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Which Crypto Narratives We're Focused On, PLUS - Is Crypto A Major Political Issue Now?
166 Plays5 months ago
In this week's episode, we discuss the upcoming narratives in the crypto space where we think there are the most opportunities over the coming months. Plus, we dig into the growing feeling that crypto is becoming a major theme in the upcoming US presidential election.
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Transcript
Excitement and Implications of Upcoming ETH ETF
00:00:12
Speaker
Hello and welcome to the Decrypting Crypto Podcast. It's May 30th, 2024, and this is Off Chain, your weekly recap of the biggest stories in the crypto space. I'm Matthew Housebarbie, and as always, I'm back with my trusty Austin Knight. How you doing, Austin? Doing well, Matt. It's good to be back. Hey, we've got an ETH ETF.
00:00:33
Speaker
It's exciting. It's beautiful. It's really beautiful. Well, we've kind of got an ETF. We've got the promise of the ETF. That's true. I think it sounds like July is when we're going to probably go live with this.
SEC's Surprise Decision on ETH ETF
00:00:49
Speaker
And I'm pumped about this, to be honest. Does this mean?
00:00:53
Speaker
that the SEC is basically conceding that ETH is not a security in and of itself. Exactly. I mean, that is quite literally what this is saying, right? And I think that is what has surprised a lot of us considering all of the other ongoing legal disputes that are happening in tandem with this. This is a
00:01:18
Speaker
A complete 180 really. I know I was saying for the majority of this year, I really have high conviction that ECTF would be approved. I'll be the first to admit in the past month, my conviction waned on that massive list. I was really, I was as surprised as anything. So it feels somewhat of a hollow victory in all honesty that does, but I'm delighted that we've got that.
00:01:45
Speaker
I mean, it was a big surprise, I think, across the entire
Impact of Dropping Staking Language in ETFs
00:01:50
Speaker
space. You know what was something that I thought was super interesting is that apparently several of the ETH ETF issuers also dropped some language from their applications about staking. So I believe that the SEC, as we've covered many times on this podcast, they've really kind of
00:02:08
Speaker
gone after staking as basically being like an illegally unregistered security scheme, right? I think that's their angle. It's interesting with the staking piece though, because I think that, you know, we talked a little bit about this. I've flip-flopped a little bit around on the staking one because, you know, when we talked about the ECTF episode near the start of the year,
00:02:34
Speaker
I think one of the things that I said at the time, I was like, wow, something that could be really exciting is a staked ETH ETF. And I think from an institutional perspective, super exciting, right? And actually, I think it shows because I think a couple of ETH ETFs
00:02:54
Speaker
issuers or applicants pulled out when they found out. I think Wisdom Tree may have been one of them. They pulled out when staking was basically off the table. But there's another element to this. So it's like, okay, institutions are going to love that yield bearing commodity. That's really exciting. But then when you really think about this, it's like, okay, well,
00:03:19
Speaker
If staking is off the table for the ETFs, what it actually means is all of that ETH that is going to be acquired by Fidelity, BlackRock, etc. on behalf of their clients, it can't be staked.
00:03:35
Speaker
So what that means is it's going to have to be held in custody and it can't be staked, which means the percentage of ETH that's staked will decrease quite a lot, which means the total rewards that are paid out for validators will increase on a per-validator basis because there's less to be shared out.
00:03:57
Speaker
So there could be like an interest in dynamics, especially as we've been trending down and staking rewards quite aggressively. This could be a nice like little boom for like security and also.
00:04:08
Speaker
You know, how do we feel about the secure, the lion's share of the security of each being black rock? Yeah. Right. So, so there's that piece as well that we've got to consider.
Celebrity Involvement in Crypto: Bull Market Indicators?
00:04:20
Speaker
I think the real major news that everyone's excited about right now, I'm not sure if you followed this, is that Caitlyn Jenner has released her own token. Are we entering this bull market mania?
