military, just like advantages, geographic and geographical advantages of in the United States, which is really just being, know, on the other side of the world, on the Western hemisphere, um just is somewhat overwhelming. And ah there's...
Speaker: really, ah you know, not anyone who could necessarily challenge that in any time soon besides the obvious being China. But again, their incentive, again, if you're thinking about incentive, this is like a, you can't think of things in like a superhero movie. Like this is not Marvel, you know what i'm saying? Like China and Russia and Iran are not gonna just like decide to fight the bad guys. You know what saying? Like that's not how things work. um what's and What ends up happening is like, who is the bigger trading partner?
Speaker: Who has more economic leverage over China? Obviously the United States. So China's more likely to make a deal with the United States that screws Iran on the back end than they are to really collude very deeply and openly with the Iranian state against the United States.
Speaker: Because it would be more... It's me much more devastating for them to lose the United States as a trading partner. um And I think we've seen that with some recent deal-making between, like, Trump and Xi and some sanctions relief. et cetera, that this is likely the case.
Speaker: um One thing that I really noticed very early on was I was watching Syria. So I've been interested just in the conflicts in that part of the world and just history in general for a long time. So, you know, seeing ah the regime in Syria fall, basically, Assad, I believe,
Speaker: ah That was somewhat of a first shot off the bow as opposed to what we're gonna do. Yeah, no, nobody uses Facebook anymore. it's kind of embarrassed to say that I do but at that point I was still kind of like posting there and Twitter like so you know I kind of keep my real friends somewhat in the you know real life friends when in loop on this too is I was I had check marks so I was like basically on the line I was like Syria just fell next things we're going for our Venezuela and Iran and Cuba.
Speaker: And that post is still up, you know what i mean? as So as soon as, assume I knew as soon as you know Syria turned that the next steps were gonna be to take these places over because again, it's it's really just about controlling geography and infrastructure and trade routes um realistically. that's it's It's all just about um securing trade routes for the most part and just sea routes and things like that. So,
Speaker: The Strait of Mormonism is one, but obviously we've seen Houthis close the Bandal-Abbab Strait recently, which has added some difficulties, but again, They've made a secret deal with the United States that's been reported about, you know, essentially they've agreed not to attack American or Israeli tankers um in exchange for some relief basically from the United States and to not for the United States not to launch an attack on them. And they'll just basically continue attacking other like countries' tankers. So, again, if we're looking at incentives again, and we're just looking at... um
Speaker: what people are doing, it really, my conclusion is, is that we are actively squeezing um not just Iran, not just China, but also Europe um and, you know, some of some of even what might can be considered some of our eight ah you know Asian allies here um economically. yeah um Some might even say that when it comes to the Middle East specifically, we're somewhat engaging in the scorched earth policy. Whereas if we're going to leave this region and we're going kind of return inward you know to the Western Hemisphere, well, basically, we're not going to let any of our adversaries basically come in here and potentially be able to use all this refinery equipment, like use all these pipelines. like we We're essentially leaving with everything. well like You have to rebuild it with your own money or we're going to we're going to loan you the money back. So again, on a a pure ruthlessness level, I mean, if we looked at what happened, for example, in a Riyadh, Saudi Arabia,
Speaker: And just like all of the the infrastructure damage there, I mean realistically what's gonna end up happening is we're gonna loan them money to rebuild that. So I mean in this game, ah like I said, we're not it's not Marvel, there are no superheroes here. Everyone is just really, really self-interested when it comes to this ah as what people would call what is it, Machiavelli we call real politic, right? So it's really just all extremely self-interested, pragmatic type of decision-making. And again, if you just look at things that way, not ideologically, you should really, you should ignore the religion, you should ignore the ideologies, all of that, and just really look at things from a just economic resources-based level, yeah and things will make a lot more sense.
Speaker: I definitely agree. I think mostly if you like, ah I mean, obviously it's a bit more difficult if you're like from an affected region, then it might affect you a lot more emotionally. But I think if you just like look at things in general, then it's mostly just like economic dependency and stuff like that. And it doesn't really matter too much about ideology and anything like that.
Speaker: But them do you think that like um the... I think it's a good perspective to have that like the US s is actually not doing as badly as is sometimes the perception on Twitter. Because I think this headline spam of Trump has been...
Speaker: causing some like delusionment in a lot of people where it's like yeah you just like can throw away what he's going to say anyway or like we don't really have a source of truth for like a lot of stuff anymore so um the the us is kind of just like losing and they're like trying to to um get it all of the news cycle and just like ah the midterms are coming they're just like focusing on different stuff right right all of that but there's actually a good case to be made that the us is like doing pretty decently in all of this, at least compared to everyone else. Right. And the and the only reason that maybe they're, you know again, is the midterms that things aren't looking even worse for Iran right now, potentially.
Speaker: um And again, like ifre talking about propaganda things as well, at one point, you know, there was just a lot of talk about how low the US was on munitions. I mean, i know, again, it's it's popular to want to think of the US government under Trump as incompetent, but I mean, it's still...
