Latest / CRYPTO 101 / Ep. 753 Crypto Is Entering a Token Picker’s Bull Market with Austin Barack

Transcript

Ep. 753 Crypto Is Entering a Token Picker’s Bull Market with Austin Barack · CRYPTO 101

0:08
[SPEAKER_02]: Alright everybody, welcome back to the Crypto 101 podcast, I'm your co-host Bryce.
0:14
[SPEAKER_02]: I always joined by my good buddy Brendan, how are you doing man?
0:17
[SPEAKER_01]: I am doing great, glad to be here.
0:19
[SPEAKER_02]: Awesome.
0:20
[SPEAKER_02]: I mean, I am so excited.
0:21
[SPEAKER_02]: We've got a great guest today.
0:23
[SPEAKER_02]: Friend of the show, repeat guest.
0:25
[SPEAKER_02]: But somebody who is very in demand right now with his market views, market outlook, and a big announcement of a new chapter in Mr. Austin, Barack's life.
0:38
[SPEAKER_02]: So Austin is now the CIO of the Rockaway Ex Liquid Opportunities Fund.
0:43
[SPEAKER_02]: And we're bringing him in today to talk about.
0:46
[SPEAKER_02]: liquid opportunities in the market and outlook for the rest of the years.
0:50
[SPEAKER_02]: So, Austin, how are you doing?
0:51
[SPEAKER_00]: Hey, Russ, doing well.
0:53
[SPEAKER_00]: Hey, Brendan.
0:54
[SPEAKER_00]: Yeah.
0:54
[SPEAKER_00]: It's been a very, very interesting last couple of months.
0:57
[SPEAKER_00]: I'm sure we'll talk about this more in depth, but it's looking clear or increasingly clear to me that markets have bottomed, so lots of opportunities.
1:07
[SPEAKER_02]: Yeah, absolutely.
1:08
[SPEAKER_02]: I think a lot of people listening right there, like, whoa, hold the phone, put the coffee down, drop the kids off.
1:12
[SPEAKER_02]: What did you just say?
1:13
[SPEAKER_02]: The market bottom is officially in.
1:16
[SPEAKER_02]: How do you even think about determining that?
1:18
[SPEAKER_02]: How do you kind of rationalize around that being a possibility?
1:23
[SPEAKER_00]: Yeah, so a couple of things, one we'd started to see evidence earlier in the year when bad news wasn't necessarily causing markets to sell off, which meant that there was already seller fatigue and most of the folks that were shorter-term holders or potential sellers had exited the market.
1:42
[SPEAKER_00]: We saw the initial cell off from the microstrategy Bitcoin selling and when we moved down from high 70s to low 60s high 50s which also we hit some key support levels on a technical basis for Bitcoin in those holes and then
2:01
[SPEAKER_00]: what we've seen is the rest of the market equities start to cool off a little bit.
2:05
[SPEAKER_00]: Still strong, and I think the AI trade is not necessarily going anywhere, but then Bitcoin and broader crypto starts to react as we would expect to react, and that was that initial move from like 6465K up to where we are now.
2:21
[SPEAKER_00]: when the treasury announced that they're doing a form of QE.
2:24
[SPEAKER_00]: You know, they didn't necessarily phrase it that way, but purchasing long bonds to bring down yields, which, you know, Bitcoin is traditionally active like a macro asset.
2:34
[SPEAKER_00]: And then you have all these other regulatory tailwinds along with the fact that if you're a four-year cycle believer, which, you know, there's a mix of folks, but it has an impact on flows.
2:45
[SPEAKER_00]: That would line up with October.
2:47
[SPEAKER_00]: And, you know, people look to frontrun that
2:52
[SPEAKER_02]: Yeah, absolutely.
2:53
[SPEAKER_02]: Four-year cycles, some technicals, and vibes.
2:58
[SPEAKER_02]: It seems like the vibes are back risk on a couple of our bodies are, you know, that we work with are deep meme coin trenches, digends.
3:08
[SPEAKER_02]: They're showing me coins that are going up a hundred X.
3:11
[SPEAKER_02]: already on the meme coin side, you know, you know, Brennan and I kind of operate more on the defy side RWAs, you know, some of the AI stuff, but the meme coins are firing, and that tends to be a good signal that risk is coming back into the market.
3:25
[SPEAKER_02]: What else can you look at or point to that shows you, you know, crypto, you know, risk appetite is really coming back on the table, not only for the DGNs, but for institutions and the folks that really could move the money.
3:37
[SPEAKER_00]: Yeah, so a couple of things, even before we be majors, bottomed out, and over the summer time, you saw what is usually the tail end of a bare cycle where you start to see out performance from individual assets with strong fundamentals.
3:52
[SPEAKER_00]: We saw that back in, you know,
3:55
[SPEAKER_00]: 22, 23 period, GIMX being an example of something that actually traded really well within the GFI complex.
4:02
[SPEAKER_00]: This time around Venice was a strong performer, hyper liquid was a strong performer, ZCash, you know, a couple others.
4:11
[SPEAKER_00]: And that shows that there is risk appetite for the right sorts of assets.
4:15
[SPEAKER_00]: And then over time.
4:18
[SPEAKER_00]: It becomes a little bit more broad-based where people are willing to bid things that have a fundamental backing, but are not necessarily like only the cream of the crop, and that's where you see more risk flows.
4:30
[SPEAKER_00]: So that's when it began earlier in the year.
4:34
[SPEAKER_00]: Right now, we're seeing other signals so related to the on-chain stuff.
4:38
[SPEAKER_00]: You can see it in pumps revenue.
4:40
[SPEAKER_00]: It's since pulled back a little bit because of all the activity on Robinhood chain and the meme stock pairings, which have, you know, diverted some attention.
4:49
[SPEAKER_00]: But that went from 300,000 of buybacks a day to well over a million of buybacks, the revenue tripling.