00:04:37
Speaker
And I just don't realize it? It's the first real sign. Strap in, folks. Oh, yeah. Soldier boy is on it. I just hope this isn't the top signal that none of us have been waiting for. I'm just waiting to hear from Ja Rule, personally. What the hell is Ja Rule? That's what we really need.
00:04:58
Speaker
All right, well, we've got a few things we're going to be digging into today. And one of them, I want us to chat through some of the, what I think are really exciting narratives to keep an eye on from buying opportunities, areas where I think there's going to be a lot of hype, especially as we kind of seem to be in this like consolidation period right now.
Crypto Growth Predictions and Q3 Rate Cuts
00:05:22
Speaker
And then we're going to dig into
00:05:24
Speaker
topic that we have really missed talking about for the longest time, and that is our wonderful old friends at FTX. All right, let's jump straight in.
00:05:44
Speaker
So the market is shaping up nicely. We've talked a little bit about the EFTF that is imminent.
ETH ETF's Market Impact Compared to BTC ETF
00:05:52
Speaker
And we're seeing kind of, I think we're going to see pretty strong growth across a lot of different areas of crypto in the next few months. We're in the summertime lull where we're all waiting for macro to make its mind up as to whether we're going to start seeing rate cuts sooner or later.
00:06:12
Speaker
But I think even the furthest out estimates that I've seen really, it would be December, I think we're going to see a Q3 rate cut. But we'll see how inflation plays out. But either way.
00:06:25
Speaker
I think there's a lot of exciting opportunities. So I thought I would just begin by running through a few of my favorite plays right now and quick disclaimer, not financial advice. I'm just talking more broadly about where I think there's going to be interesting opportunities to explore right now. So.
00:06:47
Speaker
This year so far has really been all about Bitcoin, right? And that has dominated things. It's actually been a pretty solid winning strategy to just hold Bitcoin since, you know, what, October of last year. You'll have done and outperformed most things outside of maybe meme coins, which have also had that fair share of wins along with Solana.
00:07:12
Speaker
But I think the first area right now is ETH. I think it's really hard to fade the upcoming ETH ETF volume that we're going to see. As I mentioned earlier, I think ETFs probably go live around July, maybe latest August.
00:07:32
Speaker
If they even tap into a fraction of the volume that the BTC ETFs did, then it's going to push ETH to huge heights, especially when you consider the supply constraints that ETH has. I just think there's going to be a lot of exciting action around that.
ETH's Potential to Outperform Other Investments
00:07:53
Speaker
And that, as we kind of learned with Bitcoin, is not priced in. I really don't believe that. Do I believe that the ETF announcement was yes, same with like Bitcoin halving, stuff that we know is going to happen, but the volume we saw from BTC when those ETFs went live and we kind of drained out a bit of the grayscale outflows was nothing short of monumental, which I think we've talked a little bit about here. So I think that's an exciting space. And if you want to keep things simple.
00:08:23
Speaker
I think over the next few months, not many things will outperform spot ETH on a risk reward kind of adjusted basis, right? Do you think that we're going to see that same type of volume influx into ETH ETFs though? I mean, personally, yeah, I just can't imagine it being anything but a fraction of the level of volume that we saw for BTC, partially because that was just flat out unprecedented in terms of ETF volume.
00:08:49
Speaker
but also just the brand value of Bitcoin compared to ETH is almost incomparable. I think there's a few ways you could look at this, right? I agree with you. I think the volume on an absolute basis is not going to be close to BTC. That said, BTC inflows into the ETFs have
00:09:11
Speaker
persisted at just being consistently strong inflows. Even over the past two weeks of sideways action, we've just seen huge amounts of inflows into the BTC ETF, which shows there is a consistent appetite for exposure to crypto. And I think the ETH ETF
00:09:35
Speaker
If it was a staked ETF, I think there'd be mania around it. And actually, I'd be sitting here saying, I think that there is going to be volumes at the level of BTC. Without that, it's, I think, probably more just increasing your crypto exposure. I imagine most investors looking at this will say, hey, it's almost like a basket of exposure where you've got BTC and ETH.
