Has This Cycle Peaked? | 1000x

Summary

• Jonah’s top-level call is that this crypto cycle has not peaked, with Bitcoin’s $92K–$98K range representing “wait-and-see mode” rather than an automatic reason to sell. If BTC breaks higher toward $125K or $150K, he expects hot money to “power lift” the leaders already revealed by the market: Hyperliquid, possibly Sui, AI16Z, and Virtuals.
• The macro threat is resurgent CPI, not one strong payrolls report eight days before a regime change in Washington. Avi conceded that NFP might foreshadow inflation but called that “not a given”; Jonah would not sell BTC at $92K on that inference and “wouldn’t touch bonds with a 10-foot pole” under Trump.
• Sui may be a great next-cycle asset, but both hosts reject buying its roughly $50–$52 billion valuation today without a killer application. Its rabid community and developer credibility could survive a crypto winter, making it “another 100 Xer” from bear-market levels; for now, Jonah sees technical advantages without a clear answer to “What’s the actual business case?” Avi’s view of Sui’s technology was secondhand: he had not built on it himself but had heard positive reports from builders.
• Hyperliquid’s exchange alone looks undervalued to Avi at roughly a 12–15 forward multiple, while becoming an L1 gives it the rare advantage of “a baked-in killer app.” Jonah prefers small accumulation now and a large buy after BTC breaks out; Avi is more constructive below $20 and $18 because large wallets that sold around $30 have begun buying back.
• Crypto AI can grow dramatically without today’s largest tokens remaining the winners, because frameworks have much weaker built-in network effects than DeFi. Virtuals ran from about $2.25 to $5.20 and back to $2.70; Avi attributed the decline, as far as he could tell, to competitors and would consider rebidding around $2–$2.30, while Jonah has backed away from his former idea of owning a concentrated top-10 AI basket.
• Both hosts think agents are crypto AI’s clearest route to mainstream utility, but the durable edge comes from domain expertise rather than generic code. “In order to train an agent to be good at something, you need to be good at it”: even the same market input can mean different things in different contexts, so specialists must supply the logic before an agent can become a useful trading sidekick.
• Their token-launch lesson is that preferential allocations can turn influencers into sellers, while organic price discovery creates aligned contributors. Avi described private access at a $1 million valuation before launches at $15–$40 million as “free money” for insiders; 1000X instead launched around a $100,000 market cap with no private round and found developers and branding help through its broader community.

Deep dive

1. Sui is a bear-market watchlist asset, not a $50 billion buy

• Jonah’s best Sui bull case became “the vitriol and the hate.” When he attacked Solana near $20 in 2023, the response generated roughly 700,000 views and showed that people’s livelihoods remained invested in the chain; he became bullish at a $10 token price, though he admitted he “obviously didn’t buy enough.”

• Sui’s reaction was weaker than Solana’s, but still revealed a committed community. A Blockworks survey of Solana developers reportedly found Base and Sui tied far ahead of other alternatives, reinforcing that builders take the technology seriously even if Jonah could not get a straight answer to “Why would buyers of block space prefer this blockchain?”

• Avi’s comparison with Aptos: Sui had the stronger technical team, Aptos better marketing and business development, but “the Sui guys learned how to market” while Aptos failed to convert its early hype into users. Unlike NEAR’s allegedly hollow $800 million ecosystem push, he believes Sui has genuine developer interest and is growing, albeit with no killer app beyond familiar products such as the Suilend borrow-lend protocol. Avi cautioned that he had not built on Sui himself and was relying on secondhand reports from builders.

• The trade still fails on valuation. Sui had reached roughly $52 billion and parity with Avalanche, while Solana was only around $15 billion during Jonah’s 2023 attack despite its larger community; the preferred setup is to wait for a crypto winter, verify that Sui’s builders remain, then accumulate for a possible “another 100 Xer” recovery analogous to Solana’s move from $8 to $200.

2. Hyperliquid already owns the application most L1s spend years seeking

• Avi likes the inversion: Hyperliquid is an application “backing into” an L1, rather than an expensively valued L1 searching for demand. The exchange supplies “a baked-in killer app,” and even a few additional applications could justify a higher valuation when the exchange itself trades at roughly a 12–15 forward multiple.

• Jonah’s unresolved question is what uniquely benefits from Hyperliquid’s latency beyond its exchange. It uses Tendermint and the Cosmos SDK, yet both agreed this creates no meaningful ATOM thesis: Avi called Cosmos “public infrastructure,” valuable to the industry but lacking token utility or leadership capable of capturing Hyperliquid’s success.