4:56
[SPEAKER_00]: We saw, that's for pumped out fun.
4:59
[SPEAKER_00]: That's pumped out fun.
5:00
[SPEAKER_00]: And then also,
5:03
[SPEAKER_00]: You know, continued growth and hip three markets.
5:05
[SPEAKER_00]: So the fundamental thesis of crypto, which is bringing markets to 24-7 environment and bringing settlement down to zero.
5:17
[SPEAKER_00]: So it's like the two main parts or three main parts may be that people have been talking about for a really long time are,
5:23
[SPEAKER_00]: money, payments, and financial assets.
5:28
[SPEAKER_00]: And all of those are kind of happening simultaneously.
5:32
[SPEAKER_00]: So, and those are the things that are being bid.
5:34
[SPEAKER_00]: So, those are some of the signals for me.
5:36
[SPEAKER_00]: And then the last piece is what are the assets that are most
5:44
[SPEAKER_00]: The traditional allocators are most comfortable allocating to from either a familiar familiarity story or a fundamental story.
5:51
[SPEAKER_00]: So, you know, of course, hyper-liquid is on that list, but just looking at the performance of things like Uniswap and Link that have been around for a while that traditional allocators have had a lot of time to get comfortable with and seeing strong performance there.
6:05
[SPEAKER_01]: know, one of the things that I noticed with a lot of the picks that you just mentioned is the tokenomics structure, whether it be buybacks, whether it be burns, whether it be profit sharing.
6:16
[SPEAKER_01]: You've seen a shift in in tokenomics of a lot of projects.
6:21
[SPEAKER_01]: where it is more focused upon providing a better incentive or value to the token holder.
6:27
[SPEAKER_01]: And I think all four of those are great examples.
6:30
[SPEAKER_01]: And I don't think it's a coincidence that you see uni swap going parabolic.
6:33
[SPEAKER_01]: And you've seen pump and hyperliquid at all time highs, for example, and the list goes on, do you see that becoming like a new necessity, or at least a new favorable,
6:44
[SPEAKER_01]: piece for traders and investors because it kind of feels as if those tokens that are offering buybacks or incentives or burns or profit sharing or something like that, those really feel like they're the ones benefiting and running here.
6:58
[SPEAKER_01]: Is that just like inside my head or is like that's something that you see investors and traders are like truly valuing?
7:04
[SPEAKER_00]: No, I think that's absolutely right and hyper liquid is one of the best examples of that.
7:09
[SPEAKER_00]: I think
7:10
[SPEAKER_00]: There are people who are conflating a distinction that is important to separate where if you return value to token holders, the token would do well.
7:20
[SPEAKER_00]: That's not the case.
7:21
[SPEAKER_00]: There's lots of great, there's lots of protocols with great tokenomics.
7:25
[SPEAKER_00]: You also need to be growing quickly and have strong, durable business underneath.
7:30
[SPEAKER_02]: So, like, more full founder kind of pointed that out the other day.
7:34
[SPEAKER_02]: He's like, yeah, we're not doing buybacks yet.
7:35
[SPEAKER_02]: Like, we think the return on capitals can be better if we, you know, just invest in the business and don't, you know, sort of buy back the tokens.
7:43
[SPEAKER_00]: Yeah, and more folks are great example.
7:45
[SPEAKER_00]: It's like, well, they're not doing buybacks, but all the values going to the token, so investors feel comfortable there.
7:50
[SPEAKER_00]: And the business is doing really well, where there are some protocols that are doing buybacks, but the business isn't doing well, and those haven't traded well.
7:58
[SPEAKER_00]: But yeah, I would say we're,
8:01
[SPEAKER_00]: only moving more in that direction, and I think that's accelerating.
8:04
[SPEAKER_00]: A lot of investors in crypto have invested more in equities over the last two years than they had previously, and I think it was a little bit of a refreshing respite to invest in a stock and not have to worry about like, oh, but what if the stock doesn't get the value from being what generated?
8:24
[SPEAKER_00]: It's like,
8:28
[SPEAKER_00]: You know, there's not a lot of appetite for the risk that comes with not knowing where value is going to go.
8:35
[SPEAKER_00]: So yeah, that will only continue.
8:38
[SPEAKER_02]: Yeah, it's pretty crazy that, you know, some crypto tokens are becoming more equity like, you know, it's like, I think crypto originally, you know, kind of throughout any, you know, trad-fi stuff, they're like, oh, we're gonna completely reinvent things and like, you know, fast forward here we are today.
8:55
[SPEAKER_02]: They're like, well, the last few hundred years of capital markets might have some useful stuff.
9:01
[SPEAKER_02]: Why do we add back that to these crypto tokens and
9:05
[SPEAKER_02]: You know, I've even seen some tokens, namely centrifuges, the main one that I've seen recently say we're going to transition our token to an actual equity.
9:15
[SPEAKER_02]: It's going to be, you know,
9:17
[SPEAKER_02]: You know, I don't even know, like it's more than a tokenized equity or is it what would that entail?
9:22
[SPEAKER_02]: I mean, like coming full circle, like actually having a token turn into an equity, and is that a broader trend or is that just a one-off?
9:31
[SPEAKER_02]: What do you think about that?
9:32
[SPEAKER_00]: So I don't know if we're going to actually see that many examples of becoming specifically equities as they are defined today.
9:41
[SPEAKER_00]: I think a big part of some of these innovation exemptions and
9:45
[SPEAKER_00]: You know, the essence of cardiac, whether it goes through in the form of the cardiac or in a bunch of smaller things is to give tokens the ability to more explicitly deliver value to token holders and to your point on learning from the lessons of the past.
10:01
[SPEAKER_00]: That's happening across the board in terms of not needing to reinvent the wheel, but it's also important to like think about how tokens are unique.
10:08
[SPEAKER_00]: So, you know, let's say there was something that's similar to, you know, protocol that's, you know, let's use Apple as a comp.
