REKT Vision: Is The Banana Zone Over? ft. Raoul Pal
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Hi, everyone. I'm Raoul Pal, the CEO and co-founder of Real Vision. Here at Real Vision, we're committed to give you the best knowledge, tools, and network to help you succeed in your financial future. If you're enjoying this podcast, please take a moment to give it a five-star rating. It truly helps us continue to bring top-tier content. Thank you so much.

All right. Hello, everyone. It is 2025. Still the same team. We've actually got Raoul with us for the first episode of the year. Luckily, we're not all-time highs and there's a lot of finger pointing going on. So hopefully you can explain why we're not all-time highs. Just before we go live, obviously want to highlight again, we've got the Real Vision Crypto Gathering coming up in Miami. And

It looks like all the VIP tickets are now gone, but you can still find some general admission tickets. If you want to go and hang out with, Obi's definitely going to be there, Raoul's going to be there, I may be there, still deciding, but it's always a great event. Head to realvision.com forward slash CG 2025 to see if you can get some general admission tickets there. All right, with that said, it's good to see you guys again. We are...

Felt like a lot happened over that Christmas break. And I think most notably was kind of it all seemingly getting a little bit more wobbly after the last Fed meeting. A lot of macro analysts started calling for tops on different things and that permeated into crypto. And I mean, this week, it was a full-blown. We may have topped all over the timeline. At the same time, you saw AI continue to lead the narrative. Definitely feels like the underlying story

a bid for a lot of different things in crypto at the moment. It's a lot of stuff pivot into AI and seeing that might be the final product market fit here for crypto. And here we are. Bitcoin, we had a jobs figure which is slightly better than expected, I guess, today. Stocks have gone a little bit lower. The dollars are obviously breaking out to new highs at the moment.

And Bitcoin's actually holding up okay in that sort of world, I still think. 93.5 with a very, very strong dollar and stocks looking like they may be starting to break down a little bit lower.

feels okay. Definitely doesn't feel as though we've fallen out of bed. This 92K level or 91.5, let's say, has been a point of resistance kind of since the election. And that's held up again. And yeah, AI still seems to be the main bid. Raoul, what's your take on stuff? I saw, and it's already becoming kind of an infamous post of the banana singularity being spoken about,

What is the banana singularity and why are we all saved? Okay, so that is just the phases of how the banana zone tends to play out. You tend to get the first spurt. Bitcoin went from 50,000 to 100,000. It then corrects a bit. Everyone freaks out. I mean, it's ridiculous. I mean, it's literally ridiculous. The people freaking out from a correction like this. And then you usually get the alt season part. And that's when...

Any moron can make money, including myself in anything that you hold. And that is the old season that usually, you know, in full throttle goes through till let's say April. Uh, and then it tends to get more selective in the final phase where they concentrate on the key themes, uh,

So everybody's asking about, you know, I put a big thread about it yesterday. You know, has the market topped? What's going on? Is that M2 chart going to play out? Are we all fucked? Is it going down to 75,000? Yada, yada, yada, yada. I mean, it's all day. And then it's like, oh, my God, the Fed aren't going to cut rates. That's the end of the market. They can't, you know, just so much noise.

What I urge people, I wrote, I think, in response to you, Ovi, is 2017-16 was a near identical setup. So the market has been following the pattern. But outside of that, Trump got elected. Everyone went, oh, shit, tariffs. They're inflationary. The dollar screamed higher. Rates went higher. And then what happened was Trump came in and said, we need to get a lower dollar.

Scott Besson's already talked about it. The other guy who's coming in is the economic council guy has already talked about the dollar being a problem. So I think they're using the dollar as the stick and then offer it as the carrot to the Chinese, the Canadians, the Europeans and everybody else, which is,

If you agree a trade deal with us, we will help lower the dollar. The dollar is a function of liquidity, which is why rates are so bad as well. There's actually not enough liquidity in the system. And I think that's sort of somewhat purposeful overall. But if we go back to 2017 and we had that setup of the dollar turning over and then rates actually came down for the rest of the year, the other thing, the Fed were raising rates all of 2017 and crypto went up. Yeah.

USM2 went down. So all of the things you would be looking for, they were all in reverse. So what really was happening in 2017 was China had been beaten up by the strong dollar in 2015, 2016, and their economy was super slow. China increased the balance sheet and the Fed lowered the dollar. The Europeans did some QE and the UK did some QE.

We've got a near identical setup. The market is over-extrapolating tariffs and fears. Whatever rates do is irrelevant. It's what global money supply does. Not global money supply, global liquidity does going forwards. We know back in 2017, the...

Treasury drain the TGA for the same reason. I mean, it's like literally everything is an exact rerun of what happened. So look, I don't expect an exact rerun this time, but probabilistically speaking, there's nothing to be concerned over. Now, when we looked at that big M2 drop last time around and this time around, it leads by about 12 weeks.

So last time around, we had an identical M2 drop. You can see it. And if you can share that chart you're looking at now after that one. So this one shows the near identical pattern in M2 back then versus now. What happened was the dollar weakened, global M2 went up. What also happened is the NASDAQ had a similar correction, crypto very similar,

And what crypto did was didn't follow M2 going forwards because it starts to decouple as the bull market takes place. And what happened was it did an eight-day correction and did negative 35%. This time, it feels like it's slightly more sideways. Whether it goes a bit lower or not doesn't really matter. But the point being, you're looking for the bottom line.

as opposed to a sharp acceleration from here. But either way, it's over pretty quickly. And then what happened last time around is the moment Bitcoin hit a blow, alts took off. And so that's my general thesis on all of this right now. This is pretty much playing out exactly as I've been expecting it to play out. And-

whether that's in liquidity terms, because it's a rerun, because we've got this debt cycle, it's the same bloody thing, right? So that's my overall view. It's like, it's all fine.

