Buy The Dip Or Sell The Rip? | Felix Jauvin

Summary

• The episode’s core short-term call, opened by Jonah and echoed by Avi: “There’s a theta decay to the bearishness.” Every bearish argument has been public for two-to-three weeks, many who sold are waiting to rebuy a dip, and each day it doesn’t come the current price looks better — the guy with a 70K limit watches Bitcoin trade to 75, back to 80, pulls his limit, and buys. Jonah: “Totally agree.” Avi is “chipping in a little bit more” every day.
• Jonah’s Trump roadmap says the administration is watching a “cushion” — stocks can fall “another 20% from here maximum, probably 10%, before these guys start to panic” and cut rates, then QE. The sequence: tariffs and tough talk now, Ukraine ceasefire tanks commodities, inflation falls, rates are cut, then more aggression, then a fiscal-monetary pump. “Feel safe buying risk assets on another dip from here.”
• Felix’s pushback: the cushion is thinner than expected. Consumption from people earning over $250K is at its highest share in 30 years, making the stock market more important for US growth than at any point in three decades — a slide could take “25-30% down” and months to wash out even after a U-turn. And the VIX has been above 20 consistently and risen for four straight weeks, the first time ex-COVID in ~15 years.
• The bifurcation trade: institutional flows going from 0 to 10 to 20 basis points buy Bitcoin only — “they’re not going to be buying your shitcoins.” Alts face ~$32bn of unlocks this year against roughly the same amount of alt capital, Felix calls the market “saturated” with the Trump coin as peak, and “the gambling era is over.” ETH, down 20% since the election, is “a truly doomed asset.”
• On the Europe rotation: Felix sees a huge rotational wipe — Germany’s ~$500bn fiscal turn, likely Rheinmetall +200% since Trump’s election, and a Danish MP’s warning that “once you experience volatility, you can’t put all of your eggs in that basket again.” Avi takes the other side: defense is a sector play, but “would I buy the DAX, the CAC, the Footsie? Hell no” — he thinks the EU breaks up in 10-20 years, and in that multipolar world Bitcoin is the “dark horse candidate for an alternative reserve currency.”
• What actually drives BTC, per Felix: China, Japan, and the US — Europe’s session has the least liquidity and no consistent flows. Strong Chinese stocks are bearish for Bitcoin, a weaker yen bullish; right now the signals conflict (“I have absolutely no clue”), but if China rolls over, US stocks firm, and the yen stays flat, “I’m getting balls long BTC.”
• Positioning for no man’s land, via Jonah’s Lehman mentor: “Sometimes the right trade is just to do nothing.” Run 60-80% of the book in your medium-term views, keep the rest dry powder — 10% higher you lighten, 10% lower you buy “with both hands.” One tactical from Felix: fading Bitcoin when Trump starts speaking at Bitcoin-related events has been “a 100% hit rate to short.”

Deep dive

1. Institutions stay bullish

• Recorded live on the Digital Asset Summit floor, the episode opens on a paradox Felix pins with a viral tweet from Blockworks co-founder Mikeo (as heard, “Mikeo”): “I’ve never seen the institutions more bullish than the natives.” At their panel, they asked the audience to raise hands if they’d sold core holdings since the post-election pop, producing “like five people” — basically nobody.
• Felix’s explanation is portfolio composition: attendees are 50-80% Bitcoin with a five-year thesis and still up; the despairing Twitter cohort holds “80% random altcoins that have marketed themselves very well.” ETH is down 20% since the election — “that is a truly doomed asset right there.”
• Felix’s read: the retail implosion was “entirely self-correcting… a self-cleansing moment” with the Trump coin marking the top of the idea, while banks winning the ability to properly custody crypto pulls in longer-horizon allocators. “It feels like our industry is growing up — and that’s going to make a lot of crypto OGs a bit sad, probably, and that’s okay.”

2. Alt markets are saturated

• Jonah’s flows model for the next 6-24 months: institutions upping allocations “from zero to 10 basis points, and 10 to 20” buy Bitcoin, not “your shitcoins.” His supply-side example is likely DePIN, “a sector I hate” — operators get paid in tokens they must sell into a tapped-out retail bid, so “outflows from all these other tokens seem kind of limitless.”
• Felix’s word of the year is “saturated”: alts were lottery tickets, the Trump launch was “peak saturation” — everyone willing to gamble is already in — while new issuance, including a likely Berachain L1 launch with Monad coming, keeps diffusing capital. “The gambling era is over, in my personal opinion.” The alt 2.0 structure requires coins you can hold on a five-year thesis because they “generate a lot of cash [and] pass it back to holders.”
• Avi supplies the arithmetic: ~$32bn of unlocks hitting alts this year against roughly the same amount of alt capital. Even liquid funds “don’t want to get in front of that train” — most existing alts face “continued bleed as people try to get out.”