10:17
[SPEAKER_00]: when you buy the, you know, Apple duo that was just announced today, the, the fold-up.
10:25
[SPEAKER_00]: Apple wants to incentivize people and if you're an early buyer, they give you shares of Apple stock as a reward.
10:32
[SPEAKER_00]: That's really hard to do if it's not tokenized and especially if it's just not a token in general, but that's something that you can easily do as far as giving
10:41
[SPEAKER_00]: stakeholders ownership in the protocol by rewarding them with tokens, and that's been over emphasized in farming context in crypto.
10:52
[SPEAKER_00]: But I think you can have equity plus where it's the value-capture and rights of equity, but do all of these novel things around customer acquisition, and even on the fun side, learning from the lessons of the past, and most liquid funds over the
11:07
[SPEAKER_00]: liquid venture with long holding periods and long biased for a very long time and now you know this is you know what I'm doing at Rockaway X is running a long short portfolio which is how all equity hedge funds run for the most part and that's you know in my opinion where things are headed in the appropriate way to manage risk and you know manage of
11:33
[SPEAKER_01]: Well, you know, earlier we are just talking about the cycles in general and one of the things that I've noticed is that it feels like the bull market behaves differently in every cycle, right?
11:45
[SPEAKER_01]: And so looking forward, you know, if we think that we're shifting gears into that into that next bull market and every bull market feels different from the previous ones, what do you think changes this cycle?
11:58
[SPEAKER_01]: And how should we approach it?
11:59
[SPEAKER_00]: Yeah, I think it starts to look a lot more like the stock market.
12:02
[SPEAKER_00]: I think
12:05
[SPEAKER_00]: you potentially have a general trend higher if the economy is doing well.
12:09
[SPEAKER_00]: So let's call that like the microcrypto economy.
12:12
[SPEAKER_00]: And this is when the NASDAQ and SAP does well, but not everything does.
12:15
[SPEAKER_00]: You have particular areas that do better, whether it's memory stocks re-rating because there's some fundamental innovation or increased demand.
12:25
[SPEAKER_00]: And then maybe that plays out in terms of like, more demand within define the defy sector does really well.
12:30
[SPEAKER_00]: the rest of the market is just trading water or, you know, moving slightly higher.
12:35
[SPEAKER_00]: And then you see those rotations to whichever sector has the strongest fundamentals and the best narrative and momentum at that time.
12:43
[SPEAKER_00]: But yeah, I don't think it looks.
12:46
[SPEAKER_00]: That's similar to 2017 or 2021 or 2024.
12:50
[SPEAKER_00]: This is going to be much more of a token picker's market than everything go up together, which is a good thing.
12:59
[SPEAKER_00]: And also, I think makes the job of an investor a little bit easier if you know that the things that should go up are probably the things that will go up.
13:10
[SPEAKER_02]: Well, I think that's the question everybody's asking, of course, there's no financial advice or anything.
13:15
[SPEAKER_02]: Everything's educational on your own personal views, but what are some of those tokens that have really caught your eye?
13:22
[SPEAKER_02]: I know one of the twins we've talked about with you before has been Venice, which is very aptly in the news this past week here with some rumblings about OpenAI's
13:34
[SPEAKER_02]: privacy breaches and you know Venice gapped higher on the news because you know you can't have All these privacy breaches if you have private inference So I know VVV is one that's been top-mind, but what else is kind of out there?
13:47
[SPEAKER_02]: That's kind of peeking your interest these days.
13:50
[SPEAKER_00]: Yeah, so it's a very interested in Venice And I think they're really just scratching the surface of their adjustable market
13:57
[SPEAKER_00]: This is pretty consensus at this point, but I think hyper, like we're still going a lot higher.
14:03
[SPEAKER_00]: It's shown that it's the clear market leader, durable market share.
14:08
[SPEAKER_00]: really having over the last couple of months since January, a polymarket moment of sorts where it's reaching mainstream in terms of an understanding of something that's novel and new that's coming from crypto, which is the fact that you have price discovery outside of traditional market hours, especially Trump likes to do things on weekends.
14:28
[SPEAKER_00]: So that means that you see oil moving or XYZ.
14:32
[SPEAKER_00]: You have pre-IPO markets.
14:36
[SPEAKER_00]: a meaningful way that over the last couple of months IPOs have been priced and we have the Anthropic IPO coming up in the next couple of months and that should see a lot of volume.
14:45
[SPEAKER_00]: Zikaash is really interesting.
14:47
[SPEAKER_00]: It feels like it's hitting a critical mass in terms of its community consensus around being a
14:59
[SPEAKER_00]: similar but different type of Bitcoin as a store of value asset that includes privacy and people making those comparisons and in my mind it looks a lot like the March April May period of 2017 when Bitcoin first passed 1,000 and
15:16
[SPEAKER_00]: you know, I know Zika's just went from 20 to 1000 and you know, don't want to necessarily push our luck, but in that arch April, May period, Zika and went from 1000 to 3000 really quickly.
15:29
[SPEAKER_00]: So I don't think a move like that is off the table, you know, as you mentioned before, these are my opinions, none of this is financial advice, but
15:38
[SPEAKER_00]: I think people underestimate how reflexive these assets can become specifically things with fundamentals that are growing really quickly and or something like Z-Cash, which, you know, for money, the fundamentals of money actually improve the higher the price, which is, you know, unique.
15:59
[SPEAKER_01]: So what do you dial in on when you're looking at this?
16:02
[SPEAKER_01]: Cause I mean, Venice is running, Z-cash is running.
16:05
[SPEAKER_01]: There is a lot out there and I completely agree with you.
16:08
[SPEAKER_01]: I was just in the process of building something that we're gonna do on R in this week.
16:14
[SPEAKER_01]: And one of the things I mentioned in it was that,
16:18
[SPEAKER_01]: This idea that it's going to be in everything cycle is just something that I really don't believe in.
