Can Rate Cuts Save Crypto’s Bull Market?

Summary

• The core call: sit through the chop and sell higher. Avi’s read of Jackson Hole is that Powell’s “shockingly dovish” speech marks a policy stance shift as consequential as the 2022 hiking cycle, in reverse — “rate cuts are massively bullish. Jackson Hole was massively bullish.” He thinks Powell is a lagging indicator, “three or four cuts behind the curve,” and if the Fed cuts a full percent over six months, “there is no amount of cryptonative capital that can front-run the inflows into Bitcoin” from trillions parked in T-bills. Despite visible froth, “I don’t think it’s the time to get cute and try to pair positions.”
• Levels: ETH at 4,500 is “no man’s land.” The 5% one-hour down candle after ETH tagged 5,000 tells Jonah “there’s a lot of supply up there”; he’d rebuy around 4,100, and Bitcoin between 102 and 108. Neither expects a 25-30% drawdown here — “the top’s going to come when we get a selloff and everyone has been trying to buy the dip,” not when a 10% dip has everyone calling it over.
• Avi’s counter-frame on macro: only phase shifts matter. “None of it matters except for the week-to-week moves” — cut timing is noise; what moves markets is a true reversal like November 2021’s “inflation isn’t transitory.” Crypto also has idiosyncratic flows: his partner at his old firm, a genuinely good TradFi macro trader, found macro views “more often than not unhelpful” in crypto, because DATs can bid crypto up while NASDAQ bleeds.
• Two underpriced bullish catalysts from Jonah: “I think the end of the Ukraine war is underpriced” — energy prices crash, delivering a deflationary shock that forces the Fed to “cut fast” — and Trump juicing the economy into the midterms for his legacy: “a rip-roaring Q4, Q1, Q2-ish time frame.” He also concedes his 20-year-grind thesis may be wrong and this may be “another four to five year cycle,” with classic end-of-cycle signs: FOMO entrants and OGs “blasting out of their coins in disgust.”
• Locked-Solana DATs are exit liquidity — Avi, unbothered by the backlash to his Threadguy comments (“I don’t work for anybody. I’m too rich to care”), says vehicles built to take locked Solana and “announce a $500 million raise and dump this on retail” are scams; the honest variant forces a one-to-one cash match. But he was pitched a DAT as a TradFi “sister business” doing profit-accretive things a crypto project legally can’t — the new token foundations, running on regulatory arbitrage. And if Solana pumps to 250, “that is going to be the short of the century.”
• Solana has lost the PR war to Base. Avi says it’s pigeonholed as the memecoin chain while Base “has somehow managed to feel more legitimate” — and unlike slow, clunky old ETH, “Base is just as fast as Solana for all intents and purposes. It’s a formidable competitor this time.” Neither host can articulate Solana’s current strategy; they want Anatoly back on to explain it.
• The DePIN post-mortem: Helium never built the sink. Avi’s confession — “I believed in you, Helium” — resolves to a mechanism: Helium printed tokens forever and never implemented the promised token sink, while Hyperliquid “pulled it off correctly” because its token was effectively equity bought back with revenue. Jonah’s addition: real-world networks need the stakeholder crypto lacks — VCs pumping tens of billions to dominate a market before “turning up the heat on the frog,” so even with perfect tokenomics Helium “still wouldn’t work.”

