The Market Can't Make Up Its Mind

Summary

• Avi has flipped from bearish to tactically bullish on crypto, and the framework matters more than the call: “fundamentals mean nothing… flows are kind of everything.” The seller side is mostly exhausted — Michael Saylor has “shored up his balance sheet” and doesn’t need to sell at the 58–65 level, and with Bitcoin 50% off the highs there are almost no profit-takers left. The marginal buyer is traders rotating out of the DRAM selloff (DRAM down 7%, Intel down 5% on the day, while Bitcoin held) — he bought that rotation and sees a path to 75–80K.
• The expression matters: Avi thinks Bitcoin isn’t even the best vehicle for the bounce — Hyperliquid, Robinhood, Ethereum, maybe Lighter, and “Zcash especially” are better, ETH because of “what’s happening with Robinhood chain, Arbitrum and all that using Ethereum security,” Zcash because it already has the momentum factor traders chase. The trade: buy ~65, cut below 60, aim for 80–82 where it topped last time.
• Jonah’s layered counter: everything is “meh.” Macro is between the two regimes that matter — Bitcoin “performs very badly in a rate hike cycle” and rates may go up, not down; MVRV-Z near all-time lows confirms selling exhaustion but Saylor remains “one big question mark”; and the Ansem “black bull” token — the best meme launch since Trump, reaching a mid-nine-figure cap after its July 1 launch and 60% off a week later — suggests retail hyper-gambling appetite is low. Verdict: dollar-cost average, “nothing aggressive” — “nothing’s going to move until Saylor’s done or you get a rate cut cycle or you get hyper gambling coming back.” Saylor selling more: “a coin flip.”
• Clarity Act handicapping: Avi thinks it’s unlikely to pass but the market already prices roughly one-in-four odds, so Circle is asymmetric — down less on failure than up on passage. His edge recipe: “spend 4 hours going through each senator and assigning them a probability… this is how edge is generated.” Tokenization proceeds regardless — institutions are only waiting on which of two product structures to build. Jonah is darker on the downside: failure means Biden-era limbo, Uniswap doesn’t rip, and only the “crypto harnesses” — Hood and Coin — let retail investors participate.
• The durable alpha both agree on: mega trends, not short-term trading. Ken Griffin himself says short-term and market-making alpha has been “juiced” (squeezed); the remaining edge is prognosticating 3–5 years out and eating the drawdowns — structurally hard for hedge funds with month-to-month marks, whose investors pull capital at the bottom, defined as “when there’s nobody else left to sell.”
• A tradeable side-thesis: AI-proof assets are being bid — Josh Kushner and Vinod Khosla buying sports teams, Avi’s girlfriend’s $600 1960s dresser now selling for $6,000. Jonah’s frame: own what AI can’t commoditize. Avi’s worry: if people can gamble on furniture and collectibles, crypto’s core gambling value proposition has real competition.
• The career half of the episode is a masterclass in table selection: Goldman anoints its “Illuminati” via rabbis for oratory, politics, and commerciality — the brand is Chanel, not meritocracy; Jonah fell off the track when quant firms crushed oil-options P&L from ~$650M a year to ~$40M and he proved “a sloppy, inexperienced backstabber”; Avi’s GoldenTree crypto desk was up 172% in 2023 — best-performing fund in crypto — and still got axed “because of a tennis match.”

Deep dive

1. Pick the easy table — the entire case for a crypto career

• Avi’s founding logic, stated about himself, not as a dig: he skipped tradfi out of college in 2017 because “table selection is probably the most important thing that you can do… You want to play an easy game.” In banking you slog analyst → associate → VP → MD regardless of talent; in crypto “you kind of just needed to be good enough” because the talent level was low.
• The Jordi/Selini case study cuts both ways. Avi frames crypto market-making as easier than tradfi — no co-location, no institutional firewalls. Jonah, who ran a crypto market-making business then, pushes back: by 2021–22 it was “already almost too late,” with Wintermute, Amber, Alameda, Jane and Citadel entrenched — Jordi had to “thread the needle of starting in a peak bull market and then not immolating on FTX.”
• Jonah’s larger point: many poker players got early to DeFi, CryptoPunks, Bored Apes, “ran it up hard, but they didn’t build institutions, and they’ve also ridden it down.” Crossing from individual producer to entrepreneur is the rare membrane to pass.