16:22
[SPEAKER_01]: I think that the crypto market has expanded to a point where there are clear winners and there's clear losers.
16:28
[SPEAKER_01]: And I think what is actually doing things in providing value and growing, like that's what's going to succeed.
16:36
[SPEAKER_01]: And I know that that sounds like kind of stupid and straightforward, but it's true.
16:39
[SPEAKER_01]: And there's a lot of projects out there that aren't growing and that they're not building and they're not providing value.
16:43
[SPEAKER_01]: And you kind of just see them
16:48
[SPEAKER_01]: So I guess what do you look at because the amount of crypto's has gone parabolic in the last several years.
16:53
[SPEAKER_01]: I mean, if you look at how many cryptos are in existence, I remember I'm probably all of us, I think we're there, you know, back in the day there's a few thousand cryptos and there's 10,000 then a hundred thousand and now there's tens of millions and that's just like what's recorded on coin market cap.
17:11
[SPEAKER_01]: What do you think are the most important things to maybe pay attention to to sift through all that noise?
17:18
[SPEAKER_00]: Yeah, so there's two main themes that have been the focus of the fund for the majority of the year, which is the intersection of crypto and AI and then tokenization slash 24 seven trading of markets and I think those are the areas that will see the most interesting developments, the most growth, the most attention just the most capital flows as well, which you know is is important.
17:43
[SPEAKER_00]: So yeah, those are the two things, I guess the third thing which is really always the case in crypto is money as a theme in terms of store value, not necessarily a medium of exchange, meaning of exchange and stable coins put in that tokenization category really more so.
18:01
[SPEAKER_00]: But those are the two or three things that that I think are our top of mind.
18:05
[SPEAKER_01]: Well, let's flip that question on its head, I guess, and say, what about the things that just have not been doing well?
18:13
[SPEAKER_01]: I'm sure we've all been there.
18:15
[SPEAKER_01]: If we're entering into this stage where we feel like the bull market starting to ramp back up and reverse,
18:21
[SPEAKER_01]: a lot of people probably have tokens from the prior cycles.
18:26
[SPEAKER_01]: That just aren't very viable anymore.
18:29
[SPEAKER_01]: How do you approach those and say, hey, you know, maybe I want to keep this token.
18:34
[SPEAKER_01]: I want to cut that token.
18:35
[SPEAKER_01]: I want to reallocate from this to there.
18:38
[SPEAKER_01]: What goes into your process on deciding that?
18:41
[SPEAKER_01]: Is it just based off of what
18:44
[SPEAKER_01]: You know, category of the crypto is working in what genre it's in, is it based off of tokenomics, is it based off of price performance, is it on chain metrics, what matters to you the most when kind of reorganizing a portfolio with a new cycle in mind?
18:59
[SPEAKER_00]: Yeah.
19:00
[SPEAKER_00]: So I look at it from the framing of if I
19:06
[SPEAKER_00]: own something, right?
19:07
[SPEAKER_00]: Would I buy that again today?
19:09
[SPEAKER_00]: And you constantly have to re-underwrite what you own it.
19:12
[SPEAKER_00]: And if it's something that you own because you've owned in the past, that's not necessarily a great reason to continue to hold it.
19:19
[SPEAKER_00]: I know there's all sorts of biases around wanting to see something go back to where it was and maybe you're down and don't wanna sell it a loss.
19:28
[SPEAKER_00]: But that's the general framing that I use.
19:30
[SPEAKER_00]: on change traction, the execution against their roadmap, how involved the team is, what do the tokenomics look like?
19:38
[SPEAKER_00]: All of those things that you mentioned as inputs to determine would I own it now?
19:43
[SPEAKER_00]: But then,
19:45
[SPEAKER_00]: You know, thinking about like, well, if I wouldn't own it now, I'd probably shouldn't own it period.
19:48
[SPEAKER_00]: The one caveat that I would say to this, which is very, very tricky to determine.
19:55
[SPEAKER_00]: So maybe that's not to even try.
19:57
[SPEAKER_00]: Is there's a lot of tokens that as markets recover, go up 10, 20, 50, 100% because you start to see flows again in their liquid.
20:08
[SPEAKER_00]: So maybe there's opportunity that like, time your exit optimally.
20:12
[SPEAKER_00]: on something that you don't necessarily want to own long-term versus sell at the absolute bottom.
20:18
[SPEAKER_00]: But my framing is always, you know, if I wouldn't buy it today, I probably shouldn't own it.
20:23
[SPEAKER_02]: Yeah.
20:24
[SPEAKER_02]: And, you know, one of the things kind of going back to one of the coins that we talked about recently was Z-Cash, and this is something that he's kind of, you know, like he said $20 billion market cap, but the total addressable market value is, you know, Bitcoin or wherever Bitcoin's trying to be.
20:40
[SPEAKER_02]: So it has a really big growth opportunity, but one of the things that I thought was pretty cool was that they just recently launched.
20:46
[SPEAKER_02]: a gray scale launched a ETF for them.
20:50
[SPEAKER_02]: And so the same way that you trade I bit or FBTC or any of these other liquid open entity TFs in your brokerage account, you can now trade Z cash.
20:59
[SPEAKER_02]: You pay a 2.5% annualized management fee, which is a little high for an ETF.
21:04
[SPEAKER_02]: Um, but you could also trade options on this, uh, now.
21:08
[SPEAKER_02]: And so anybody who's at home listening and, you know, wants to trade options on Z cash and their brokerage, that is what I talk.
21:15
[SPEAKER_02]: When I talk about high volatility, that's as high volatility as you could get.
21:18
[SPEAKER_02]: Just thinking of my language.
21:21
[SPEAKER_00]: Yeah, that is really cool because, you know, retail traders and really just investors in general are super familiar with options, even more so than perps or kind of the product that people know that traditional people are starting to learn more about.