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It looks like global liquidity is kind of on this downward trend since 2021. And like you said, it looked like it was going to turn up second half of last year and then

Now the Fed seems to be hovering and all this sort of stuff. And Bitcoin has just gone higher. Like, do you think there's also been a slight breakdown of this as well? Like, obviously we had the ETFs come in and now we've got the Trump trade coming in. Like, I know, obviously there is this, there is this reductive kind of correlation to everything just being liquidity. But do you think also crypto can just,

can just go higher because it's found product market fit and AI and found political support and probably is going to find institutional support with a bunch of different ETFs. Do you think there's a case for that as well? It normally decouples at this point in the cycle anyway because it starts forward-looking. Now, liquidity is actually...

Financial conditions drive liquidity. And so crypto has been following financial conditions. So it suggests that liquidity comes back. But then in the full bull market phase, it normally does decouple. So I don't think it's doing anything unusual whatsoever.

And, you know, we're now a $3 trillion asset. You need more institutions in to drive the asset hire anyway. You know, people forget that. The institutions here, it's amazing. Well, it has to be if you want 100% rise. You need larger pools of capital now because it's a much bigger market. So, and over time, I think, yes, we get product market fit. I don't think AI is the product market fit currently. I think that's all narrative-based versus the reality of where it is. But, yeah,

Look, overall, the trends are all right. And we haven't even got the bloody administration in yet. We haven't got the clarity that we're waiting for. And everyone's kind of a max fear right now. It's crazy. But that's a good setup, right? It's just a good setup for the year. Hi, Raoul here.

Listen, I think we've got until 2030 before the economic singularity arrives. Now, it might not be the exact date, but it's around then. So we have about six years to figure out how to unfuck our future. I've put together a report to help you called Prepare for 2030. It's going to help you take the first steps in that journey to make sure you're secure past 2030. So just click on the link below and start your journey now. It feels like to me...

the main thing that people are worried about is rates. Like everyone's somehow fallen back in, like degenerated, like, oh my God, we're getting rate cuts. And this is the thing that's going to just like turbo send us, almost ignoring the fact that we've rallied a lot in the last two years because of other things such as like the big AI boom and just kind of like this new paradigm where we can have like higher rates and equity growth. So it's almost like everyone's just forgotten about that.

Oh no, we're going to have few, not only are we not going to have hikes, it's just fewer rate cuts in 2025. Like forget, you know, hikes, but people are freaking out as if there are going to be hikes, but really they're just going to be fewer rate cuts. So it just seems like, it seems very overblown to me because when you take a step back, okay, maybe we have no rate cuts for 2025, maybe we just have fewer rate cuts. But even if rates stay where they are, like it's very different to maybe the PTSD people have from two years ago when inflation hit 9%.

And when it hit 9%, where was the base rate? Like 2%, 2.5% or something like that? Whereas right now, you're going to have a base rate in the context of like 4% to 5% or 4.5% to 5%, wherever it ends up settling. And inflation is what, like around 3%. So it's just a very different... Inflation is the discounting mechanism, not rates. Exactly. And so the other thing that's interesting about this cycle is...

The best indicator for almost everything in the world is the ISM survey, the business cycle. The ISM is still not above 50. And back in 2017, it had come 50. But by about Feb, March, it really started accelerating. So we haven't even had a business cycle yet. Now, what's interesting is the best indicator of when you should be looking for a top in crypto is when the ISM is peaking, because that's when liquidity starts changing.

Now, that happened really early in 2021 because of the pandemic. So it happened in March 2021. 2017 didn't happen until the end of the year. I think because ISM has been so low this year, there's a chance that this thing doesn't peak until Q1 2026. So it's a slightly different cycle, but we're just not even in the ballpark of looking for a larger top.

So obviously in this view that maybe liquidity does turn this year, something probably has to break, right? Something has to freak out. China feels like right now that's the most obvious thing, right? The China game here is really clear. They cannot stimulate because the dollar is too strong and they'll break the lower bound of the yuan, right? They just can't do it. It's exactly what happened back in 2017.

What they need is the US to weaken the dollar, then they can stimulate. They know it. Everybody knows it. Yellen knows it. Scott Besson will know it. That is the game. And the game is we will not give this to you until you agree tariffs, and then they'll give it to them. And that's exactly what Trump did last time. So really, they will stimulate massively. They have to. They've got full-blown debt deflation going on. But they can't do it without losing their currency.

Yeah, it's kind of wild there. So it looks like deflation is obviously now the word in everyone's lips after the latest CPI figure that came out of China last week. And then you had bond yields hitting records low. Everyone's kind of freaking out there that we're just going to see QE forever. So if it's not via the Fed, would it be via swap lines again, you think? Well, they tend not to like to give the Chinese direct swap lines.

So the general mechanism is you give it to Japan. So you get the Japanese to weaken the dollar. And they showed their hand a while ago when they weakened the yen, the strengthening the yen. Once they strengthen the yen, that injects liquidity into the system. The largest part of the euro dollar market is the Japanese banks. So you need to give Japanese banks liquidity and they'll recycle it into China because they don't often like to give the Chinese direct swap lines.

So whatever the mechanism is, the European banks and the South Koreans are also involved in the euro dollar market, but it's really the Japanese. So usually you get the signal from Japan first that they start to say, we've had enough of the currency being this strong or this weak, and then it starts happening. Which we did see a little bit of last year. Right, exactly. That's right.

So, and the market did have a little bit of a freak out when that happened last time. So maybe around about the time that does happen, we will see another, we will see another freak out. Do you think away from crypto, there is still this concept of the banana zone too? Do you think...

Macro might also decouple from crypto here a little bit though. No, I think the business cycle is still not above 50. It will go above 50. That means corporate earnings go up and then we get rid of that bifurcation between the tech stocks, which are cashflow driven, zero debt and the regular economy. That gap closes because earnings grow.