00:10:01
Speaker
At the same time, when you're looking at where could there be the most short-term to medium-term upside, BTC or ETH, you're probably looking at ETH and saying, hey, there's a lot of upside to be had here. And I don't think you can underestimate the appetite that will come, especially from institutional investors, for ETH as a whole there. So I agree with your take, but I think irrespective, it's going to drive a lot of demand in here.
00:10:31
Speaker
Yeah, no doubt about it. Well, I think so then that brings on to the second kind
Opportunities in Restaking and Airdrops
00:10:37
Speaker
of narrative that we've had our first wave of mania start really around March, which is restaking. And I think if spot ethos, you're like,
00:10:50
Speaker
simple low risk play. I think restaking and the whole ecosystem is where you can start to increase your risk exposure, but also increase your potential upside. I think this is like the airdrop plus yield plays.
00:11:07
Speaker
So, several liquid restaking tokens haven't dropped their token yet. So, for example, well, we saw Ethified drop their token, I think in March. We've still got the likes of Puffer and many more who haven't launched a token yet, but with
00:11:22
Speaker
one, $2 billion plus in TVL. Many of the existing ones are going into their second season of points where airdrops are a possibility. And they're all performing pretty well. I think that EtherFi token is probably the benchmark right now. And what we have at the end of September
Upcoming Eigen Token Launch
00:11:45
Speaker
is the Eigen token becoming liquid. We talked a lot about this, right? It's non-transferable right now. I think it's the end of September. September 30th is when they plan to make it transferable and we start to see trading on the Eigen token.
00:12:01
Speaker
For me, that's going to just be euphoria. And LRT tokens, like the ones I just mentioned, these liquid restaking tokens, are probably going to see new highs, new levels of interest. We'll see many, many more of them launch. And there's just going to be a huge injection of capital that comes in the form of these air drops to the tune of like billion plus dollars.
00:12:26
Speaker
So I think that's going to be a good place to just play some bets, especially if you're just keeping it simple and staking ETH on some of these liquidry staking protocols or directly with eigenlayer. And then there are a few other projects that are like adjacent. So you've got things like circuit, mitosis. There are two projects where there's kind of additional opportunities, I think, for airdrops where we start to get into layers here. You've got
00:12:54
Speaker
eigenlayer and depositing eth into eigenlayer or a validator into eigenlayer. Then you've got one layer down, or one layer on top, which is a liquid restaking protocol. You can deposit eth into ethify or puffer or whatever, and that gives you exposure to their points and eigen. And then you've got a layer on top of that, which is like the likes of zircuit and mitosis, where
00:13:18
Speaker
you can deposit your liquid restaking tokens into their protocol and
Karac's Competitive Edge Over Eigenlayer
00:13:23
Speaker
you're going to get additional yield from them, points from those, and your existing liquid restaking points and your Eigen points. And the same goes for projects like Karak, which is going to be another huge competitor to Eigenlayer, has its own points program worth kind of checking out. And I think
00:13:43
Speaker
the differentiator between Eigenlayer and Kerac is that Kerac allows the deposit of multiple different tokens. So you can actually deposit things like USDC in there as opposed to just Vanilla ETH and or Liquid Restaking. So all of these come with pretty attractive points programs and so far they're working out pretty well and you've got all the upcoming
00:14:10
Speaker
AVS airdrops and incentives once slashing goes like an eigenlayer and even just delegating your eigenlayer stake to certain operators like
00:14:21
Speaker
What is it called? Eigen yields, they're offering their own points program. It's like points mania right now. And I think you just got to figure out like the more layers you add here, the more risk you take on. But I do think there's real pockets of value where the risk reward is, is in much more favor of reward in these positive market conditions. So I think that's like the second piece that I'm really excited about. And.