21:37
[SPEAKER_00]: The implied volatility on Z cash options is very very high.
21:43
[SPEAKER_00]: So it's not going to be priced the same way as Bitcoin, but yeah, I do think it increases the.
21:49
[SPEAKER_00]: the allocator base to be able to one access in that form, but to also to be able to hedge and buy puts and protect the position.
21:57
[SPEAKER_00]: Yeah, so it's interesting to see, and also the two and a half percent, that's just the existing trust product that that converted over to an ETF.
22:06
[SPEAKER_00]: I'm sure we're going to see 10 other ETFs that eventually end up bringing that cost a lot lower.
22:13
[SPEAKER_02]: No, that makes a ton of sense.
22:15
[SPEAKER_02]: It's just fun to see, you know, he cash infiltrating the broker chouses and speaking of broker chouses, we've got Robin Hood, which now is, you know, bringing their expertise to their own chain with the Robin Hood chain.
22:31
[SPEAKER_02]: Have you been, you know, trading there?
22:33
[SPEAKER_02]: What do you see in, is this a flash in the pan?
22:36
[SPEAKER_02]: Or is this more?
22:38
[SPEAKER_00]: Yeah, I mean, I don't think it's a flash on the panel at all.
22:41
[SPEAKER_00]: The way I think about in front execution layers is you're either best in class technology with
22:51
[SPEAKER_00]: good distribution and that distribution builds network effects that grows upon itself.
22:56
[SPEAKER_00]: I would say Solana is probably the best example of that.
23:00
[SPEAKER_00]: Or it's kind of like good enough tech that then has really, really strong distribution.
23:07
[SPEAKER_00]: And like in the past, that was B&B, was probably the best example of that.
23:13
[SPEAKER_00]: Binance chain, then base has also been a great example of that.
23:16
[SPEAKER_00]: And Robin Hood, now is probably the best example
23:21
[SPEAKER_00]: of a tier one consumer application financial product that has a massive user base that it can bring on chain.
23:31
[SPEAKER_00]: So yeah, I don't know if it's gonna continue to do $5 or $10 million of revenue a day for the chain that probably come down a little bit and they probably optimize fees as well because that's not an ideal user experience.
23:45
[SPEAKER_00]: But yeah, I can't see this not continuing to grow over time.
23:50
[SPEAKER_02]: Yeah, I think it's a cool trend where you have, you know, all these different RWAs or, you know, real world assets.
23:58
[SPEAKER_02]: Now, be coming on chain.
24:00
[SPEAKER_02]: You're seeing, you know, tokens go off chain and become equity.
24:04
[SPEAKER_02]: You're seeing a traditional brokerage house is launched their own.
24:08
[SPEAKER_02]: you know, crypto protocol is just like how cool, you know, just a melding of the financial worlds and to kind of what we've always envisioned is like there won't be any delineation or lines drawn between crypto and finance.
24:22
[SPEAKER_02]: It's all kind of meshing together.
24:24
[SPEAKER_02]: As one, and I'm curious to kind of get your thoughts on that.
24:28
[SPEAKER_02]: Do you kind of foresee, you know, this trend galvanizing or do you continue to see, you know, crypto being, you know, maybe a little bit on the outskirts and since clarity act isn't passing, like you said, maybe CCC FTC, you're going to be able to get some ducks in a row, but do you see this melding continuing.
24:48
[SPEAKER_00]: Yeah, definitely.
24:49
[SPEAKER_00]: We're seeing a lot of the traditional brokerages lean towards 24, seven trading anyways and blockchains are more efficient ways of doing that.
24:59
[SPEAKER_00]: Now they're doing more like potentially 24, five or whatnot.
25:04
[SPEAKER_00]: But yeah, blockchains are better ways to do that for tokenized stocks.
25:07
[SPEAKER_00]: We're going to just naturally see more tokenized stocks as yield investors.
25:12
[SPEAKER_00]: recreate the basis trade.
25:14
[SPEAKER_00]: That's one of the reasons why there was so much in the way of Bitcoin ETF inflows because folks were long Bitcoin short purpose and futures and earning those funding rates.
25:26
[SPEAKER_00]: They're going to do the same thing with tokenized stocks but more profitable with Dina as already announced that they intend to do that.
25:33
[SPEAKER_00]: So that will grow the tokenized stocks on chain.
25:36
[SPEAKER_00]: And then also like it's funny to think of this as a catalyst for expansion of tokenized stocks,
25:42
[SPEAKER_00]: Memecoin training is not going anywhere.
25:44
[SPEAKER_00]: It's just like the amount of social training and the pairing that we're seeing of meme coins with tokenized stocks feels like a durable
25:54
[SPEAKER_00]: narrative innovation if you want to call that where it's just more fun for retail investors to trade when it's paired with that asset where it feels more related and also the reflection tokens where if there's a tax on trading that tax then goes back to give you yields and the other asset.
26:12
[SPEAKER_00]: So
26:14
[SPEAKER_00]: You know, one example that we see on Solana is Z-Cat with Z-Cash, and then there's a, it's not a token I stock, but I think the concept applies where there's a 3% tax and a majority of that then gives Z-Cat holders yield in Z-Cash, which is now 200% APY.
26:32
[SPEAKER_00]: So there's a lot more games that are being created, and that's could also grow the token I stock full.
26:38
[SPEAKER_02]: Yeah.
26:39
[SPEAKER_02]: Well, I mean, tell me a little bit more about the Z-Cat thing.
26:42
[SPEAKER_02]: I've seen a little bit of it.
26:44
[SPEAKER_02]: So it's just a meme coin that basically if you hold it, you earn Z-Cash.
26:49
[SPEAKER_00]: Yeah, essentially that.
26:51
[SPEAKER_00]: Nice.
26:53
[SPEAKER_00]: You hold the sense of that.
26:54
[SPEAKER_00]: There's trading fees that are much higher than typical trading fees.