Deep dive

1. Jackson Hole was the regime shift — don’t get cute, ride it

• Avi’s macro frame, stated as the episode’s thesis: Powell’s “shockingly dovish” Jackson Hole speech is a policy stance shift akin to 2022’s hiking pivot, in reverse — the one that “nuked crypto” now running the other way. Powell “has been very behind the curve for most of his tenure… I think of him as kind of a lagging indicator,” and by Avi’s count is “three or four cuts behind.”
• The sizing logic: if the Fed cuts a full percent in six months, “there is no amount of cryptonative capital that can front-run the inflows into Bitcoin… there’s just trillions sitting in T-bills waiting to get deployed into Bitcoin and SPY and everything else that’s risky.” Everyone gets richer “for every basis point that the Fed cuts.”
• The positioning conclusion, despite froth and top signals he openly sees: “I don’t think it’s the time to get cute and try to pair positions. I think you probably want to just sit and ride the volatility and deal with it for a while — and sell at higher prices.” Jonah’s humility caveat: rates traders are “the nerdiest MIT physics people” who go “50,000 levels deeper” — “I always feel like such a tourist,” so his only edge is zooming out and treating rates “like a commodity cycle: are interest rates trending up, down, or sideways.”

2. Avi’s counter-frame: the Fed only matters at phase shifts

• Avi goes further than agreement — he’s now in the camp that “none of it f*ing matters except for the week-to-week moves.” Whether the Fed cuts this month or in three is “just a timing question,” and timing questions don’t alter the market’s course. What matters is a true phase shift: “inflation is transitory” flipping in November 2021 to “we’re going to have to reverse a policy of 40 years.” A rapid cut because the economy is weakening would actually spook markets, not lift them.
• His usable taxonomy for listeners: macro is good for exactly three things — trading the day or week around a mispriced event, a multi-year thesis, or betting on “massive inflection points in the macroeconomic order.” “I’m never going to say I can use macro to figure out whether we’re going to 150 or 75 first.”
• The evidence from experience: his old partner, 16 years in TradFi and “by all accounts a very good macro trader,” found macro opinions “more often than not actually unhelpful” in crypto — because crypto has idiosyncratic flows. NASDAQ can bleed 2-3% while DATs keep raising, “and crypto’s going up.”

3. Levels: 4,500 ETH is no man’s land, and the whale doesn’t matter

• Jonah was “caught off guard by how quickly we rejected after making an all-time high on ETH”: “if you see a 5% in an hour down candle after hitting an all-time high… there’s a lot of supply up there.” So: “I’m not buying 4,500. I’d probably rebuy 41. This is kind of no man’s land.” Bitcoin is likewise adrift; he’d rebuy “between 102 and 108,” and doesn’t see a 25-30% pullback “given how quickly everyone is to turn bearish.” The tell for the real top: “it’s going to come when we get a selloff and everyone has been trying to buy the dip” — not when a 10% dip has people declaring it over.
• Avi’s dismissal of the weekend’s whale panic is a general principle: one-off flows aren’t tradeable — “unless you can front-run it or preposition for it, there’s no trade before the flow hits, and after it hits, it’s over.” Programs like miner selling getting halved or producer selling distorting the forward curve matter; one-offs don’t. “It’s utterly irrelevant what this whale did… the market can resume doing what it was doing before, which is sending.”
• The victory lap, earned: at ETH 3,800 “everyone gave us s*, and then it went up 30%-32%.” The likely Aerodrome call at $0.28 ran ~30%, LINK worked, Aerodrome “was f*ing phenomenal” — a 2x — and the standing instruction across three straight episodes was to pitch out into strength: “up 20%, up 50%, up 100%, you need to be taking profits.”

4. The catalysts nobody’s pricing — and the cycle question

• Jonah’s most contrarian call: “I think the end of the Ukraine war is underpriced. I really do.” Energy is a huge inflation component; peace crashes energy prices, delivering a deflationary shock where “the Fed will have no choice but to cut, like, fast” — “a super bullish catalyst that isn’t really talked about enough.”
• The second: Trump “is going to go juice the macroeconomy into the midterms” — tariffs going better than expected, lower rates, deregulation — “a rip-roaring Q4, Q1, Q2-ish time frame. He has a lot of power… that’s what he wants for his legacy.”
• A genuine change of mind, flagged as such: the end-of-cycle texture — “people are getting excited, FOMOing in, new participant bases joining, OGs with billions of dollars blasting out of their coins in disgust” — “does not speak to my original idea that this was going to be a 20-year upward grind the way the tech market was post boom-crash. This may actually be another four-to-five-year cycle. I don’t know.”