00:14:50
Speaker
The third piece, which is kind of like a mixture of the prior two, which is actual yield on eth. And I talked a bit about Pendle previously. It is just such a great place to get a fixed yield on your eth, or at least your liquid restaking kind of eth. For example, e-eth from ethify, or I don't know, puff-eth from puffer.
00:15:16
Speaker
The play here is if you're just saying, Hey, you know, I'm not so interested in the, the point side of things. What I care more about is earning more yield on my eth. Well, they have a lot of their PT, eth trades that you can make. So the principal token, eth trades, where right now you're getting around about a 25% APY on your, on your eth, which is.
00:15:41
Speaker
pretty attractive as far as ETH goes. So good places for ETH yield right now with the demand that's coming in for it.
00:15:52
Speaker
The next one that is on the other end of the spectrum is stablecoins. If you have stablecoins right now, there are so many great places to park them that are really low risk and have really attractive yields.
Stablecoin APY Opportunities in Current Market
00:16:10
Speaker
And just to be clear, I'm talking about the major stablecoins. We're not going to lunar territory here.
00:16:17
Speaker
So I think as market conditions pick up, the demand for leverage picks up, which means supplying and lending on classic lending and borrowing markets like Aave. The APY is very, very attractive. I think a few weeks back, USDC lending on Aave was as high as 16% APY, which is phenomenal for USDC. I think I checked earlier today. It was like 7.6%.
00:16:47
Speaker
on Ethereum layer one. What you'll also find is if you bridge your stablecoins like USDC or Teva, usually the best ones to work on here, into an Ethereum layer two, you'll find even better. So I think USDC on Arbitrum right now is yielding 11% APY. Great place to park some USDC.
00:17:09
Speaker
Then kind of getting out of like the lending and borrowing markets, like the DeFi ones, there is Maple Finance, which is a real world asset and private credit platform. Really good. I love it. It's a bit more institutionally focused. So you need to KYC, et cetera.
00:17:28
Speaker
They're launching their new protocol called Syrup, and it's going to be offering a projected 15% APY on USDC lending, plus some additional incentives in their own tokens, but 15% is pretty attractive in itself.
00:17:46
Speaker
And the yield comes from they're a private credit fund. So they're offering private credit to major crypto institutions in exchange for you lending out your USDC to them in a fund with a lockup of six months.
Meme Coins Post ETH ETF: Gaining Attention?
00:18:01
Speaker
So pretty attractive. And then we get into our favorite area, Austin, meme coins. The safest. I thought you'd never.
00:18:14
Speaker
I had to take a low risk option here for everyone out there that's happy with degenning on stablecoins. So I don't think we're anywhere near done on meme coins. And I'll caveat all this with I tend not to play in this space. I'm not a good enough kind of trader, day trader in particular, on this stuff and you have to be all over it.
00:18:43
Speaker
I think the mages on Ith and Sol, so the Pepe, Bonk, Wyff, Wyff in particular probably, Turbo, etc. They're all very likely to see another wave of attention post Ith ETF.
00:19:01
Speaker
I think we will see more from the GEO Boden and the MAGA tokens in the next month or so with the US elections coming up. We'll see what happens post-election with those meme coins, but I think they probably have a nice run. And finally, you know, where I have played a little bit is in runes. I still think runes are a great bet. And I wrote out, I did some like,
00:19:29
Speaker
analysis here yesterday and today I've seen this been a real big run on on runes actually and I think they uh the total combined market cap for runes just passed 1.5 billion and it was like under a billion a couple of days ago so it's on a on a real tear I think the the thesis here is that
00:19:47
Speaker
You've got Bitcoin layer twos, which is going to be feeding-friendly a little later in the year. It's going to bring more attention. We're going to have more decentralized exchanges, central exchanges, listing runes. And I saw that there was a Donald Trump rune that got minted out yesterday and is now on a huge tab. But a lot of the majors on runes are likely to see a lot of appreciation as they have this week in particular. But I think that's going to continue.
