This episode explores the volatile crypto market, highlighting key events like the FOMC meeting, Trump's crypto address, and dramatic developments within the Solana and Hyperliquid ecosystems, offering crucial insights for investors.
Market Overview and FOMC Impact
- The hosts kick off by discussing the "choppy" market conditions, noting a relatively bullish FOMC meeting where the pace of Quantitative Tightening (QT) was reduced. QT is the process where the Federal Reserve reduces its balance sheet, effectively decreasing the money supply. Despite this, the market remained uncertain, with Ethereum's pumps often preceding downturns.
- Sam highlights the psychological aspect, stating, "if you think the bull Market's back on everything's going to new all-time highs...you might think that could be ethereum," explaining why people might FOMO into Ethereum at inopportune times.
- Ton (TON) was a notable outperformer, up 35% for the week, following a $400 million raise announcement and positive news about its founder, Durov.
Trump's Crypto Address and Market Sentiment
- The discussion shifts to former President Trump's address at a crypto conference, a historic first for a sitting president. While the address was brief, Trump hinted at stablecoin legislation and expressed a general desire for market growth.
- Jordan notes Trump's alignment with rising asset prices: "he wants the S&P 500 to go up he wants Bitcoin to go up you know he's sort of attached himself to to these ships."
- However, Jordan also cautions that "money doesn't grow in trees," implying that sustained market growth requires more than just positive sentiment.
Federal Reserve's Actions and Projections
- Jordan, described as the "macro trader," provides insights into the Federal Reserve's recent actions and economic projections. The Fed's inflation expectations have increased, potentially spooking markets.
- The Fed projects 2.8% inflation from March to the end of 2025, close to their 2% target, but the upward trend raises concerns.
- Jordan explains that even small deviations from the 2% target were significant before the COVID-19-induced inflation spike.
- The market is eagerly awaiting rate cuts, but with a stable unemployment rate, the Fed is not in a rush.
- Trump's public pressure on the Fed to cut rates, as evidenced by his tweet, adds another layer of complexity and potential market volatility.
Solana Ecosystem Drama: Advertising and Competition
- The conversation turns to the Solana ecosystem, starting with a controversial advertisement that received widespread criticism.
- The ad, attempting to be politically relevant, was poorly received, with even Solana's founder, Anatoli, expressing shame.
- The hosts discuss the ad's misfire and Solana's apparent shift in political stance, contrasting it with their previous support for social justice movements.
- Simultaneously, a rivalry is brewing between Pump.fun, a meme coin launchpad, and Raydium, a decentralized exchange (DEX) on Solana.
- Pump.fun is launching its own DEX, competing directly with Raydium.
- Raydium is retaliating by releasing its own launchpad, escalating the competition.
- Tyy, known for his DeFi expertise, points out that longing Raydium was always a known risk due to Pump.fun's potential to compete.
- Pump.fun's revenue has decreased significantly from its peak, but it remains a highly successful crypto business in terms of fee generation.
Hyperliquid Whale Drama and Market Manipulation
- The discussion delves into the ongoing drama surrounding a whale on Hyperliquid, a decentralized perpetuals exchange. This whale has been making enormous, publicly visible trades, causing significant market impact.
- The whale initially made $4 million by exploiting Hyperliquid's mechanics, withdrawing unrealized profit and then allowing positions to be liquidated.
- Derivatives are a zero-sum game (excluding fees), meaning one trader's loss is another's gain.
- The whale's actions negatively impacted the Hyperliquid vault (hLP), leading to changes in leverage limits.
- The whale is suspected of using Hyperliquid as a smokescreen, counter-trading larger positions on centralized exchanges like Binance.
- The permissionless nature of Hyperliquid makes it difficult to prevent such manipulation, unlike centralized exchanges with position limits.
- The whale's recent activity includes Bitcoin trades, and he has created a Twitter account, seemingly to gain social media clout.
- ZachXBT, a well-known on-chain sleuth, has exposed the whale as a potential fraudster, challenging the whale's narrative.
- Jordan emphasizes that large traders dislike having their positions and liquidation levels publicly displayed, suggesting the whale's actions are performative.
- Hyperliquid is introducing trading discounts for staking its HYPE token, similar to Binance's BNB model, to increase token utility and potentially boost trading volume.
Meet The Lads: Tyy's Journey
- The episode features a "Meet The Lads" segment with Tyy, a crypto content creator. Tyy shares his personal and professional journey, from his early life in Japan and the US to his foray into crypto.
- Tyy's early life was marked by challenges, including his mother's passing, which motivated him to excel academically.
- He pursued a business degree at Berkeley and initially worked in the food industry before the COVID-19 pandemic disrupted his plans.
- Tyy transitioned to online poker, leveraging deposit bonuses and building a bankroll.
- He entered the crypto space during DeFi summer, influenced by his poker friends, and gained prominence with his Polygon farming videos.
- Tyy reflects on the ups and downs of the crypto market, including his experiences with Terra Luna and the subscriber losses during the bear market.
- He emphasizes his resilience and commitment to the crypto industry, highlighting the value of helping others and building connections.
- Tyy discusses his future aspirations, including creating broader media content and potentially writing a crypto-related show.
- He shares his best and worst trades, highlighting the importance of risk management and detaching from ego-driven decisions.
Pasta of the Week
- The hosts share their "Pasta of the Week," humorous or absurd takes from the crypto community.
- Justin presents Jason Calacanis's controversial tweet suggesting Bitcoin should be replaced, drawing widespread criticism.
- Tyy shares his own humorous tweet questioning whether his Ethereum balance would increase with the price, receiving a response from Coinbase support.
- Jordan presents a tweet from Truth Terminal, the creator of the AI coin Farcaster, expressing frustration with those trying to exploit the project.
Reflective and Strategic Conclusion
The episode underscores the unpredictable nature of crypto markets, emphasizing the need for adaptability and informed decision-making. Investors and researchers should closely monitor emerging trends, protocol developments, and potential market manipulation to navigate the evolving landscape effectively.