Earnings grow, household earnings grow. Household earnings grow, investment goes into markets. So that virtuous cycle is all the same cycle across all assets. The next phase of this, we will see the cyclical plays, the commodity plays, all starting to rally as the global economy starts to recover. So that's all to come. The ISM is still below 50%.

Okay, so that would be a change from just a magnificent seven just dominating the stock market to everyone else. Obviously, that's been one of the main hallmarks of this current rally. So you're still predicting a very strong 2025 then for all risk assets? Yes, I am. I don't see anything that changes that because stimulus has to be on the cards for, you know, Europe's pretty bad. The UK's not in great shape.

And, you know, we could see yield curve control in some of these countries, particularly the UK, for example. The UK is freaking out right now. Yeah, it's got a real problem. There's not enough liquidity in the system, which is why the bond markets are decoupling from forward-looking inflation expectations, because there's all the supply of the, you know, the four-year cycle of refinancing the debt, not enough liquidity to manage it.

The other big change that happens, I think Basel IV comes into play, not in the UK yet, but in Europe first. And Basel IV, as ever, is just another backhanded mechanism for the banks to be forced to own more bonds. The UK and the US come at the middle of the year. So there's a big demand from bonds that come from this structural change as well, which helps add liquidity into the system.

Yeah, the only thing that I've just been worrying about is just that this strong dollar normally breaks something. And this sounds like a very peaceful, right? Oh, yeah, we'll open a swap line with Japan. But I just don't know if something in the interim might freak out. It's breaking China. That's what it's doing.

It is. It is. I guess it's already breaking a lot of things. I don't think the market can deal with the dollar being this high. And bond yields back towards 5% again? I mean, that just doesn't make sense to me, given the amount of debt that's all over the world. And also, Trump's, the two things he doesn't want is high rates, because he's a property guy. He understands. He's a growth guy.

So he doesn't want high rates and he doesn't want a higher dollar. So he comes in in about a week's time. So the chances of this changing pretty fast. And again, I've gone through, you know, I know Scott Besson. He was a Global Macro Investor subscriber. I've known him for a long time. He gets what has to happen here. There was a great interview with the new guys going in the Economic Council last

He just talked about, we're going to need a Plaza record at some point if this continues. We have to lower the dollar. And Trump needs exports because you've got the trade deficit. So everybody has to get the dollar lower. All he did last time in 2017 was right at the beginning, as soon as he came in, he said the dollar needs to weaken. He already said this week rates are too high. How does he do that?

Is it only these sort of swap lines? That's kind of the only way? Because there's a lot of questions about his ability to affect the Fed. Yeah, I don't think he can affect the Fed. We just got rid of the last hawk in the Fed. So I think the Fed will continue to cut rates. And that's okay. But really, it's down to the U.S.,

injecting liquidity to weaken the dollar and jaw-burning it lower. Because if the Fed come in or the Treasury come in and say, we believe in the strength of the dollar, but it's too high for growth right now, whatever, that's enough to turn market participants nervous. And then all you need to do is inject liquidity through various mechanisms to force that to happen. We've got a $700 billion drain of the TGA to come as well.

we've just drained the reverse repo. So they're going to have to stop QT as soon as they finish the reverse repo, which will be by kind of Feb maybe. So then you're ending QT, injecting liquidity from the TGA. They've already mentioned, who was it? I can't remember who it was. I think it was Powell at the last Fed meeting said, we don't want to have to tighten liquidity on the rebuild of the TGA.

That was a signal that everyone missed. He said, we understand draining the TGA is liquidity into the system, but we don't necessarily want to tighten again once we have to rebuild it. So that's telling me it's probably QE. Now, maybe it's not QE. Maybe it's QE by a different name. But I think they all know the game. Yeah. I feel like Swap Lines or...

And do you think tariffs will actually happen then? They'll just do deals? It feels like that's what kind of happened largely with the first administration. Yeah, and the tariffs will be scaled, so they won't be as big, and they take time. But I think what Trump, because Trump is actually a good negotiator, a good dealmaker, he will try and get some early wins. And so he'll get some early wins in exchange for the dollar, that whole idea, and then say if it doesn't happen...

We're going to keep increasing tariffs. So there'll be some sort of ongoing stick to beat them with to try and readjust these deficits. So yeah, I think it won't be as big as people expect. That's what happened last time as well. It takes time. And the other thing we know about Trump, which is really interesting for 2026, is they're going to go all out to not lose the midterms, unlike probably any party we've ever seen.

Because we've got all these tech accelerations, tech accelerationists in power, and they need the Congress and the Senate. So they're going to bribe the voters in every way possible to show victory. So it's very interesting. I think 2026 may be somewhat different than we expect. It's probably a down year, but probably a lot milder because they have to win the midterms. Okay. So in summary, we feel as though

But on the zone, still on. We're going to see it pick up in ISM, pick up in money supply, but maybe not just from the Fed, from other routes. Strong year for crypto, strong year for risk assets in general. Trump probably gets deals done. Much like alt season where all assets go up, in traditional markets we'll see the same. So mining stocks go up and retail go up and everything goes up because earnings.

Everyone's got a bit more money. So what's that? Brought a base rally. Okay. So in that backdrop, let's maybe focus a little bit more into crypto. Obviously, since the start of this year, I feel as though AI has been the number one thing on everyone's lips. It crossed 70% in terms of Mindshare. That's a good website at the moment, which people are using called Kito. Here up towards like 72% for Mindshare. And this was...

This was previously dominated by things like memes, by DeFi, by Deepin. Now it's all AI. And this has all started, obviously, with Truth Terminal. It came in. I know you had an interview with Imral. But then it's since expanded into crypto and many different forms meeting AI. So it's chatbots. Now we're going to do AI agents that trade for you. And a lot of this is promises. A lot of this is...

is, um, it reminds you of ICOs. It reminds you of NFTs to a certain extent. There's a lot of blue sky thinking. There's a lot of, we'll have this in three to six months rather than right now. And people are buying into those narratives. Um, at the moment, the strongest players have been either the marketplaces for these agents, albeit the agents are primarily chatbots, uh, virtuals has got the highest market gap around 3 billion. Um,

AI16Z is the second highest. That is an open source project, which is by an open source framework called ELISA, which is actually the number one open source framework on GitHub, or at least trending on GitHub for the last two or three months, I think it was. So this has gone very, very popular in broader AI, albeit their path is also to then release a marketplace and potentially like a launch pool down the line.