00:20:17
Speaker
And finally, Bitcoin layer twos. I've been talking a lot about this, especially on Twitter and on a few other podcasts, but Q3 is going to be a big quarter for Bitcoin layer twos. That's when I know a lot of TGEs are going live.
00:20:33
Speaker
and I think more points programs, more air drops, and I think you just have to keep an eye on this space.
Profit-Taking Strategies for Q3 and Q4
00:20:44
Speaker
There's loads of exciting projects, Botanic, Citria, Babylon, loads, loads in all honesty. So lots to be excited about in the space, but I think those are my key areas depending on where your risk tolerance is. And I think really we start to see
00:21:02
Speaker
probably a good period of like a bit of profit taking in some of these areas in Q3, Q4, and then kind of reload for next year. Where will you be throwing your money outside of Caitlyn Jenner's tokens, Austin? Oh man, I'm full in on the Pepe tokens, man.
00:21:25
Speaker
He's been making new highs. You love to see it. I particularly like that I have this rule where I don't go all in on meme coins and try to avoid them. And one of the reasons why I really hate this is because every now and then I break my rule.
00:21:46
Speaker
And then I, and last year I was like, okay, November. It's like, I feel like with.
00:21:55
Speaker
Pepe's going to have round two at some point. I'm going to buy up a few of these. I just don't have the, it's such a mental drain for me that I just have to be like, I need to just get out of these coins because it's killing me mentally. I'm checking it every hour, looking at individual wicks. I'm just like, well, this is destroying my life. So then I sell out of these things like I have. And then I get to like now and I just do the math.
00:22:18
Speaker
And I look back at what I sold and I go, OK, well, I just set cash on fire. Wonderful. And then I go, never do that again. I can't wait to get wrapped up in this next wave and, you know, just relive it all. Oh, yeah. Oh, yeah. Mainly downs on my side. So well, why don't we speaking of being down? Why don't we jump into our next story of the day with the wonderful world of FTX?
Ryan Salame's Sentence for Campaign Finance Violations
00:22:51
Speaker
Ryan Salame, the former FTX exec, the second man in charge, one might say, has been sentenced to seven and a half years in prison. Now, that may sound like a small sentence compared to SPF's 25 years, but you may recall Salame struck a plea deal right before the SPF trial began, and he ended up pleading guilty
00:23:17
Speaker
to violating campaign finance law and to operating an unlicensed money transfer business. So they went a little bit easier on him, but actually not as easy as was expected. His lawyers were aiming for 18 months only and the government requested five to seven years and they max that out with seven and a half years in prison. So they clearly didn't like him.
00:23:42
Speaker
Yeah, especially considering like he immediately kind of like went into that plea deal. He'd been supporting the prosecutors like this. This is like true karma rug pull on him. I think, you know, this is beautiful from what I was reading the
00:24:07
Speaker
the prosecution and the government was saying he actually wasn't that much of a help. He didn't testify against SPF. He didn't supply much useful information. And obviously there were many other informants, including Caroline Ellison. It'll be interesting to see where she lands in all of this comparatively. And these folks testified. They went on the stand and testified against SPF. And basically the general message was that Ryan's contribution was pretty mid, I think.
00:24:37
Speaker
Yeah. And also, I think that his legal team failed to mount a very compelling defense. They were saying that he was unaware and that he was deceived by SPF, but he was caught moving $5 million out of FTX as it was collapsing and all kinds of sketchy stuff like that that indicated he was actually pretty well aware of what was going on.
00:25:01
Speaker
Obviously, both he and SPF were involved in all of this sort of political donations and all of that stuff that was illegal, actually. And so, yeah, seven and a half years. But there is good news for Ryan. He's getting to keep his Porsche, Matt. Thank goodness. He can drive that round from cell to cell and visit all of his new friends every morning. Wonderful.