3. Jonah’s Trump roadmap: talk tough, watch the cushion, then U-turn

• The mandate first: “You don’t elect a tariff man if you don’t want tariffs.” Trump is shifting taxation from income toward consumption and GDP contribution from government to private industry — two “game changers” markets were always going to choke on. With likely Scott Bessent, “a real markets genius,” in his ear, the administration monitors a cushion: stocks can fall “another 20% from here maximum, probably 10%, before these guys start to panic” and cut rates, with QE behind that.
• The sequence: shove tariffs through now while cushion is ample; a Ukraine ceasefire tanks commodities and lowers inflation, letting rates be cut and rebuilding cushion; then get “more bellicose with Iran,” push tariffs harder, fire government workers; then soften and “pump the gas” with fiscal and monetary. The conclusion: “I think you should feel safe buying risk assets on another dip from here.”
• The political backstop: “no politician, especially not Trump, is elected with a mandate to tank the economy” — a 2025 recession hands the Democrats, currently “a headless chicken” with nothing, a unifying issue and a 2026 blue wave. Jonah’s rider: every president gets roughly a year to blame the predecessor, so the pain window is now — “we’re only two months into the Trump presidency.”

4. The cushion is thinner

• Post-2022 inflation left consumption from people earning over $250,000 at its highest share of the economy in 30 years — so “the stock market is actually more important today than it has been at any point in the last 30 years” for US growth. If Trump believes he has room and stocks slide, consumption crashes with them, and even an immediate U-turn takes “a month or two and potentially 25-30% down” before it washes out.
• The vol market is already behaving strangely: the VIX has been above 20 and risen four weeks straight — ex-COVID, the first time in roughly 15 years. “Normally the VIX spikes really hard and reverts — it’s actually been trending, which is kind of weird.”
• Jonah’s reframe, gesturing at the institutions on the expo floor: “Bear markets are only bad if you’re planning on selling. If you’re looking to go from zero basis points to 10, bear markets are awesome.”

5. Europe: genie out of the bottle, or a sector trade inside a doomed index?

• Felix reads the ~10% US equity correction as “a huge rotational wipe that also looks macro-driven”: everyone came into 2025 long Mag 7, then Germany announced a ~$500bn fiscal package — “unleashing deficits for the first time in decades” — yields soared, the euro went higher, and an unhedged European allocator could be down 17% (10% on NASDAQ plus 7% on currency) while the DAX outperformed the Q’s. Capital is going home.
• His evidence it continues: the move is led by defense (likely Rheinmetall up ~200% since Trump’s election, BAE Systems “up a ton”), and a Danish conservative MP who once pushed the F-35 purchase now says it “can no longer continue” — because “once you experience volatility, you can’t put all of your eggs in that basket again,” even if Democrats win in 2028 and Republicans in 2032. “The genie’s out of the bottle.”
• Avi’s counter is a “nothing burger take”: European defense is a fine sector play, “but would I buy the DAX, the CAC, the Footsie? Hell no.” Over-taxation, a culture that “just works less,” and immigration politics past “the event horizon” mean the EU — “a peace project” — “is going to break up in 10 to 20 years.” Parking a portfolio there is “dancing between the raindrops.”
• The kicker both sides accept: Trump-driven volatility is setting the table for a multipolar world of US, China, Russia, and European spheres — and “the only asset that can really perforate those hemispheres is Bitcoin,” a “dark horse candidate for an alternative reserve currency.” Already: “any currency that’s not in the G20, Bitcoin is already better than holding that currency. There’s no debate.”

6. What actually sets Bitcoin’s price — and right now, “no clue”

• Jonah’s sharpest question: if Europe and China run big fiscal impulses while the US retrenches, which wins for Bitcoin — global liquidity or the QQQ correlation? Felix starts by demoting Europe entirely: across sessions, the EU time zone “almost categorically has the least amount of liquidity” and never shows consistent directional flow. The drivers are China, Japan, and the US.
• The levers: a strong Chinese stock market is “neutral to bad” for BTC, because Chinese buyers historically pushed money into Bitcoin to outperform a stagnant local market; a strengthening yen is bad, a weakening yen good. Today the signals conflict — “my answer to you right now is I have absolutely no clue” — but the trigger is explicit: “if the Chinese stock market starts going down, the US stock market goes up a little bit, and the yen is flat, I’m getting balls long BTC.”

7. The playbook: no man’s land, theta decay, and the Castanza rule

• Jonah reaches for his Lehman mentor Jeff Saki (a credit trader, now at Citadel): “You don’t always have to be 10 out of 10. Sometimes the right trade is just to do nothing.” His map: this is no man’s land — 10% higher you lighten up, 10% lower “you’re supposed to be buying with both hands” — so express medium-term views with 60-80% of the portfolio and keep the rest dry powder. When vol is high “every move means less”: witness FOMC day surging and giving it all back.
• Felix flags one tactical observation: Bitcoin rallying into any Trump crypto appearance has been “a 100% hit rate to short” the minute he starts speaking. Jonah saw the same as an oil trader in 2018-20 — $10 face-ripping rallies from $25 oil on OPEC tweets. “Never have I seen a public figure move markets like Donald Trump.”
• Avi’s core call, seconded by Jonah: “there’s a theta decay to the bearishness.” Every bearish reason has been public for two-to-three weeks, everyone who sold is waiting for a dip, and the holder of a 70K limit who watches it trade to 75 and back to 80 historically pulls the limit and just buys. “Every day I’m chipping in a little bit more.”
• His discipline for doing that is the “Castanza rule”: “On days when Bitcoin is up, you sell it. On days when Bitcoin is down, you buy it” — pure warfare against your own emotions (“if I wake up and think, am I going to miss the rally? — I immediately sell”). Jonah’s confession cuts the other way: he chopped himself up enough to quit any horizon under a week. “It’s not something you can dabble in.”