And then some of the smaller ones have been around the actual bots themselves. So AIXBT is kind of a genius bar for crypto. And you have those around the memes, which we've spoken about, which are like GOAT and Fartcoin, which came from Truth Terminal. And then

you have other things like at the moment of the last week, I've seen DeFi with an AI in there. DeFi AI, I don't know how you'd even pronounce that or AI-Fi, which is, yeah, these bots coming in and yield farming for you, trading for you. And there's a number of different projects which are trying to be big in that space as well. I'm a cautiously optimistic investor.

with a heavy dose of understanding the law of this is the law ovi was a very very cautiously uh cautious at the start and then has recently um dipped his toe i feel and become a bit more of a believer in some of the uh in some of the potential utility here and ral i feel like you're you're kind of at the show me story stage prefer left left curve stuff

Maybe I'll give it to you, Ovi. So like what changed your thesis around all this stuff? And do you think it can last? I don't, like, I think I was quite skeptical of all this stuff for a long time. Like I didn't touch any of it for the entirety of last year. Do I think it's a real product market fit for crypto? That part is definitely a showing me story. And because it's still so nascent, we're starting to see like the beginnings of like

AI agents and what they can do, but it's still very, very basic. And I guess the idea and hope is that this stuff improves and becomes a lot more usable. I guess what my thought process is, I think there's a difference in between something working out and being game changing versus whether the price of it goes up or down. And I think it's comparable to something like the metaverse in 2021. Like no one cares about the metaverse now, but

every metaverse related thing was absolutely roofing in 2021, obviously led by NFTs. And I think AI commands a similar brevity of narrative here. Obviously that's been the main driver for rallies and various tech stocks and video obviously is like the main one there. And it was kind of like in crypto last year, but all tokens that already had very high FTVs. And I think

products that maybe an average person couldn't really get their head around. And when I say average person, I'm now starting to think about like the usual retail casino crowd within crypto. If I look at these AI agents now, like who are the people trading them? Like who's in all this stuff? It's the same crowd that were in meme coins last year, which is the same crowd that were in NFTs in 2021, which is probably the same crowd who were in altcoins and DeFi in 2020. Like this crowd isn't necessarily like

the expert crowd on something. This is the casino crowd. But wherever the casino crowd goes, it tends to create a bubble in whatever that asset class narrative is. And so that's my take on it. I think there's enough people in it now and there's enough, obviously the mindshare stats speak for themselves, but there's enough mindshare right now where I think it can actually work. And even though we don't have these amazing products yet, there are stuff like AIXPTA, AIXPTAgent,

is pretty cool. Like it's cool to see like something autonomously give you views on stuff, even if they're not always correct. We obviously have like an agent for RecGuy now, which has actually been pretty useful. And there's a lot of things we can do from the art side of things. So there are like,

There are some things which you can like see, like feel and touch virtually, I think, which is getting people a bit more on board, which is what I think NFTs were. Like once people started collecting NFTs, they're like, okay, cool, I get this now. Now I'm on board. So I just think like, you know, this, I just think this would open up

a wider range of potential investors away from just retail. Because if you're like an institutional fund where you just can't justify putting gambling meme coins to your investors, you can now kind of sort of spin a story on, oh, hey, this is like AI and there's real tech behind it. And these agents could go out there and do all these amazing things. And this is very early. And I think that whether...

It's successful or not is another thing, but it is a real theory you can pitch to someone and probably get someone on board. And I think this number has been touted

around for a lot now in the last couple of weeks, but the total market cap of AI agents and its infrastructure is like $16 billion. That could easily be 10x. Whether those coins are just by supply of coins increasing, it will remain to be seen. But I just find it very hard to believe that if this market keeps going, that number is not going to do a 5 to 10x, which means

I think a lot of these AI infrastructure coins could be in the tens of billions of market caps. Because if you start, you can think about them, if your head is plugged into like the meme coin world, you're thinking about like when something gets to 100 million or 500 million or a billion, and then things seem to top out at a billion. But in altcoins, things have huge FDVs, right? And if this becomes and has the potential to be like the number one altcoin sector, I think

the ceiling of these FTVs can be very, very high and much higher than where we are now. So that's kind of like my top down thesis on it. And that's, I've really like, I've really gone from one to the other. Like I was very much against touching any of this stuff. And even on New Year's Eve, Mando was at my throat as it again. And I was like, nah, I just, I just don't really believe in this stuff. And I think on New Year's Day, I just,

I was, you know why I just, this feels like one of those things where I keep saying, no, I'm going to fade it. And then I'm going to end up buying it too late. So I just thought I've been in this position before. I've made that mistake before. Um, uh,

Honestly, the last time something like this happened was NFTs in 2021, when Mando was like, you should buy NFTs. I didn't until he started making hundreds of thousands of dollars in NFTs. I thought, okay, I'm going to start buying them now, which still wasn't too late. But I was like, I'm not going to make the same mistake this time. So that's just my take on it. Well, you did buy them actually at the mini peak for them. I did. I knew I would create a local top. I did that knowingly, but... You did NFTs too, right? You came in, work out what's valuable and then...