5. DATs: exit-liquidity scams, with creative variants

• Avi, on the blowback from his Threadguy comments: “I literally just don’t give a f*. I don’t work for anybody. I’m too rich to care.” His charge: locked-Solana DATs use retail as “exit liquidity” for tokens the insiders can’t sell for one to three years — “give us your locked tokens and we’ll announce a $500 million raise and then go dump this s* on retail.” The non-scammy version forces a one-to-one cash match to buy new Solana, doubling exposure in exchange for early liquidity. On the Galaxy/Jump/Multicoin $1B Solana treasury raise itself, the hosts are ambivalent — “they’ll probably get it” — but Avi’s warning stands: if Solana “pumped to like 250, that is going to be the short of the century.”
• The steelman that moved both hosts: one of Avi’s favorite projects pitched a DAT as a TradFi sister business — “permanent capital” of locked tokens inside a corporate structure that does profit-accretive things the crypto project legally can’t (market making, financial products) instead of paying Jump “some usurious fee.” Jonah’s verdict: “one size may not fit all… I like the idea.” Jonah’s synthesis: DATs are “just the new foundations” — regulatory arbitrage — but if they persist, “they’re going to have to chase themselves down the risk curve,” making riskier products until it breaks.
• Jonah’s taxonomy of graduation, worth keeping verbatim: “Some scams graduate… look at Scientology — that scam hit escape velocity. I’m not saying MicroStrategy won’t become the next Scientology. Bitcoin certainly has become the next Scientology.” Both still love Saylor: “he’s just so good at his job.” The closing sour note: ESB’s (likely SBET) $1.5B stock buyback to fight its NAV discount — “they’ve been contracted to buy coin, not their own stock. The Ponzi-ish level of these things is just mind-blowing.”

6. Solana lost the PR war to Base

• Avi’s disappointment is with branding, not fundamentals: Solana has “pigeonholed themselves as the memecoin chain,” failing to convert memecoin activity into applications, while “Base has somehow managed to feel more legitimate — hey, we’re a real chain, but also have memecoins.”
• Jonah’s structural point: Solana’s earlier fight was easy because ETH “was just slow and clunky and terrible to use” — “Base is just as fast as Solana for all intents and purposes… a formidable competitor this time.” Neither host can name Solana’s current strategy — “I am a little bit lost, and that’s unfortunate” — and they want Anatoly back on the show to answer it.

7. The DePIN autopsy: Helium never built the sink, Hyperliquid did

• Avi’s set piece — keeling over on the subway at a Helium ad, last words “I believed in you, Helium” — lands on a real mechanism: Helium “was just printing its token forever and ever to reward people that thought one day the token might go up,” repeatedly promised a token sink, “and they actually never implemented anything.” He owns the miss twice over: “I was very, very wrong about DePIN” (Jonah, by contrast: “I’ve been wrong a lot, but not on that one. That one I nailed”).
• The fix exists — Hyperliquid “pulled it off correctly”: a massive airdrop of what was effectively equity, bought back with real revenue. Avi still believes some DePIN project will copy that structure; the catch is “not printing a ridiculous amount of HNT relative to the amount you’re buying back.”
• Jonah’s addition, via his old Cumberland analyst’s “decentralized Uber — Duber” thought experiment: the model forgets its most important stakeholder — “the coalition of VCs who pump in tens of billions to scale the network and cut out all competition until you can slowly turn up the heat on the frog… now they’re paying 50 bucks to go 16 blocks in New York City.” Uber lost billions for 15 years first; Hyperliquid only worked because exchanges “scale so fast.” So even absent the tokenomics failure, Helium “still wouldn’t work.” The tangent’s kicker question stands: “have any crypto founders ever made anything as wonderful as Google Maps? What are we doing here, guys?”