• Their entry tactics diverge. Jonah would scale a small conviction position but reserve “a big slug” until BTC exits its range, because HYPE could fall another 50%; Avi sees buyers returning below $20 and $18 after large wallets distributed around $30, with fewer major holders still selling and many investors waiting after missing the first rally.

3. AI market growth will not protect today’s token leaders

• The category’s upside remains large but imprecise: Avi recalled an AI-versus-DeFi market-cap comparison of roughly $10 billion against $50 billion, while Jonah had heard $15 billion against DeFi’s $150 billion peak. Neither had independently calculated the figures, so the shared conclusion was directional—AI may have substantial room—rather than numerical certainty.

• Avi’s key distinction is that DeFi usage strengthens incumbents: more liquidity makes exchanges and lending protocols better, allowing an investor to buy the top 10 as a sector basket. Merely adding users to an AI framework does not necessarily improve it, so “I think AI grows” does not imply that the current top 10 projects will capture that growth.

• Jonah’s pushback preserved an important nuance. Moving between no-code systems can be “as seamless as switching from Uber to Lyft,” but replacing their fully coded Eliza implementation would be “a heroic pain in the ass”; Virtuals also offers its own coded framework, GAME, although the team chose Eliza because its GitHub popularity made experimentation easier.

• The market has already rotated through Bittensor’s TAO, GOAT, Virtuals, and AI16Z rather than compounding one durable leader. Virtuals moved from roughly $2.25 to $5.20 and back near $2.70; Avi attributed the decline, as far as he could tell, to competitors and might rebid at $2–$2.30, while Jonah said, “I used to think that this was gonna be like DeFi,” but now favors small optional positions over large bets.

4. Useful agents require traders to encode what developers do not know

• Jonah sees agents as crypto AI’s best chance to “cross the chasm” because an interactive bot trained on distinctive material is understandable beyond crypto. He remains unsure why every agent needs a token, though he allows that one can function as a form of equity-like progress and traction monitor.

• Avi’s core constraint is expertise: “In order to train an agent to be good at something, you need to be good at it.” Random developers cannot infer which data matter or how to synthesize them; the same input can mean “X in context A and Y in context B,” so the hosts had to encode those distinctions manually.

• Their roadmap starts with a crypto sidekick that judges whether news matters, why, and by how much; then extends into commodities and other markets with outside experts. Longer term, they envision integration into trading terminals, position-aware assistance, and agents for non-trading decisions—while conceding, “I don’t know where this is going.”

5. Preferential token allocations can manufacture sellers, not partners

• Discussing AICC, Avi alleged that Bankless received a large allocation and sold immediately, while stressing that AICC’s founders were not necessarily bad actors. When Jonah said Bankless had launched the token, Avi corrected him: “They did not launch the token. They got an allocation.” Their criticism was of the allocation and sale, not authorship.

• Avi’s broader indictment concerned influencer angel rounds: access at a $1 million valuation can become “free money” when a token launches at $15 million, $20 million, or $40 million. The insider’s edge is the low entry rather than long-term conviction, creating pressure to present belief in the project and sell right away—“that’s what I fucking hate about this industry.”

• The hosts characterized the AICC episode as reputational “self-immolation,” with Avi citing roughly $2 million and Jonah’s rough split-and-tax arithmetic reducing it to perhaps $500,000 each. The numbers were their estimates, but the principle was categorical: monetizing an audience in this way can destroy the trust needed for later projects.

• Their alternative was 1000X’s launch near a $100,000 market cap with no private round or advance allocations, initially undertaken as a joke before becoming serious. Organic discovery produced holders who did not feel used and supplied a developer and branding contributor; Avi added that in “98% of cases,” name-brand KOL investors contribute money and then disappear.

6. CPI, not payrolls, is the macro threat they are watching

• Jonah believes “the market has shown its hand”: while BTC chops between $92K and $98K, HYPE, SUI, AI16Z, and Virtuals grind lower, revealing hot money—these are where people who feel rich are throwing their cash. A BTC move toward $125K or $150K would, in his view, restore the rising tide and provide his preferred moment for larger altcoin exposure.

• Avi called post-NFP alarm “hindsight capital.” The 30-year yield had already moved from roughly 4% to 5% between December 1 and January 1 with little attention; declaring rates a screaming trade only after strong payrolls and a large move meant “by that point…the move is priced.” NFP might signal inflation, but that is not given; CPI is the key data point he said to watch.

• Trump is “likely to be an inflationary president,” Avi argued, given his preference for a hot economy, pressure for rate cuts, tariffs, and reduced illegal labor; that could force a Fed pause or even renewed hikes. Jonah’s conclusion was blunt: selling BTC at $92K eight days before that regime change made little sense; he is bearish on bonds, expects yields higher, and “wouldn’t touch bonds with a 10-foot pole.”