Raoul, I know you're like, which I think has been a fail safe way to be in crypto, which is stay to the left. If it's funny, it's probably investable. It can onboard people quickly. This is returned to the stuff that everyone's been wrecked on really. A lot of the utility stuff, a lot of the hopes and dreams and founders we all believe in who then let us all down. Is your issue that it's,

Is that sort of thing? Or is it your issue that you just don't see this as being the actual utility, I say, for crypto? You don't see utility in these projects? So I think Ovi mentioning the metaverse is dead on. The metaverse is real. It'll be fucking enormous at some point. But we just bought a bunch of hopes and dreams and it wasn't a metaverse. I mean, Decentraland, Sandbox, it was all terrible, right? So what have we got here? We've got...

Us over-extrapolating on the future of AI. The reality, because I spend a lot of time in AI world, is the reality is agents don't exist in AI yet.

So we don't have fucking agents. What we have is a bunch of macros and plus AI search and a chatbot. But this is not agents. And to watch ThreadGuy and all these guys going, oh my God, this is the future of the world. They are so far behind where AI really is. The technology we're seeing in this token side is two-year-old technology. So we are not anywhere close to what is about to happen in AI world in 2025, which is full autonomous agents.

it'll blow everybody's minds. And it will not come to crypto first because, again, people are like, oh, there's so much money in crypto, 16 billion. That's a fucking funding round for OpenAI. They have so much density of talent between Anthropic, OpenAI, Google, and Meta that it is laughable to compare us to that. So I think that the risk is here that we've hit peak attention because everyone was bored over December and we've forced a narrative.

The narrative over time will be like the metaverse, spot on. Like DeFi was, spot on, right? These narratives are right, but we're over-extrapolating, which is why I think it's a mid-curve. We're over-extrapolating, kind of claiming that we've reached the holy grail within a bunch of degens. And I think Ovi's point, it's the same fucking people.

It's exactly the same people were pushing with six months ago. And so we're not doing anything different. I spent a lot of time with people like Andy Ailey and stuff like that, finding out really what's going on. What was interesting from him was getting a memetic to leap from his model to the human conscious and become viral. Okay, that was very interesting. And so, you know, you guys using an AI for rec guy may be nothing to do with

Is it this some sort of agent that people can use? And more is, can it implant virality of memetics? That's very powerful. That is a proven thing. And it ended up raising capital in this random thing. So I am, I think we're all, I think he's very good.

Am I frozen? You're freshly frozen, but you came in calling us all mid-curves. Yeah, I just think it's mid-curve because it's so far behind where the reality is. We've discovered God in crypto. Like, fuck me, have you not been following this space? So what's interesting is if you look at the new ChatGPT-04 model, it has an IQ of 157.

The average IQ of the person getting involved in this stuff is about 100. Yeah. I agree. I agree with all of that, by the way. I think everything you said is completely true. Now, could it go up? Yes. Yeah, that's exactly it. But I'm not going to – I think it passed peak attention. Now, will one of those projects like virtuals, because it has a cash flow that generates stuff, can it keep going? For sure. I just think there's easier bets.

That's my general view. See, where I would challenge that is I actually think it is a slightly broader Firebase. That's what I've seen. I actually felt like a lot of the meme coin traders and NFT traders faded this stuff for a long time and actually have continued to fade it and not liked it. What I've seen is a lot more like it's a lot more institutional people, right?

Like bankless are getting involved in this sort of stuff. You know, like it feels as though the crowd that wasn't involved. Because they're mid-curve. Right. That's what I mean. It's the mid-curve revenge trade. It's the mid-curve revenge trade. This is, everyone was playing around with, everyone faded this.

I think a lot of people still are fading this. So I actually don't think it's the same as the WIF crowd. I think it's quite a different crowd. And I think that they often believe in stuff for a lot longer than the WIF crowd. Like I actually think that if you get liquid token funds, like Obi said, you have a broader buyer base, people who get into this. I think it's more a challenge to altcoins than I think it is to WIF. That's basically what I think it is. I would also like, I don't know, but I have seen more...

interesting stuff from this sector that I have seen from a lot of the rest of the altcoin sectors for a long time. Like, I actually think there's some cool stuff going on here. In the same way that I laughed at memes, I still think they're really good.

I actually think that if, you know, you're starting to see, you know, bots that can swap for you, trade for you. If this is, I know these are obviously wrappers of often old versions of, of chat GBT or, or the Claude model or whatever model they're going to do. They often, they often are the older models. That's, that's a hundred percent true.

But I'm fairly sure, like you said, that those guys are not going to come in and do crypto. Like, I don't think that when the next chat GPT gets released, there's going to be a crypto integration. I don't think any of them are going to do it. They'll wait. So it's going to have to come from this sort of wrapper stuff. Like, we're going to have to have teams that wrap it and make it applicable to crypto, in my opinion. And although I would agree with you that it's still in the hope phase,

There is a world where you have a chat TVT sort of interface, which maybe we have a wrapper for, but you get it to do payments for you. You get it to do your shopping for you. You know, you're going to have MoonPay integrations for all these different sites. You could get it to trade for you. Like there is a world where, and I think that is kind of normie. I think you can pitch that in the same way. But I think we wouldn't disagree that that is coming, but it's not based on the current kind of

These are basically large pools of bots that we already seen on Telegram.

And what you're doing is, I was speaking to one of the groups yesterday, is what people are doing is training these bots to say, hey, I want to swap this to this to this and do this and do yield farming. You show it, it then joins the database. And if other people use it, you kind of get paid for that. So it's basically just models. It's no different than the pine cone models that are on TradingView for trading models and stuff like that.

So that's the issue I've got is it's still macros. Now, what you're talking about, Mando, is 100% right. Is that going to be these guys doing that? Or is that going to come from another group of people using whatever open AI release or whoever releases it? I don't know. So that's why I find it not so investable. Not that the theme isn't right. Of course it is. That nexus of AI and crypto is colossus. But it's like,

Are any of these guys doing that? Are we just building telegram chatbots? At the moment, it's largely chatbots. If you go into virtuals, obviously the main agents on virtuals, the vast majority of them are just Twitter accounts, which are often themed in different ways. The most famous of them right now is AIXBT, which is also trying to pivot, which is actually the number one mindshare in crypto. Like this bot is reaching hundreds of thousands of followers online.

