Is It Time to Rotate Out of Crypto?

Summary

• The rotation call: Avi turned cautious the morning of recording because “the equity markets are up, gold is ripping, everything is ripping except for Bitcoin and Ethereum and Solana” — a divergence that “suggests a good amount of weakness” and forces the question “does this mean we’ve run out of buyers?” Two days earlier he’d have said BTC hits 150 before 100; now he’s “flip-flopping a bit on my bullishness” and guesses crypto is in for a snooze of two to three months, maybe with reversion.
• Avi’s guidance is to trim alt leverage, concentrate winnings into BTC, and diversify some capital out of crypto — he added more Robinhood and bought Tesla for the first time, while holding gold and uranium miners (URA). The kicker: Robinhood did a 4x off the tariff lows vs. ETH’s 3x — “altcoin-like returns from assets that actually have real revenues.”
• Jonah’s pair-trade postmortem: long Aerodrome / short ENA got him “eviscerated” on Twitter, but the numbers stand — ENA at $11B FDV on $28M annualized revenue vs. Aerodrome at ~$2B FDV on $178M revenue. He never put on the short (“since we’re in a bull market, it doesn’t make sense to short something even if I don’t like it”) and the AERO/ENA ratio is up ~20% since the tweet. Avi’s read on the vitriol: “a lot of people got very angry with you over the idea of shorting something. And that to me tells me it’s overowned.”
• DATs are a decaying trade. Avi front-ran the Solana DAT flows — long from 194 calling 250-260, out at 226 for 15% — but “the game has become known,” leakage is rampant, and tradfi inflows to the Bitcoin and Ethereum DATs are waning. Jonah’s frame: DATs are “a sugar high… the version at today’s institutional scale” of 2021 retail lifting VCs out of their bags. If they ever flip to forced sellers “it’s going to get really ugly” — but he’s not scared right now, because a treasury “is not an active vehicle, a treasury is a vault.”
• The lower-high debate is the tradeable disagreement: Avi says ETH failing at 4,800 vs. the 5,000 high is the warning, since “ETH is the bellwether for the alt market.” Jonah’s pushback — a May ETH lower high (~2,400) “immediately preceded a face-ripping rally” to $5,000. Avi’s counter: the June 16 lower high preceded a 20% drop first, and in that drop “alts are going to be going down 50%.”
• Jonah’s structural case for staying long anyway: crypto is an “episodic macro asset” that’s currently “dancing to the beat of its own drummer” — decorrelation from equities is healthy, correlation is what marks “bad times.” The long-run bid is institutional adoption as “a slow drum beat” (NASDAQ 2000-2025, not a mania) plus the boomer-to-crypto-pilled-generation inheritance — “the biggest wealth transfer in the history of humanity.”
• Avi’s non-crypto book, with theses: HOOD on global gambling culture, gold as “front-running the biggest DAT in the world, which is the central banks” (Shanghai warehoused gold 7x’d in a year), and uranium miners on energy-independence politics flipping in Canada and Germany. Jonah’s commodities caveat — never underestimate supply innovation (shale) — is exactly why you buy miners, not spot; gold is the commodity that seemingly can’t be overproduced.
• Tesla is the consensus trade of the episode: “humanoid robotics is going to be the biggest product ever and Tesla’s kind of the only pure-play expression of it.” Jonah adds the retail edge argument — no risk manager tapping your shoulder, and sell-side analysts are “herd animals” whose targets are structurally too low — so a 12-36 month horizon with stomach for drawdowns beats most institutions.

Deep dive

1. Everything is ripping except crypto — have we run out of buyers?

• Avi’s thesis formed the morning of recording: “SPY up half a percent, NASDAQ up almost a percent, and Bitcoin down or not moving — you have to start thinking, okay, does this mean we’ve run out of buyers? Does this mean people don’t really want to buy Bitcoin at 115?” Until that morning he was more bullish; the divergence flipped him.
• The honest flip-flop, kept as hedged: two days earlier, asked whether BTC goes to 150 or 100 first, “I would have said probably 150. Now I’m like, I don’t know… Maybe I’m reading into it too much.” His guess is now a two-to-three-month snooze with possible reversion, because “if the DATs aren’t taking this higher… who’s going to be allocating into crypto right now? And the answer is I don’t think anyone.”
• Jonah’s meta-point on why this episode exists at all: nobody reads a note that opens “snoozer again” — “markets are always interesting… you just have to dig a layer or two deeper and there’s always something awesome going on.”

2. The AERO/ENA pair trade the internet hated — and what the hate revealed

• Jonah’s thesis: Aerodrome fits the venture-bet framework — ~$1B effective valuation (FDV ~$2B, but locked tokens make market cap the better metric), $178M annualized revenue, “the best architected AMM DEX,” positioned for new market creation (“prediction markets, commodities on chain… settled by an AMM DEX”). ENA: $11B FDV on $28M revenue — “freaking insane” per Avi — with “too much of a hangover from the Anchor protocol” for Wall Street to fund a restaking engine.
• Avi’s pushback, worth keeping: he didn’t love the pairing — “two completely separate trades because they’re not really in the same bucket.” Jonah’s concession-with-a-limit: “not apples to apples, but they’re still both pieces of fruit — we’re not comparing apples to tractors.”
• The outcome: ENA ripped days later on a DAT announcement (“it ripped specifically because you got unlucky,” says Avi, who suspects the hate was “astroturfed by ENA shills” front-running leaked news). Jonah never shorted — the feedback taught him “since we’re in a bull market, it doesn’t make sense to short something even if I don’t like it” — and the AERO/ENA ratio is still up ~20%. Avi’s signal extraction: anger at a short thesis means the token is overowned.
• On eating flak publicly: “90% of the vitriol came after I was proven wrong for a few percent on a trade I didn’t even put on,” Jonah notes. “I want to debate ideas. I don’t want to debate my IQ level with some anon.”