26:59
[SPEAKER_00]: All of those or most of those trading fees are then used to buy Z cash.
27:04
[SPEAKER_00]: And there's no claim function or anything you need to do.
27:06
[SPEAKER_00]: Just auto distributes it to token holders unless as long as you own more than some de minimize amount like 20 bucks.
27:14
[SPEAKER_00]: all of that.
27:15
[SPEAKER_00]: Yeah, it's a really interesting one.
27:17
[SPEAKER_00]: And of course, all of this hinges on trading volume remaining high, if trading volume falls off, then there's no fees to turn into z-cash to then pay people.
27:28
[SPEAKER_00]: But there's a lot of these that come around like, there's a per meme coin that launched that then gives you yield and hype.
27:36
[SPEAKER_00]: There's another one called Uber, where it's wrapped xRP,
27:42
[SPEAKER_00]: matched with the Uber meme coin, not Uber stock, so the idea is like Uber drivers love to own Ripple, so you earn yields in Ripple by owning the Uber meme.
27:53
[SPEAKER_00]: Yeah, a few people have gotten pretty creative with these
27:57
[SPEAKER_02]: that is hilarious.
27:59
[SPEAKER_02]: That is so good.
28:01
[SPEAKER_02]: Well, look, while we have you, I want to make sure that we cover the recent transition in the Rockaway and a little bit about the firm and the transaction.
28:10
[SPEAKER_02]: You know, how did they?
28:13
[SPEAKER_02]: How did you and them get together?
28:15
[SPEAKER_02]: What went into it?
28:16
[SPEAKER_02]: And what changes?
28:18
[SPEAKER_02]: What stays the same?
28:18
[SPEAKER_02]: Just catch us up.
28:20
[SPEAKER_00]: Yeah, so I've actually known the Rockway X team for a really long time, known Victor, the founder there from 2020 from the beginning of my time at CoinFun, Merrick, the venture side and Sam on the growth side for five years at this point.
28:40
[SPEAKER_00]: And they're looking to launch a liquid strategy and we started talking earlier this year.
28:49
[SPEAKER_00]: what positions the fund and my investor base for the most success going forward as we enter what I believe is a really strong market going forward and that meant more research resources, larger capital base, more a broader team on operations execution, an incredible network that's built over the years, an institutional platform where you have the learnings of
29:16
[SPEAKER_00]: two venture funds, market neutral fund, as well as all of this engineering, vault, validator, infrastructure, and it felt like just a really, really strong fit.
29:25
[SPEAKER_00]: So we ended up coming together.
29:28
[SPEAKER_00]: They acquired real air capital.
29:31
[SPEAKER_00]: What was formerly relayer is now the flagship liquid fund for Rockway Axe, and now credibly excited to be leading this strategy on the journey with the Rockway
29:44
[SPEAKER_02]: Absolutely.
29:45
[SPEAKER_02]: And in terms of the investments or the strategy, does anything change?
29:51
[SPEAKER_02]: I know you have now a much larger team, bigger back office, maybe some more research analyst, maybe some more traders.
29:57
[SPEAKER_02]: How does it kind of change things going from a small shop to now, a very big shop?
30:03
[SPEAKER_00]: Yeah, it doesn't change the strategy or thesis at all.
30:07
[SPEAKER_00]: It just gives me more resources, more capabilities, broader expertise.
30:12
[SPEAKER_00]: So, as I think about my long short strategy, working with the market neutral team, that's really strong there.
30:18
[SPEAKER_00]: As I think about what are the trends that are happening and what we're seeing on the early stage side of the market, working with the venture team.
30:27
[SPEAKER_00]: So just a lot more cross collaboration,
30:32
[SPEAKER_00]: strategy and thesis, nothing is changing, which is the great part because I think that strategy and that thesis was really well set up and has worn a lot of fruit this year with some of the early investments in hype and Venice and St. Cash and Grass Network and others, but having
31:01
[SPEAKER_01]: So on the early side, that tends to always be a little bit different from traditional alt coins or mainstream projects that we talk about.
31:11
[SPEAKER_01]: What is different over there right now?
31:15
[SPEAKER_01]: I guess, yeah, I'll leave it pretty open.
31:18
[SPEAKER_01]: But I'm just curious.
31:20
[SPEAKER_01]: Are you seeing the same things on the early side of the investment area of things?
31:24
[SPEAKER_01]: Or is still just like it's all about tokenization or stable coins or privacy or AI?
31:30
[SPEAKER_01]: What are you seeing?
31:31
[SPEAKER_00]: Yeah, there are a lot more traditional fintech businesses leveraging stablecoins and tokenization, a lot of Neil Bank or Neil Broker's products trying to do the same thing.
31:43
[SPEAKER_00]: The tokenization infrastructure is usually a little bit later stage, a lot around social trading, so think palm, phomo, et cetera, type businesses.
31:55
[SPEAKER_00]: blood around prediction markets and sports betting and creating novel interfaces for using prediction markets.
32:07
[SPEAKER_00]: But overall, I would say it's just a much deeper focus on applications versus infrastructure than we've seen in the past, which is a good thing, because I think a lot of the infrastructure has been built.
32:19
[SPEAKER_00]: So we don't necessarily need to reinvent the wheel and have a hundred more L1s and L2s.
32:24
[SPEAKER_01]: Yeah, I would agree with you there.
32:26
[SPEAKER_01]: That was one of my pet peeves from the prior cycles is a new project would launch.
32:36
[SPEAKER_01]: Here's the pitch.
32:37
[SPEAKER_01]: We are 1% faster.
32:40
[SPEAKER_01]: We are 50% faster.
32:42
[SPEAKER_01]: We're 50% cheaper.
32:44
[SPEAKER_01]: You know how it goes.
32:45
[SPEAKER_01]: It's either your faster, your cheaper, and that was like the whole pitch.
32:48
[SPEAKER_01]: And it's like, all right, well, what's different?