Speaker: I mean, realistically, it's not. It's a very competent competent um sort of organization institution of the US military. So looking at things as if they they don't know what they're doing, I think, is is a huge, huge mistake. Because if you're actually looking at what has happened and you're not thinking this is just a set of coincidences or mistakes, like all of this is extremely coordinated. Like I said, there's a reason that when Syria fell, immediately I knew exactly what the next things, the next steps were. um Not just thinking that we're all bumbling into this on accident. That, I think, is is the most dangerous assumption anyone can make in this market right now, is all of this is happening on accident.
Speaker: one of the One of the things that I was ah aware of very early on during the initial strikes that Israel was making, for example, because, you know, there was someone with the first shot off the bow here in 2025.
Speaker: um where they had, you know, Israel and Iran were trading strikes. um is but Yeah, so basically that was like the first off the bow. And I essentially just knew at that point that we would have another conflict. And I started looking up just old think tank, um like Brookings Institute, things like that. And there's just old papers that go back far beyond like the Obama administration that are detailing somewhat of these plans. Like there's a very interesting one called ah the New Path to Persia.
Speaker: And in this document, there's just, you know, essentially war gaming as far as like what this might look like. And one of the primary strategies, for example, was ah the Leave it to Bebe strategy, like Leave it to Beaver. yeah So essentially, um we've seen that play out now. So where the the strategy of the Leave it to Bebe strategy is we will let them take the PR fall for attacking Iran. Like this, people like to think, and this gonna be this is very controversial, people say that, oh, Israel controls the United States.
Speaker: um You know, they're the ones calling the shots. But if you really, really look at things and the planning involved here, There's been very early planning by the United States to use them as a scapegoat in order to take the public Yeah, just like the public perception fall for at least 20 plus years now ah probably a lot longer so This is not new it is following a strat strategies that are laid out and wargamed in like many kind of like military think tanks for the last few decades and So i would I would actually highly recommend people read that. Just like in hindsight now, just kind of get an idea of like the fact that this might not all be an accident that the US stumbled into. And whether you think positively or negatively about that, um I think that it will give you a much better mindset and understanding about what is happening right now and how you should react to it if you think the US can be successful at it and what the world might look like after that. So...
Speaker: Very, very interesting take. I just want to ask ah at at the the end here, like, and what do you think about crypto and Bitcoin going going forward, going into the midterms? We had this, like, rate, best-end buying, I think, long-end bonds, but which was very bullish for for Bitcoin, but now we're kind of Not really sure where to go from here. Yeah, I think they're issuing more bills to buy the long end. Basically, they're doing a lot of very interesting stuff at the Treasury these days, while the Fed has taken a back seat, which does somewhat make sense in the regime we're in, which is more of fiscal kind of led regime.
Speaker: As we can somewhat tell, the economy, or at least the sectors that are leading the economy right now, are somewhat rate insensitive. So the Fed actually has very little power, in my opinion, to actually affect the economy. What has larger ability to affect the economy is just industrial policy um and bond issuance. So really the the ball is in the court of the Treasury and the White House at this point. So.
Speaker: um And with that happening, I think that Bitcoin, again, this has been said many times, has the opportunity to switch into this just simply excess bucket for liquidity and mature into an asset that acts as an actual hedge against some of this stuff as opposed to just beta, as opposed to just levered beta. um And I think that comes, yeah, just with time and maturity and people understanding the potential of the asset. One thing that I will say, though, is that it is very likely to be tied to the success of the United States. um
Speaker: Crypto is a United States-led industry. Like, United States citizens, individuals, entities own the majority of just all major tokens, yeah essentially. So that's also one of the reasons why, you know, in some ways, know people questioned why China was always trying to ban it. China was like like more anti-crypto in some ways. Because essentially, you know, if you really want to look at it, it if they're buying an asset that Americans are primary the primary owners of at much lower prices, and essentially every dollar that leaves their country like is expatriated, just essentially enriches Americans.
Speaker: So I will say that if you're bearish on America, you probably should not be bullish on Bitcoin, yeah ah which is probably what not what a lot of people want to hear. But it's not ah it's not a rebellious asset anymore. It's a very institutional asset. it's not a play It's not a play against the system. It's a play for the system. yeah um What I like to say is that if the system didn't work is exactly how it does, Bitcoin would be worth as much as chewed bubble gum.
Speaker: ah The system has to work exactly how it does. money has to depreciate over time and force it into productivity and investment yeah in order for Bitcoin to actually gain value. So, yeah, I think that ah it has the opportunity to mature into a more macro global asset.
Speaker: But for the at least the time being, i would say that, you know don't bet a bet bet against America and for Bitcoin. I don't think that that's a very smart move. yeah I think that was very a very interesting reply. I think we've like ah slowly run out of time here, but um I really enjoyed this. It was like very interesting to to have an IRL conversation. Also, you have very ah controversial but um intelligent takes. So thank you very much for for coming on.
Speaker: Yeah, thank you for having me. id like I feel like I didn't even get to cover you know like half of what i might like to yap about at any given time, but ah you know I'm always yapping on on Twitter, so anybody can just find some of that there. Appreciate it, though.
Speaker: Thank you very much.