2. How Goldman anoints its Illuminati — and how Jonah fell off the track

• The anointed all share three traits, per Jonah: they’re “basically like Barack Obama level orators,” they’re incredible politicians, and they’re hyper-commercial. Careers are shepherded upward by a “rabbi” — a senior sponsor with mutual benefit at stake.
• His key reframe: “Think of Goldman as being a brand like Chanel,” not a scrappy tech shop. People trade with Goldman for the logo, so ascending is less about new revenue than “misrepresentation of brand representation as personal trading acumen.”
• Jonah was the up-and-coming 25-year-old star on the oil book — the beating heart of a firm whose leaders came up through commodities (likely the J. Aron acquisition) — until DRW, Infinium, Optiver, Jane Street, Jump and Citadel automated options and desk P&L collapsed from ~$650 million a year to ~$40 million. “That was just bad luck.”
• The self-inflicted wounds: he dragged his feet on the firm’s ask to move to London and trade more types of options (“drunk from a couple of years of success on just oil”), and he played politics badly — “I was certainly a backstabber, which I regret… however, I was a sloppy, inexperienced backstabber. If you take a shot at the king, you better not miss. And I took some shots and missed.” His exit was another table selection: Vitol and physical optionality, upstream of the quant mafia that ate screen options.

3. GoldenTree’s crypto desk died over a tennis match

• Avi’s crypto division under GoldenTree “was up 172% that year” (2023), “the best performing fund in crypto,” turning $100 million into $200 million more — and it still got axed. “It died because of a tennis match in many ways” — downstream of a personal dispute at a partner offsite, a story he says needs a few more years before he can tell it fully.
• The generalizable lesson: “The bigger the company gets, the easier it is to coast” — excess profit lets people ride relationships instead of competence. Avi’s honest self-assessment on why he stepped away to manage his own capital: the game is keeping subordinates from stabbing you when they’re incentivized to, “and that’s something that I’m not the best at because I’m a little bit too autistic to do that, to be honest.” He managed money for Mike Novogratz for about a year, then went solo.

4. The alpha that’s left: mega trends hedge funds struggle to hold

• The through-line both hosts endorse: Ken Griffin says short-term trading and market-making alpha “has been juiced” — squeezed, commoditized. What remains is prognosticating three to five years out and weathering the volatility — “eat the drawdowns and just wait for your thesis to play out.”
• Why that alpha persists: hedge funds have month-to-month marks, and allocators “operate a lot more on emotion” — a 25% drawdown inside a correct three-year thesis is an existential crisis. Crypto’s heaviest outflows come at the bottom, which Avi defines precisely: “The bottom is when there’s nobody else left to sell” — marked by panic and extremely high volume, not by massive buying.

5. Avi’s flows framework — the sellers are mostly exhausted, “the traders are coming”

• The premise: “Fundamentals mean nothing these days… flows are kind of everything.” Exhibit A: Intel was “cheap” at 140, fell 40%, and trades at 100 — “it’s even cheaper today.” In an asset with no fundamentals, you model who the buyers and sellers are and what triggers each.
• The seller ledger: with Bitcoin 50% off the highs, profit-takers are mostly gone; what remains is shorts, traders — and Michael Saylor, the main concern for a very long time. But Saylor “seems to have shored up his balance sheet” — sold stock, sold Bitcoin, built reserves — and “doesn’t need to sell at these prices.” Net: “there’s not a ton of selling at this 58 to 65 level.”
• The buyer ledger is thinner than it looks: long-term 5-to-10-year allocators are “tapped out” — that pool saturated post-Trump. The marginal buyers are traders and people hedging against inflation or Bitcoin’s current narrative, and traders show up on two triggers: favorable risk-reward, or rotation out of another trade. The tell he acted on: DRAM dumping 7% and Intel 5% while “Bitcoin’s holding steady” — “I bought those assets yesterday, basically, on the memory sell-off when I realized that crypto wasn’t going down.”
• The trade and its expressions: buy ~65, cut below 60, “aim for 80, 82, where we topped out last time” — maybe 75–80K. But Bitcoin isn’t the best vehicle: “Hyperliquid is probably a better expression… Robinhood is probably a better expression… Ethereum is actually a great expression because of what’s happening with Robinhood chain, Arbitrum — using Ethereum security is the bottom line,” maybe Lighter, and “Zcash especially” for its momentum. One caveat he admits: he kind of wants to buy the memory dip too.