32:49
[SPEAKER_01]: Like anyone can scale a blockchain, but that was just it.
32:52
[SPEAKER_01]: It was like another layer one, another one, another one after another.
32:56
[SPEAKER_01]: So I couldn't agree with you more there.
32:59
[SPEAKER_01]: One of the things I have questions about is about scaling maybe
33:05
[SPEAKER_01]: the way the traditional finance interacts with this because there has been so much attention about the traditional side of finance.
33:11
[SPEAKER_01]: It doesn't matter if it's, you know, banks or hedge funds or these asset managers or whatever it is, they clearly have a lot of interest and they're giving a lot of attention towards blockchain as a whole and with the association with that, you know, cryptos come and rail alongside it.
33:26
[SPEAKER_01]: Is there a way where these early projects can help bridge that gap or smooth out the process or remove the barriers to entry or do you just think that that's not something that we're going to see from the crypto side, that's something that we're going to see these traditional financial players doing internally and building that out internally?
33:46
[SPEAKER_00]: I think it's a combination of things, but I think we'll also see a lot of partnerships.
33:49
[SPEAKER_00]: So one thing that is interesting, I'm looking forward to later this year is what Layers Euro is doing and the partners that they have, whether it's, I guess, Tethers on the institutional but crypto side of things, you know, Citadel and then some of the major commodity and stock exchange that they're partnered with to build out a perpetual trading platform which they, you know, have called Atlas.
34:13
[SPEAKER_00]: I think that's a really interesting template and we'll see how that does when it goes live.
34:17
[SPEAKER_00]: I don't want to like predict success although I think they are a really good team so I have high hopes for what they can achieve but I think that's an interesting template where you have some of the leading applications and infrastructure builders partnering with some of the more innovative, earn innovation focused traditional players to build something together.
34:40
[SPEAKER_02]: Yeah, no, I couldn't have said it better.
34:43
[SPEAKER_02]: So what are some of the next catalysts that you're looking forward to here to close out?
34:49
[SPEAKER_02]: It's crazy to hear, but we're already closing out Q3, headed into Q4.
34:55
[SPEAKER_02]: What's on the horizon?
34:58
[SPEAKER_00]: Yeah, so there's crypto-specific things, but then also macro.
35:02
[SPEAKER_00]: And macro has been a really big driver of this rebound and crypto.
35:09
[SPEAKER_00]: you know, push that off to the side too quickly.
35:12
[SPEAKER_00]: We have in the next couple days and by the time the this air is, you know, it'll be probably just behind us is PPI and CPI.
35:21
[SPEAKER_00]: So some of the inflation data this week, and that is going to inform the Fed's decision.
35:27
[SPEAKER_00]: on the 16th about whether they hike rates or keep them unchanged, right now the market is saying like 58% likelihood of a hike, 42% likelihood of no change, assuming things are in line there, probably ends up being about 50, 50 going into the event.
35:46
[SPEAKER_00]: I'm no
35:48
[SPEAKER_00]: macro expert.
35:49
[SPEAKER_00]: There's people that's been a lot more time on this than me, but I'm actually leaning towards it being less likely that the Fed hikes and if that is the case, I think we can see a really strong move in Bitcoin like we saw on the Treasury made that announcement a couple weeks ago, so that'll be a pretty pivotal moment elections of course are are going to be a pivotal moment in November.
36:13
[SPEAKER_00]: But overall, on the regulatory side, we're seeing a lot of discussion around some of these innovation exemptions that could come pretty quickly, which would turbocharged token I stocks.
36:23
[SPEAKER_00]: I think purpose markets are continuing to grow and we're seeing
36:27
[SPEAKER_00]: you know, what hyperliquid and lighter and variational and a lot of the leading purpose platforms do, I'm the tokenized stock or not really tokenized, but you know, their version of stock commodities indices and purple and continue to grow and open interest there.
36:45
[SPEAKER_00]: Those are really the main things I'm looking at.
36:48
[SPEAKER_00]: On the AI side, it's more consumer application or broader infrastructure, things like Venice or Graths.
36:55
[SPEAKER_00]: But what I'm looking at to see is just can the companies and the teams with the strongest fundamentals?
37:03
[SPEAKER_00]: Can those fundamentals continue their momentum?
37:07
[SPEAKER_00]: And if that's the case, and there's a conducive environment in the market overall, I think we can see some really nice continuation.
37:16
[SPEAKER_01]: One of the things that really stood out to me this year was the divergence between Bitcoin and the general crypto market and the traditional financial markets because they've never really had perfect parity right but sometimes you'd have it more than others but you've seen that parity really really
37:35
[SPEAKER_01]: diverge and work cryptos acting independently and bitcoins acting independently and there are so many different catalysts happening I mentioned I mean sorry you mentioned PPI CPI we have that clarity talk and vote next week you talked about the fed coming to an interest rate decision I think there's news around the bank of Japan and what they're going to do with the whole carry trade and their situation over there then you have midterms and it's just like one thing after another and I think people are
38:04
[SPEAKER_01]: where do we even begin to turn our head towards?
38:07
[SPEAKER_01]: Is it this direction or that one or out of the 10 options that are available, what impacts crypto the most?
38:13
[SPEAKER_01]: Because again, there's this divergence from the way that the traditional equities have performed.
38:18
[SPEAKER_01]: So I guess where, how do you wait all of that?
38:21
[SPEAKER_01]: Because I think it's a changing dynamic where it does change and it's not always the same.
38:26
[SPEAKER_01]: But how do you begin to weigh some of the traditional stuff with the technicals, with the fundamentals,
38:34
[SPEAKER_01]: and put it all together.
38:35
[SPEAKER_00]: Yeah, it's, it's very interesting.