00:25:31
Speaker
And he can do it with a zero to 60 time. That's less than three seconds. So he's going to be getting from one end of the prison to the other pretty quickly there. It's he's going to be first in the lunch here. I'll tell you that. Yeah, I was actually surprised to hear it's a 2021 Turbo S.
00:25:46
Speaker
Uh, it's not a Lambo. Um, and, uh, yeah, the government, tough times, you know, in the world of the, um, the government, this, I thought this was so interesting. The government said it quote, did not have sufficient equity to further pursue forfeiture of the Porsche. Now this, if you're not familiar with Porsches.
00:26:10
Speaker
Um, a turbo S is a pretty expensive car. This one had an MSRP of $285,000, but I very much doubt that he paid that. I mean, back in.
00:26:20
Speaker
2021, 2022, even now they're going for massive overages at the dealers, like 50 to a hundred K over. Um, so maybe that's what it was. Like, I don't know if he had maybe even had like some negative equity in it or something like that. He probably, he probably did. Right. That's probably leveraged up on Luna tokens. And, uh, and, and now, you know, it's just not worth it.
00:26:43
Speaker
Yeah. Now, so for those listening that are car enthusiasts, I would say that the real downfall of Ryan Salami goes back to the fact that he bought a Turbo S
00:26:57
Speaker
instead of the gentleman's Porsche, which we all know is a GT3 Touring. And perhaps he would have kept away from crime and been a real gentleman if he had bought the right Porsche. He'd have probably got the 18 months, I think. They would have said, well, you know, he did steal millions of dollars from innocent people, but he drove a GT3 Touring, which is the mark of a gentleman. Yeah, spectacular choice.
00:27:22
Speaker
You know, I think that points to his character, mainly. And we're going to just reduce the sentence as a result. Yeah. Well, there you go, Ryan. Bad car choice. And that's, that's what you got to blame here. That's what it gets you now. Just imagine if he had a Lambo, what the sentence would have been. He probably would have got those 25 years that SPF.
00:27:40
Speaker
Yeah, well, I think yeah, those that sentence would have went to the moon, so to speak, I imagine. Anyway, yeah, so justice continues to be served in the FTX case, we're getting some serious prison sentences here, obviously, more to comes, but
00:27:56
Speaker
Yeah, Ryan and SPF down, spending some time in prison.
US Regulations Deter Bitcoin Purchases: Poll Results
00:28:01
Speaker
Okay, moving on from that, there was another interesting story that I wanted to talk about, which was a new poll that came out from grayscale that found that unclear regulations in the US are the top deterrent to Americans buying Bitcoin.
00:28:18
Speaker
Um, so yeah, I, I know. I mean, you would, you would definitely expect that like institutionally, right? But to get that on an individual consumer level, I thought was quite interesting. Um, we've done, we've actually done a fair bit of kind of obviously like consumer survey studies at Kraken, right? And.
00:28:38
Speaker
While it never comes out on top, it is always mentioned in this, and it's kind of like the future uncertainty is something that comes up quite a bit. So this doesn't surprise me a huge amount in fairness. Yeah, yeah. I mean, definitely with all of the whiplash that's been happening with
00:28:59
Speaker
regulation through enforcement and everything like that. I mean, some of this stuff does make it to the mainstream news, right? So anyway, Grayscale released this report and what it's doing is just looking at the crypto landscape going into the US presidential election. I found it kind of interesting. They're basically trying to say that crypto has become
00:29:19
Speaker
an election issue. I don't personally completely buy that, to be honest, but, you know, I mean, maybe it's maybe it is an issue, but I wouldn't put it in the top, certainly not in the top five, maybe not even in the top 10. We've got some problems here.