6. Jonah’s layer-by-layer rebuttal: everything is meh

• Macro first: “Bitcoin as a macro theme trade is sort of off the table.” It “performs very badly in a rate hike cycle, which would make it a good trade from the short side,” and thrives only in debasement like COVID-era printing — “we’re sort of in between those two extremes.”
• On flows he largely agrees: MVRV-Z, his favorite holder-profitability metric, is near all-time lows — “basically selling’s been exhausted with the exception of one big question mark, Michael Saylor.”
• His froth gauge is the Ansem “black bull” token: “the most exciting launch since Trump,” ripped to a mid-nine-figure market cap after its July 1 launch, “and now it is 60% off the highs literally a week later.” Against 2024’s multi-month meme arcs — fartcoin, GOAT, AI16Z — retail tolerance is “literally a couple weeks of up and down.” Avi jokes: “Is nobody left to hyper gamble in crypto?”
• The verdict, stacked: “Macro is meh. Micro is meh. Stock-to-flow is meh… Nothing’s going to move until Saylor’s done or you get a rate cut cycle or you get hyper gambling coming back.” Probably no rate cuts; froth could stay dead for years. So: “dribble buy a little bit here, like dollar cost average. Nothing aggressive. It’s just not a good trade right now. It’s a good long-term accumulation point.” Saylor puking more: “let’s call it a coin flip.”

7. The AI-proof asset bid — furniture, sports teams, and eBay arbitrage

• Avi’s anecdote, as told: his girlfriend bought a 1960s space-age green designer dresser for $600 a few years ago; it now sells for $6,000. “That is an insane statement” — and it makes him nervous about crypto: “if people are able to gamble on physical items and furniture… the long-term nature of crypto is in danger, because it is gambling at the end of the day. And that’s what makes it valuable.”
• Jonah’s interjection: “That’s an AI trade.” Josh Kushner and Vinod Khosla (the Seattle Seahawks) are buying sports teams because “anything human that AI can’t displace, anything nostalgia or cultural-zeitgeist related, will rip in the age of AI” — own what can’t be commoditized when knowledge and software are.
• The half-serious trade: if you believe DRAM prices rise, “go and stash refurbished hardware somewhere and resell it on eBay” — Jonah says the room behind Avi “could fit 50 million bucks worth of MacBook Airs.” Physical-goods flipping, per Jonah, is “an easy poker table with no sharps at it.”

8. Clarity Act: trade the event resolving, not the outcome

• Avi’s handicap: the bill is held up by ethics fights, with Elizabeth Warren “injecting all these ridiculous asks”; Trump plans to meet the Senate, deadline sometime in August (he cites August 7th but wants to double-check). Passage is “pretty unlikely” — but the market already prices “one in four,” so Circle “probably goes down less than if Clarity is passed because it goes up.” The edge recipe: “Spend 4 hours going through each senator and assigning them a probability… this is how edge is generated.”
• His deeper point: the outcome matters less than resolution. Institutions have two product designs — one for passage, one for failure — “and they’re waiting for Clarity to be over to pick which direction to go.” Avi expects an explosion in tokenization and growth in stablecoins either way; Robinhood forges ahead regardless, and with Uniswap integrated into Robinhood, “post-Clarity, actually maybe Uniswap’s supposed to go up” because Robinhood will move forward anyway.
• Jonah’s pushback — worth keeping: failure means “a period of limbo similar to what we saw before Donald Trump got elected,” the malaise of Warren’s Biden-era campaign. “I wouldn’t expect Uniswap to rip once Clarity gets voted down.” Retail can’t play Fidelity/Schwab/JPMorgan tokenization directly — only through a few “crypto harnesses, like Hood and Coin… pun intended.” Without a “Cambrian explosion of opportunities to connect what’s on chain and what’s off chain,” there’s no investment thesis.

9. What crypto was supposed to be — and Zcash at $5,000

• Avi’s confession: Trump launching his meme coin “is one of the reasons that I started to get out of crypto… the president of the United States was able to effectively use crypto as a tool for enrichment for himself… it felt like the final twist of a knife into an industry that I once loved.” They discuss how it made crypto toxic for him; Jonah says Trump “had a good plan.”
• What Avi still wants: permissionless, non-sovereign money in everyone’s pocket. Bitcoin became an investable asset — good, but de-anonymized long ago. “Zcash is the Swiss bank account in your pocket and there’s actually kind of huge implications there.” The condition: “we got to drain the shielded pool to make sure that there’s not an infinite amount of supply in there because of the bug” — then “I think we could see $5,000 Zcash in the next 10 years.”
• Jonah’s version: kill the gatekeepers. Borrowing his old boss Don Wilson’s truism — “markets solve problems” — but CME, ICE, Nymex extract rent through barriers to entry. He wants tokenized commodities: “a market for rice where the Bolivian rice farmers trade with the Indonesian rice farmers,” on-chain weather derivatives for the local ice-cream shop. “It feels like we’ve been tantalizingly close for 5 years” — the catch being the same rails “are also really good rails for facilitating grift and crime and extraction and dollar sign Trump.”
• Both close on the builder’s paradox: it’s the best time to build — regulatory risk is lower and “now it’s like you and Claude code can build something really valuable” — yet “people seem to be experimenting less these days. Come on, where are the inventors? Get after it.”