And, but to be said, like it just, you just add it around different information in crypto and it kind of just gives you a summary. So you'd be like, Hey, what do you think of this token? And it will give you a summary. Often it kind of contradicts itself as Obi said, but this bot has become incredibly popular. It's just a way to kind of simplify information. And then some of the other bots are,

You have some which are more about like a DJ and stuff. You have ones which do like sports gambling, some which do some level of investing. Like it is basic. It's basic. None of them look that perfect right now. Yeah. One thing that I think will happen is this is going to be the UX layer for the whole internet and the UI layer. And so wallets will be this.

And once you've got a wallet that you can talk to and say, hey, buy me some Solana. I want it staked and then I want it restaked and I want to do this. And it just goes to do it. That is a big deal. Now, is that going to come from one of these or is that going to come from...

Robin Hood doing it or Coinbase. I've thought about this myself. Yeah. Why they haven't done it themselves. A lot of them are starting to list the coins, but surely if you're buying a finance or Coinbase here, you can dominate this. Well, because it's very hard to directionally know what to do because these bloody models improve too fast.

So anything you built is out of date. So you need to somehow set direction to be able to do it. The moment agents are out, agents can then improve on agents and you've got all of this self-improvement stuff. So it becomes easier to plant a flag. It's really hard to plant a flag right now because everything changes in three months. I think that's going to be an ongoing theme for CryptoMeetAI, which is that we will be using older models.

There's no doubt about it. Like the guys who are researching this sort of stuff will be building them for a few months and then the model will already be out of date versus the last one. But because the big major AI firms are not going to touch crypto, in my opinion, or be very, very slow to like roll out crypto integrations, I think we're probably going to be in that sort of world where you have a wrapper which makes it easier for you and maybe applies it in a different way. I think that's going to be kind of something that we see for many, many years, if I'm honest.

But yeah, it's an interesting part of the sector. As Ovi said, that is now a sector which has gone up to about $15 billion in terms of market cap. To put it in perspective, memes are about $100 billion. Obviously, Doge is the largest bit of that. The others, so the coins outside the top 10 is around $350 billion. And then the crypto market cap is above $3 trillion.

So in the context of maybe altcoins and the whole crypto market cap, I think we're all saying, you know, this stuff can go higher. It's still a show me story. And with the metaverse, this did all implode. You know, it was also a bit of a macro implosion, I would say, at the same time. Like meta changed its name, obviously. And then everyone was like, no, we don't want that. This feels slightly different in that every single one of the major firms in the NASDAQ

is talking about agents. Like this is, this is a, they were talking about the metaverse. They were all talking about the metaverse too. Car companies did their metaverse. I was, they all had web three like departments and then now they're all fired. They all had metaverse departments and they were, they were throwing parties in the metaverse for their staff and launching cars in the metaverse and fashion shows in the metaverse. Oh no, it was full mid curve, entire corporate world.

Well, maybe that's the case. I felt like it was, Meta was leading that one and then everyone hated them. This one feels like NVIDIA, Google, Meta, Microsoft, like every single one. But I agree with you. There was a little bit of Wagme vibes. It's Wagme vibes. It's Wagme vibes going on in AI right now. I am drinking the Kool-Aid. You know we're going to see

McDonald's chatbot talking to Starbucks chatbot saying, GM, my friend, you know, that shit is about to happen all over again from these agents. For sure. I was speaking to somebody who were involved in from a marketing perspective. He runs like Web3 agency and he was talking about that. Like you're going to see big brands come in with their mascots, their characters. And instead of having to launch a crypto coin,

you know, hey, we're going to launch an AI agent. And, you know, you're going to have AI agents for all the major brands. And so there is that sort of case as well. Like we're early to that. I haven't seen one person do that yet. No, but we will have that wag me friends, you know, between the brands. Yeah. I think it was.

And then you realize, oh my God, this is all wrong. Yeah. We're not there yet. In the NFT cycle, it started, let's say, in December 2020. Maybe I would say December 2020 was one of the bigger people drops. This started in October 2024. So we're kind of at that first stage of run up. Everyone thinks they're changing the world. We've had a little bit of a correction even over the last week or so.

I do still think that, you know, we've got to... This one will continue...

to run that's my that is my prediction for this year that this is not going to be a something that fades away i think this is going to be one that runs i agree with what ovi said in that it can go up and all the current coins may not be the most valuable thing if you bought nfts in february 2021 you were probably buying nifty gateway collections yeah and and they all went to zero like you can you can buy the wrong things if you buy them early i think um yeah

And NSE still went up to what I think 50 billion plus market cap at their peak. So it does, you have to be wary, but I can see this now being a very, very strong sector for a while, just because the mid curves are back. They're back.

They're investing. It's not just... I'm pleased you're admitting it's mid-curve now. We've got you to that part now. It's a vengeance. It's the vengeance play. Me and Ovi were saying it's the revenge play of the mid-curves in 2024, 2025. We've upset thousands of people watching this stream, by the way, because everyone's really passionate. When I wrote that little tweet about it, I mean, the amount of...

you're the mid-curve, you're a moron, everything. I mean, people have really invested in this space, so there's going to be a lot of people insulted because we're calling them mid-curvers now, but you're saying it's the revenge of them and they're going to win anyway. I don't know. The concept of using your brain has turned into an insult. You know what I mean? It's just like, oh my God, you actually just rationally thought through something. That's terrible. Yeah.

So embarrassing. Why would anyone ever do that? Yeah, for sure. It's become utility. Everyone has been burned so many times. And so the idea, when everyone starts bringing it back and says, we're going to change the world, if you've done a few cycles of this, it's just like, no, we're not doing this again. But, you know, every single cycle was a mid-curve and they often run for

12 to 15 months, these sort of mini-metas and stuff can go crazy and then everyone realizes at the end of them, the best thing to own was Fartcoin. But there's a long gap, I think, from here. Because Fartcoin, I mean, it's left, mid, right curve. It's the whole thing. It's a perfect package. It's really hard to fade something called Fartcoin that's already at a billion bucks or whatever. It's impossible to fade.