00:29:34
Speaker
Well, I think this is interesting because I saw a few tweets, right, where prior to the ETH ETF, people were saying like, hey, you know, like Trump started to talk a little bit about crypto. I think he mentioned the geo-boden meme and he's like,
00:29:53
Speaker
Yeah, so valued, don't want to buy it, which I just thought was just excellent and very on form. But, you know, it started to be disgusting. I started seeing like on X, like lots of people saying like, oh, it's becoming like, like last year. My initial reaction was just like,
00:30:11
Speaker
This is not even on the radar of so many people. And then the Eve ETF happened. And I think the consensus right now is that it has become a political issue. Now, how high of an issue, right? But it seemed to come from the Biden administration that I think Genzel had to buckle on this.
00:30:37
Speaker
And we are now all of a sudden seeing a lot more discussion about crypto, in particular from Trump, of course, where I think he's playing up to his usual tricks of acting like the savior that I'm not so sure he really is. I think he'll probably say anything to get elected. But, you know, that's my own personal take. But and like, you know, he I don't know if you saw he he said that he would
00:31:06
Speaker
he would actually pardon Ross Ulbrich. Let's just remove whether we think that's amazing or not, whatever.
00:31:19
Speaker
categorically that's pandering to voters. That is a clear demonstration. I don't really believe that Trump feels strongly about it. But whether the outcome is good or not, separate thing, which I think it is good. But it's becoming politicized in ways that I don't think it ever has before, would that be fair to say?
00:31:42
Speaker
I think that's true. And I think that the Biden administration forced that to happen. You know, if there weren't such horrendous, you know, regulatory and legal and enforcement actions taken by this SEC, but even it's like even broader than this SEC, just a generally hostile environment.
Political Significance of Crypto with Trump and Biden
00:32:05
Speaker
I don't think that this would have been an issue and I think that Trump is recognizing that and that's why he's taking this crypto-friendly stance. I also think that it is a bit of a perfect storm because we're in a very economically volatile environment right now, despite the fact that
00:32:25
Speaker
the Biden administration tries to say that we have a positive jobs report. There's a lot of data that's hidden in the jobs report that gets corrected in a footnote a couple of weeks later that says, actually, job growth didn't happen. What it is is that we have more people with full-time jobs taking part-time jobs as supplementary income. And we're calling that job growth. And that's just a lie, really, that's happening. You mean to tell me that they're spinning a narrative on data?
00:32:52
Speaker
I don't buy it, Austin. Yeah. And then something that I thought was interesting, Matt, is there's just a lot of weird things happening in the economy in general. One thing happens, and then you would expect another thing to happen, and it doesn't. Like a lack of correlation. Lack of correlation, yeah. And that is kind of disconcerting. Rates go up, and then a housing crash doesn't happen.
00:33:21
Speaker
Right. I mean, obviously, housing values have gone down, especially in certain markets, but not to the degree that they should, respective to the rate hikes that we've had. Another thing that's interesting is that it doesn't look like all of the money has poured into gold, which you would typically see in an inflationary environment. And obviously, you know, gold
00:33:43
Speaker
has continued to appreciate, but not to the degree that you would expect with the level of inflation that we've seen. And so it's like, where is the sort of risk off asset? And it's interesting, if you look at the crypto market cap, definitely the Bitcoin market cap, it seems to indicate that a lot of that money may have gone into crypto, which will force this as an issue
00:34:08
Speaker
in the election, right? I think we can't understate how much of an influence that is playing when you have major, like, the financial titans of the traditional finance world that power funding across, not just, but the US economy.
00:34:24
Speaker
now are some of the largest holders of Bitcoin. And we'll continue down this path with ETH, probably Sol and others that will come after in the ETFs. Its growing influence is enormous. And I agree with your point around the wider market. Stuff's just out of whack. And I think that
00:34:44
Speaker
the typical correlation like inverse and correlative effects that are happening between different asset classes are just everything's out of whack with a lot of like even just bond yields where we're largely baiting on like every single word that's coming from Powell and just what he's saying in his speeches that are then changing the bets and direction look at what's happening in the stock market right it's like basically the stock market is just please save us Nvidia
00:35:12
Speaker
And then you have kind of the commodities market and there's just crazy like supply chain breakdowns across things like cocoa market, which is just, if you haven't been paying attention to the cocoa market, this is super random, but like, go have a look at the past 12 months. It's absolutely insane. Similar to last year with orange juice futures and just like some of the random stuff that's happening in these like commodity markets. Now copper is on an absolute tear, right? All of this combined is just like, don't ask me why.
