AI Nerves, Crypto Realism, Privacy Coins, & Lessons From Trading
- •Regime shift to fundamentals: Avi and Jonah agree crypto is decoupling, with a K-shaped market where cash-generative, user-growing products rise while most tokens structurally decline.
- •Bitcoin as IPO moment: Jonah frames current OG selling as early insiders handing wealth to new entrants, not a terminal top, reinforcing a long-term accumulation thesis on majors.
- •Dip-buying playbook for majors: Avi highlights larger, slower institutional flows now create buyable two to three sigma down moves in Bitcoin, ETH, and even Salana, unlike prior retail-driven cascades.
- •Shorts must be tactical: Avi stresses shorting only works with flow-based edges like predictable sell pressure and pairs against Bitcoin; investing in shorts is a path to ruin.
- •L2s are uninvestable, apps matter: Jonah argues there is excess blockspace and scarce users, so capital should favor applications with organic activity over new L2 narratives like Mega ETH.
- •Privacy narrative is durable: The Zcash move has reawakened attention on privacy. Avi and Jonah see a multi-cycle trend, but warn against chasing highs and emphasize Monero’s practical use and cautious entries.
- •NFT value convergence: Jonah sees PFP premiums compressing toward traditional art economics. Supply dilution and fading cultural meta drive rotation from trophy assets to productive tokens.
Market Regime Shift and Dispersion
Avi’s core thesis is playing out in real time. The market is less correlated, and returns are bifurcating. He points to products with real users and cash flows that hold or rise despite broader drawdowns, while most tokens bleed. Jonah extends the analogy to public equities. This cycle is no longer about blanket alt seasons. It is a stock-picker’s market, with only a handful of winners and many permanent zeros. The implication is clear. Anchor on fundamentals, not narratives, and be prepared for multi-month dispersion.
Bitcoin’s “IPO Moment,” Risk-Reward, and Dip-Buying
Jonah views heavy OG distribution as analogous to an IPO handoff from insiders to a broader base. That does not cap upside. He argues Bitcoin’s reward has compressed since 20k, but risk has fallen more. The chance of a terminal failure is de minimis, so drawdowns are buyable. He would allocate aggressively if Bitcoin revisited the 70k area without a structural failure. Avi adds a tactical layer. With larger institutional participants, sharp 10 to 20 percent single-day dips in majors tend to be bought, unlike prior retail-driven cascades. He notes an ETH drop of about 20 percent into the 3k area offered a fast 20 percent bounce. The new regime rewards buying two to three sigma dips in Bitcoin, ETH, and to some extent Salana, while remaining skeptical on alts.
Shorting, Flows, and VC Unlocks
Avi emphasizes that you cannot invest in shorts. You can only trade them tactically with clear flow edges. He cites examples like persistent token supply from programs dumping tens of millions per week, or event-driven overreactions where a 40 percent spike on thin news can be faded for 10 percent intraday mean reversion. He discourages outright USD shorts because the everything bubble can lift beta, and he prefers pairs shorts versus Bitcoin to reduce directional risk. Jonah explores systematizing VC unlock shorts, but Avi notes real edge requires messy, manual work to estimate actual sell-through, not just schedules. Both align that pairs and flow-aware shorts can work, but liquidity, borrow, and surprise risk limit scalability.
L2s versus Applications
Jonah calls L2 tokens uninvestable in this environment. There is ample blockspace and not enough users. 2021-style congestion is not the present bottleneck. He dismisses the Mega ETH hype, even with a prominent name attached, and argues the world needs products people actually use rather than faster empty rails. He prefers assets linked to growing onchain activity and fees, highlighting Aerodrome’s positioning for institutional onchain flow and contrasting it with ENA, where valuation and unlock overhang create headwinds. The message is to fund demand, not capacity.
Privacy Coins and the Zcash–Monero Debate
The recent Zcash move rekindled privacy as a core use case. Avi explains Zcash’s advanced shielded design and historic trusted setup concerns, versus Monero’s obfuscation approach that some believe is theoretically crackable with large resources. Jonah stresses price led the Zcash narrative, not new fundamentals, and warns against buying highs. Both think the privacy trend is durable as seizure and surveillance risks rise, but entries matter. Jonah floats enterprise privacy like Canton as a parallel, yet questions retail investability. Avi notes practical exposure today can be as simple as buying Monero where reputable venues list it. The investable takeaway is to respect the theme, avoid performance-chasing, and prefer assets with proven utility.
NFTs, Identity, and Portfolio Discipline
Jonah argues PFPs are structurally depreciating toward art-like economics. Too many CryptoPunks relative to demand creates persistent net supply. He sold his Punk to redeploy into hyperlquid and other productive bets, framing it as removing a cognitive and capital drag. Avi and Jonah share trader psychology lessons. Forget losses, retain lessons, and change your mind quickly. Win big, lose small. Jonah quotes match-level math where excellence comes from small edges compounded over many iterations. The practical lesson for this cycle is to rotate from status assets and narrative shells into fee-generating protocols with exogenous buyers or real usage.
- →Monitor flows-based short edges like predictable token supply, plus pairs shorts versus Bitcoin, while avoiding naked USD shorts in a rising beta tape.
- →Prioritize applications with fee capture and user growth over L2 capacity plays, and treat new privacy assets as a buy-the-dip, not chase-the-highs, theme.
- →Use two to three sigma drawdowns in Bitcoin and ETH as accumulation windows, reflecting the slower, institutional character of this market.