Filecoin's going low, man. 800 million. You can get in for Filecoin. I don't own any.

Should we move on to questions for the last... We've hit the two major topics. We've just been chatting away, having fun. Yeah, exactly. Before we do that, I just wanted to showcase some pro crypto content on Real Vision. Earlier this week, we had Ash Bennington speak with David Duong from Coinbase. They did a deep dive into the company's annual crypto market outlook. They also discussed crypto majors, deep ends, obviously AI agents, meme coins, and much more. So if you have a pro crypto,

crypto subscription on Real Vision, head over to realvision.com to check it out or also sign up. And yeah, let's move on to questions. Yeah, David's good. He runs Coinbase. Runs research at Coinbase. Awesome. Awesome. That was a good one to check out. Right, first question. This one's from William on the Real Vision website. Arthur Hayes projects maybe up to $600 billion in further liquidity by the end of April. And then that's it.

What do you guys think? So that's what he's doing. He's thinking about the draining of the TGA. And again, it's not US liquidity that matters. It's global liquidity. So I disagree. Because China needs liquidity or it's going to implode. It's literally going to implode. So you kind of know when you see the bond yields doing that in China, it's telling you that liquidity is the single most important thing. Can we focus on China a little bit? Because I just feel like it's in such...

crazy scenario here. Like you've now got to see deflation, property prices were crashing for many years before that, bond yields at all time lows, right? And this is a country with huge debt to GDP, particularly at some of the local government level as well. They've already been printing. Is it just, how does that story turn around? And the population is predicted to drop by many tens of percents by the end of this century. Yeah.

It doesn't turn around because it's all demographics. Always has been. You know, it's always been demographics. Now, China's demographics came later, but faster. So what we're seeing is the entire re-rating of all Chinese assets because of this. We've had it in Japan. We've had it in Europe. We've had it in the US, which has slightly better demographics. So...

We know the rule book. We know the playbook, which is you need to stuff everything on the balance sheet of the central bank. And then you just have to manage the debt refinancing cycle. And you're going to have to deal with slower GDP growth. It's like, we've seen the playbook. Japan has the way always. Well, Japan, everyone said, you know, robotics is going to be their savior. Now everyone's talking about AI maybe be the savior for China. Do you think, do you think, you know,

They can be saved in that way? Yes. I mean, that's why they're putting so much money into AI and robotics, because it solves your labor force problem. You know, I showed the chart, and I called it the world's greatest macro chart, and nobody understands this, is if you just take the labor force participation rate in the US and put the debt to GDP against it, inverted, they're the same chart.

So all the debt is a function of demographics. It's the same with China. The only way of solving this is AI and robots, unless you get everybody to have 17 kids, which ain't going to happen. That still has a 20-year lag before they become productive units. So yeah, and Japan is doing this too. They're right at the forefront of robotics as well. China's robotics is scaling at a terrifying speed. So yeah.

Yeah, everyone's pointing to drones, obviously, that they've got nuts on. They've got the humanoid robots as well. They've got, I don't know, 20, 30 startups that have them fully functioning already.

So Europe's the only place that hasn't really gone down the tech route, that's saved themselves. They've gone down the regulation route, which is always good to hear. Yeah, perfect. That's great for technological advancements. Our next question from John. I thought I had Jamie Coote say that Bitcoin tends to front run liquidity. Why does it appear that Bitcoin is currently lagging M2? Am I misunderstanding what Jamie has said in the past?

My understanding was that Bitcoin would lag M2 as well, but I don't know if... Yeah, I'm not sure. On a forward-looking basis, financial conditions lead everything. Then it's liquidity, then it's crypto. Yeah, that's my view too. All right, we'll move on to the next question then.

With quantum computing and its potential to crack Bitcoin cryptography, does it also have equal potential to crack traditional banking system too? There's been quite a lot of talk about this in the last few months with that new Google Quantum product that they launched.

I think the Nvidia CEO went on stage yesterday and said there's still a long way off, like quantum threats and stuff, and all the quantum companies drop like 40 or 50% in a day. In terms of Bitcoin, there is some debate that some of the older wallets, the ones that like Satoshi owns, could be at risk if it continues maybe at the current rate in like 10 years.

Although there is some debate, like they may be able to make some changes. I think Solana already this week said that they're upgrading to avoid like quantum threats. I think newer blockchains and that it won't be a problem. But there is a lot of talk about, yeah, you're going to have to, our current security standards will probably last us a decade or two and then we're going to have to continue to upgrade them.

And yeah, it'll affect the banks as well as it does everything. I mean, it affects everything, the whole internet. So everyone's aware. No knowns like this, like Y2K problems, stuff like that, they're not a big deal. Because there's a, you know, with $3 trillion locked in this, plus you take the entire Web2 industry, plus everything else, there's like $20 trillion at risk here without the banking system.

So of course, economically, you're incentivized to try and get quantum to break it, but you're equally going to create an arms race in defending it. So I think it's fine. Okay, next question. This one's specifically for you, Raoul. Bank of America just confirmed their position of no more rate cuts. Given what you're saying about Trump coming in, rates having to go lower with a lower US dollar, is Bank of America just flat out wrong?

I think rates do come a bit lower still. But as I've said, it's not about the US. Rates went up all the way through 2017. It's not about US rates. It's about global liquidity. That's the single most important thing for people to understand. Yeah. Okay, next question. What's your take on MadLads who looks like they're leading the NFT space on Solana?