3. DATs: a known game gets front-run to death

• Avi’s Solana trade is the specimen: after digging into the Galaxy DAT’s cash pile he called SOL “a good long to 250, 260” at 194 — it hit 250, he exited at 226 for the 15%. “That’s what these DATs are being used for right now — you just front-run the flows.”
• But the trade is decaying: “the game has become known, which makes it a lot less interesting to play.” There’s heavy leakage, tracking tools everywhere, and “waning interest” in inflows to the Bitcoin and Ethereum DATs. His conclusion: the trickle slows, some reversion comes, and right now he’s “a lot more interested in the stock market and the things popping off organically” — specifically copper and uranium miners outperforming crypto over the next two to three months (Jonah pins him down: not commodities broadly, and only on that horizon).

4. The ETH lower high — the episode’s real disagreement

• Avi’s alarm: ETH printed a lower high — up to 4,800, no retest of 5,000, then a 5% selloff — and “ETH is the bellwether for the alt market.” The playbook: bring down alt sizes, cut leverage, “concentrate any profits and winnings into BTC because the market is slowing down.” Asked what happens to alts if BTC drops 15%, Jonah asks whether they go down more than 15%; Avi says, “They come down a bit.”
• Jonah’s counter, framed as debate not dismissal: in May, ETH peaked at 2,800, puked to ~2,100, forged a lower high at 2,400 — “you could have made that exact same argument right before it gassed up to $5,000 a token.”
• Avi’s rebuttal keeps both truths: the June 16 lower high did precede a doubling — but only after a 20% drop, “and if you’re a trader you want to avoid being in alts for that 20% drop, because they’re going to be going down 50%.”

5. Crypto is an episodic macro asset — and decorrelation is the good news

• Jonah’s signature framing: “Crypto is an episodic macro asset like commodities… sometimes it trades like the euro, sometimes it trades like the stock market, sometimes it just completely dances to the beat of its own drummer.” Correlation with equities is what worries him — “you get none of the asymmetric upside associated with the technology, all of the downside of macro fears.” Right now it’s dancing alone, which “means we’re in a bull market for risk assets more broadly.”
• The medium-term bid isn’t DATs: “DATs are like a sugar high… the version at today’s institutional scale” of 2021’s retail “lifting VCs out of their bags.” Real adoption is “a slow drum beat in the background” — not a white-hot mania like VCs on AI now, but “more like what happened to the NASDAQ from 2000 to 2025… gradual appreciation. It’s hard to fade something that powerful in the long run.”
• Two wealth transfers underpin the hold: OGs and VCs selling to DATs — “tokens going from the hands of people who want to sell to people who just want to hold… a treasury is a vault” — with the stated tail risk that if DATs become forced sellers “it’s going to get really ugly” (a scenario that has scared him before, “I’m not scared right now”). And the mega one: tens of trillions passing “from a no-coiner generation to a crypto-pilled generation… the biggest wealth transfer in the history of humanity.”

6. Avi’s rotation book: altcoin returns from things with revenues

• The observation driving it: “the world has converged… we are able to invest across the board and get similar-size returns.” ETH is a 3x off the lows; Robinhood did a 4x off the tariff lows — “literally altcoin-like returns from assets that actually have real revenues.”
• The book and its theses: NASDAQ/S&P index; HOOD as “a bet on the increase of gambling culture around the world,” with a social feed launching; gold as a five-year bet on a fractured world — “you’re front-running the biggest DAT in the world, which is the central banks,” with Shanghai-warehoused gold up 7x in the last year; uranium via URA on politics flipping — Canada and Germany “changing their tune” because nuclear is “the only way to be energy independent.”
• Tesla, bought Friday for the first time: “there are no other public companies where you can get access to the robotics revolution.” Jonah agrees “as a vibes play” — “humanoid robotics is going to be the biggest product ever and Tesla’s kind of the only pure-play expression… what else are you going to buy, some weird Chinese humanoid robotics company?” (Elon buying stock for the first time since 2020 helps.)

7. Where retail actually has edge — and the commodities trap

• Jonah’s decomposition of Avi’s stock edge: short-term, none — “I don’t like going head-to-head with RENT [likely Renaissance].” Long-term, real: no risk manager tapping your shoulder, no benchmark-driven firing risk, so you can stomach drawdowns institutions can’t. Plus the analyst arb: sell-side researchers are “herd animals… research is not for the doers, it’s for the recommenders” — even their boldest targets are structurally too low. “A 12-to-36-month time horizon and stomaching heavy volatility already puts you ahead of most institutions.”
• The commodities warning Avi’s uranium thesis needed: “if you want to be long one thing in this world, you want to be long human innovation” — when a commodity rips, producers invent supply, like shale drilling “down a mile and then sideways 16 miles to suck a paper-thin layer of oil the size of Texas out with a straw with an L-shape in it.” The answer in the exchange is miners, not spot: Jonah says he is also doing this with copper, and Avi clarifies that URA is mostly miners, with some spot. The apparent exception is gold — “such a mature market… more been overexplored than underexplored,” and the companies seemingly can’t overproduce it.
• The rare-earths coda: Jonah’s friend trades them physically (“goes to the Congo for business trips”) — “we muggles hear about rare earths when they’re hot,” but it’s a boom-bust, illiquid business with limited financial hedging. Both concede it “might be in a moon phase right now” — humanoid robotics needs “a lot of magnets, a lot of actuators, a lot of electric motors.”