38:38
[SPEAKER_00]: I think this is just part of how crypto markets have evolved, where there's a lot more complexity and a lot more,
38:47
[SPEAKER_00]: like the connections are a lot deeper with broader markets and other asset classes and broader macro than it's ever been you know in 2017 it lived in its entirely in its own world and the prior cycles it overlapped a little bit you know 2022 one of the the big reasons why crypto sold off was because of the rate hike cycle that that we were in but I think this is just
39:13
[SPEAKER_00]: part of the maturation of the asset class that it becomes more interconnected and you need to become have an interdisciplinary skill set to be able to invest and crypto and understand what's happening and where things are headed.
39:28
[SPEAKER_02]: truly couldn't have set it better, especially with crypto being so global, right?
39:32
[SPEAKER_02]: I mean, you almost have to get to be an expert on different cultures and everything like that, like, for instance, in Korea, like things that used to call it the Kimchi premium,
39:47
[SPEAKER_02]: use so much leverage and gamble.
39:49
[SPEAKER_02]: And I saw just like crazy stats about how much percentage of the population would be gambling.
39:53
[SPEAKER_02]: And then just a few weeks ago, the government, you know, came and smacked it down and said in order to use leverage or trade on a broke account or something, you need to like go through a course, like a government sanctioned how to not lose my shirt course.
40:09
[SPEAKER_00]: This is actually a responsible thing to do.
40:11
[SPEAKER_00]: It's nice to see.
40:12
[SPEAKER_02]: I mean hey right me don't you don't want to see your you know your citizens re uh you know they're they're net worth and their their family savings go to a different country right and so it's just uh yeah it's kind of funny funny note there but uh yeah I mean all
40:29
[SPEAKER_00]: I don't know what it looked like in Korea before, maybe this was already the case, but to be enabled for options trading in the US, you have to take a test.
40:38
[SPEAKER_00]: It's not a very complicated test, but the brokerage asks you a bunch of different questions.
40:44
[SPEAKER_00]: I think investors shouldn't be gated from accessing financial products, but at the same time, it's important that people understand what they're doing.
40:55
[SPEAKER_02]: Yeah.
40:55
[SPEAKER_02]: No, couldn't agree more.
40:57
[SPEAKER_02]: And yeah, it's important for everybody who's out there who's listening.
41:01
[SPEAKER_02]: You know, make sure that you know what you're doing before you get into crypto.
41:05
[SPEAKER_02]: Whether that's paper trading first or listening to more podcasts and getting educated first or something like that.
41:11
[SPEAKER_02]: Don't just go shooting blindly.
41:14
[SPEAKER_02]: But we know everybody who's listening, all you good wonderful citizens of crypto nation are responsible.
41:19
[SPEAKER_02]: And so we let you, you know, make your own decisions.
41:22
[SPEAKER_02]: That's the great thing about crypto.
41:24
[SPEAKER_00]: Well, one other thing on this crossover that's pretty cool is if you looked a couple years back, crypto is just tokens and then you had Coinbase stock and then Robinhood started trading more with crypto and then you had circle IPO, but now there's depending on
41:43
[SPEAKER_00]: how related it is to crypto, whether it's like a 10 out of 10 or a 4 out of 10, but still related to crypto in some way, you have dozens or, you know, in my estimation, as much as 100 to 200 stocks that a meaningful part of their strategy and fundamentals are driven him by crypto and one way or another.
42:03
[SPEAKER_00]: So that's just another way to express the view, which is pretty cool.
42:06
[SPEAKER_02]: Yeah, it's a great point.
42:09
[SPEAKER_02]: Man, we could go all day, awesome.
42:11
[SPEAKER_02]: There's so much talk about it.
42:11
[SPEAKER_02]: And again, we'll have you back next quarter, whenever it works for our schedules.
42:17
[SPEAKER_02]: Where can people find out more about your journey?
42:20
[SPEAKER_02]: We'll put some links in the show notes.
42:22
[SPEAKER_02]: X, fund website, anything like that.
42:26
[SPEAKER_00]: Yeah, I'd say X is probably the best way.
42:30
[SPEAKER_00]: I share a lot of my Theses in real time on crypto, or crypto Twitter, I was about to say about it.
42:37
[SPEAKER_00]: Yeah, yeah, absolutely not as quickly to it.
42:40
[SPEAKER_00]: Yeah, exactly.
42:40
[SPEAKER_00]: My handle is just at Austin Baroque, it's my name.
42:43
[SPEAKER_00]: You know, obviously none of that's financial advice and just me thinking out loud and having by Theses stress tested and whatnot.
42:53
[SPEAKER_00]: Um, but yeah, that's probably the best way to get the latest on what I'm thinking when I'm looking at.
42:59
[SPEAKER_02]: I love it.
43:00
[SPEAKER_02]: I mean, you know, just to end on this note, you know, I'm curious if you ever put a note out there to the public.
43:06
[SPEAKER_02]: Hey, I'm thinking about this, you know, this is the multiple, this, the target does anybody ever just come in their super sharp and they just shred it up and give you a different view point that you maybe didn't see.
43:19
[SPEAKER_00]: Well, there is a lot of the latter because people like when you agree with them, especially if they own that asset, however, on the other hand, the nice thing about X is there's a lot of people that I love to disagree with you and tell you why you're wrong, which as long as you have a thick skin.
43:37
[SPEAKER_00]: is great because it allows you to think it's like, well, maybe am I wrong?
43:41
[SPEAKER_00]: Should I be thinking about it differently?
43:44
[SPEAKER_00]: What invalidates my thesis?
43:46
[SPEAKER_00]: You know, and you know, sometimes brings up things that you might not have considered.
43:51
[SPEAKER_00]: So, well, there is a lot of support.
43:53
[SPEAKER_00]: The other side is maybe more useful either.
43:57
[SPEAKER_02]: Thank you for joining us on another episode of the crypto 101 podcast hit the show notes like subscribe anything like that We appreciate you come back same time same place next week.
44:10
[SPEAKER_02]: We'll have yet another great guest for you take care everyone