You guys have any, any of your mad lads? They went higher this week. There is talk about backpack, which is the, um, talk about them buying the FTX Europe, the arm, which had like a, a, a pub license, um, out of bankruptcy. This week, there's been a debate about whether that trade has even happened. Um, the FTX state came, came out and said, yeah, no, this, this hasn't happened. Um,

So I don't know, but there is something, you know, maybe they've got an airdrop for some sort of future FTX Europe exchange. Backpack's been a relatively strong exchange, like at least a bunch of different Solana tokens. But yeah, that's why it's been strong. I don't think much else. NFTs, some of the more historic NFTs have done well recently. A lot of the ones that have been the...

meets NFT narrative has kind of taken off a little bit, but it's been a bit slower before again. Okay, next question. Would you, would be good to get your current thoughts and expectations on the performance versus sole

versus suey versus aptos aptos not one i've thought about but um soul versus who we've spoken about a lot on the show it just keeps going up i'm just full of the price yeah suey just outperforms it's eating everything right now so i don't think that narrative dies for a while and i don't see what takes it over yet there will be something yeah there's usually a bunch of chosen ones but suey just does nothing but outperform everything yeah it's definitely the price

Price coming first and then narrative sort of following that because I think the TVL is still not quite there but it's quite astonishing how much it continues to outperform like

all the other L1s on days where it pulls back and on days where it rebounds as well. I know. When it rebounds, it's quite shocking. Even I'm surprised. Everything else is up 1%. It's up 10%. I'm like, fucking hell. I don't know who's buying it, but somebody is. Sol to me looks so mispriced here. It really does. Everyone thought it's just for gamblers.

And then it picks up every new narrative that comes in. Sol has picked it up and wins in that narrative. At the moment, it's AI. And although the meme coins have gone slower, now it's all AI coins. And yes, BASE has had a strong footing there because it had virtuals. But Solana, again, has been incredibly strong. Do you think there's something...

more simple going on, which is these FTX unlocks. Yeah, the unlocks coming. I mean, these were huge if you remember. They cleared the market nicely so Solana could rally, but fucking everybody from Pantera to Brevin Howard to everybody have got

of dollars of this stuff. And they're all up like two. It's a narrative in my opinion. It's a 2% of Solana's market cap is coming in the next three months. And if you remember at the time of the sales, everyone was talking about, oh, they're being hedged. You know, like everyone was hedging pre then. So,

I don't really know if you can have your cake and eat it too and say like, oh yeah, well, you know, they've all got that to sale. Like I reckon a large bit of that was also, well, maybe not all of it, but a large bit was probably under some sort of hedging. It has felt heavy, right? It's not so heavy. It's felt heavy and I don't know why. Because as you say, every single thing is happening on Solana. It's like it's crushing it, but it's felt heavy.

So we said this, if you've been watching the show for a long time, me and Obi were very, very vocal about the fact that, you know, the December period would probably be a time to, or at least Q4, you could see Solana underperform and we were more blissful on Bitcoin and ETH. Now, I think that that underperformance has just gone way too far. For where Solana is, where it's beating ETH and base, even on DEX volumes, it's now dominating ETH

a uh a ai narrative not dominating but it's got a very strong footing in it it's been strong in memes and then you potentially have an etf coming you have polymarket saying an 85 percent of a solana etf coming um it's got a very powerful narrative i think and it's underperformed for a little bit too long i think solana looks really cheap about a hundred a suey of 50 i don't i don't think compared to what's happening on the two chains is now it's gone too far in my opinion

We'll see. I think once we get past this month and the fear of unlocks blows over because I think just like a lot of these big supply things that come to the market, they usually either have already traded or already been hedged. It's not like, oh my God, they're going to like, you know, sell billions of dollars of Solana in one clip and one go. Yeah. There's no other reality. But it gets, the fear of it gets priced in, I think, weeks before the event. And then usually, you know, I think that's the time to buy. I wouldn't be surprised if, I mean, at Sol ETH,

Soul Ethers down a ton in the last two months, whatever it is, two, three months. Moving Soul Ethers has been pretty crazy. So I'd be surprised if we didn't catch up. I think that sort of brings us to the hour and the end of the show, guys. Yeah, I think one thing is we're all seeing each other in Miami. So you heard, oh, you mentioned at the beginning, or Amanda did, is...

There are a few tickets left for the crypto gathering in Miami. There are events all over Miami from small events to volleyball, to dinners, to breakfast, to big parties. There's all the rock stars coming along. There's all sorts of cool, fun people that you know from the space that you see on Real Vision. You get to hang out with them, have lunch with them, have breakfast with them, have drinks with them. So listen, crypto gathering, amazing.

realvision.com forward slash CG 2025. It will be a lot of fun, I promise you. Yeah, you can even play a round of golf with me if anyone signs up to it. Please sign up to it so we can actually go and play golf in the morning. I'm not going to do that. I just...

You should get Kevin Kelly to play. Do you know Kevin? I think I was on a podcast with you guys once last year. Because Delphi have got... Delphi, right, yeah. Yeah, they're sponsoring a part of it and they've got some drinks. But Kevin likes golf. He's a really good guy and I can't stand golf. There we go.

There we go. Right. Well, thanks everyone for tuning in for the first show that we have 2025. Let's hope it's going to be a great year to come and plenty more banana action that we'll see in the days, weeks and months to come. But thanks everyone for tuning in. We'll be back again same time next week. It's 11.30am Eastern Time, 4.30pm Greenwich Mean Time and we'll see you guys next week. Ciao everyone.

So within this, we have parties. You can choose the VIP track and then you might be on a boat party and you're doing something else and going for a dinner there or meeting people in different venues and bars. So there's lots going on. It's like a mad treasure hunt. I like the idea of just hanging out with you guys, drinking a rum or a glass of champagne and putting the world to rights and just really celebrating you as our members and our community. And it's a thank you for that as well. It'll be an incredible event.

Listen, get your tickets quick before they sell out. This is the event you've been waiting for. Come and join us for the crypto gathering. We will have an absolute blast.

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