00:35:42
Speaker
I dig so deep. I cannot. I mean, this is why I come here every week to talk to you, Matt is to hear about orange juice feature. These are these are often the moments when my wife just walks out of the room. So yeah, at least you can't walk out of the room right now, Austin. That's that's a good thing. But yeah, so I think you know what we're saying here is
00:36:11
Speaker
Things are volatile, things are unpredictable, and they're changing day to day. Sentiment is all over the place, but if there is one thing that has happened since the start of this year, it's that crypto has an enormously growing influence on the wider traditional financial industry and now the political industry. To what degree is up for debate, but it has grown significantly in ways that I don't think either of us thought that it would even just this time last year.
00:36:38
Speaker
I think you're right, and I think it's a safe bet that that influence will increase over time rather than decrease. And that's what's showing up in the data from this new poll. It found that 44% of US voters who don't own crypto say that they are waiting on additional policies and or regulation before buying in. So that's the big barrier. It also found that 41% of respondents said they're now paying attention to Bitcoin
00:37:06
Speaker
and other cryptocurrencies because of geopolitical tensions, inflation, and a weakening US dollar. Now, what's interesting about this is that that's up from 34% six months prior. So that's rapid growth in a time where inflation seems to have set in.
00:37:29
Speaker
Geopolitical tensions obviously are, you know, ramping up and all over the place. The weakening of the US dollar seems to have also kind of set in. So I would have expected that number, like honestly, to have kind of leveled off. The fact that it's ramping up again indicates that this is an election issue. And then finally, 62% of millennial and Gen Z voters, aka the future,
00:37:57
Speaker
of either of these parties said that crypto is the future of finance. So maybe that's also part of it, right? You're seeing younger people becoming more active in elections. This election looks like it's going to be somewhat driven by younger people. And I know that
00:38:21
Speaker
There have been like really interesting demographic shifts between the parties, especially among younger people. Like I think that Trump right now is pulling with the highest black and minority vote among young people in history or in recorded history for the Republican party. And that like the majority of the minority vote that typically goes to the Democrat party, it's all
00:38:45
Speaker
Older folks just what it is right now. Yeah, and those same people also are saying that they care a lot about crypto So it's interesting, you know, I think that again, I don't think it's like a top ten issue You know, I just can't believe that but I do think that the importance of crypto is increasing I think especially as there is just general sort of global unrest and uncertainty whether it be in financial markets or related to war
00:39:16
Speaker
Um, that crypto is increasingly becoming the place where people, especially young people want to put their money. Um, so it'll be interesting, really interesting to see just how this plays out over the course of the next couple months. And, uh, I mean, I would just like, man, I would fricking fall over if there were a reference to crypto and one of the debates.
00:39:37
Speaker
It would be amazing, wouldn't it? And that is what's going to be most interesting to see. And I think if we really start to see that happen, and it's just outside of the campaign trail,
00:39:51
Speaker
Then I think we start to say, maybe this is a top 10 issue, right? Or at least it's going to be made and framed that way. But I agree with you today. I think that it is being politicized. We'll see how it plays out. And hopefully it's a net positive. We'll see how that plays a role.
00:40:13
Speaker
Good to dig into this. We dug into a bunch here. We've unpacked a lot. We'll see how the markets play out over the next few weeks. I think there's a lot of excitement as things start to shape up, even going into the summertime. So certainly won't be a shortage of drama on the election side of things as well. All right, Austin, I'll see you next week. Talk to you then, Matt.
00:40:52
Speaker
The contents of the Decrypting Crypto podcast should not be used and are not intended as investment advice. Please do your own due diligence before making any investment, cryptocurrency or otherwise.