Summary

The near-term setup is bearish for broad risk, and Bitcoin lacks enough “idiosyncratic juice” to escape a serious equity drawdown. Middle East conflict lifts oil through perceived Iran risk just as bond prices fall, yields rise and the market retreats from an aggressively priced soft landing; Avi attributes part of BTC’s 30-day decorrelation to Saylor’s buying. The instruction is blunt: “Don’t fight the flows.”
Avi would buy BTC below $25,000, expects that entry to “look like a genius in a year,” and prefers patience plus short-dated protection before then. Buying around $27,500 and watching $24,000 or $22,000 can damage conviction; two- and four-week puts look attractive while implied volatility is low. Avi’s longer-term bull case is that global disorder favors an impartial reserve asset, while election-year stimulus after housing stress could put BTC at $100,000 or higher.
The bullish catalyst is not the calendar: another 2024-25 cycle is possible, not guaranteed. Both hosts can see crypto gaining 10x over three to five years, but Avi raises the probability of sideways action for a substantial period, with Bitcoin’s larger role potentially arriving in 2026 or 2027. Jonah’s warning is that investors may believe the destination yet still get “thrown off” the mechanical bull.
ETH is the weaker near-term asset because capacity expanded far faster than demand while multiple sellers meet a thin fee market. Gas was around 9 gwei versus 15-16 gwei for the inflationary/deflationary flip, L2s moved transactions rather than multiplying them 100x, CryptoPunks fell 20% in ETH and Jonah says an FTX-related holder was out of roughly half of 180,000 ETH as of recording. Avi is bearish on ETH/BTC, while Jonah says 0.05 is the level for ETH/BTC to become a “giga.” Avi’s Kelly framing makes a short much less attractive near $1,400 and puts an absolutely dire flush below roughly $1,200; Jonah sees roughly $1,100 as a floor. A weak ETH futures-ETF launch reflects a poor, contango-exposed product in a down market, not proof that crypto is doomed.
Stablecoins reveal genuine global dollar demand alongside a bearish drain of deployable crypto liquidity. Since January 2023, USDT grew from $65 billion to $85 billion while USDC fell from $40 billion to $25 billion; Avi argues USDC contracts partly because it is the easiest redemption bridge into actual dollars. Jonah’s framing is product-market fit: technically better USDC serves developed markets that need crypto less, while Tether serves emerging-market users seeking dollarized value.
Crypto’s missing upside catalyst is application demand, not base-layer capacity alone. Stars Arena showed Avi that a product could improve on Friend.tech, but two hacks also proved Jonah’s objection: “If it didn’t get hacked—that’s a big if.” They want five to ten secure, user-friendly products run by competent operators, with gaming, social finance, tokenized securities and on-chain treasuries the leading candidates.
This is an asymmetric-upside market, not a clean market-neutral one. FTX trapped funds on what had been an effective venue for shorting, while trades such as short DOT versus long ETH lack an efficient short leg elsewhere. Jonah’s conclusion: crypto is for “the big wins,” not trying to “dance between the raindrops”; survival and patient capital matter more than capturing every $100 move.

Deep dive

1. Oil is pricing escalation risk, not yet a physical supply shock

Avi opens with the anomaly: defense shares rallied—Lockheed about 11% at the peak—and oil rose even though neither Israel nor Gaza produces oil. Jonah calls it “a knee-jerk reaction,” reflecting regional escalation risk rather than the direct loss of barrels.
Jonah’s load-bearing mechanism is Iran. Perceived Iranian involvement could derail US diplomacy aimed at lifting sanctions, reducing the prospect of freely exported Iranian supply and lifting benchmark prices; yet Iran “is quietly exporting all of their oil anyway, or close to it,” so the physical balance might barely change.
Wars consume petroleum, but Jonah says Israel is too small for that channel alone to matter; a China-India mobilization would be different. Avi widens the lens: higher oil reinforces inflation as bond prices fall and yields rise, with delayed damage to the real economy after markets aggressively priced a soft landing. He wants aggression only when “everybody and their mother” says recession is unavoidable.

2. Bitcoin needs a better entry before disorder becomes its catalyst

BTC rose while the S&P fell over the prior 30 days, normally a bullish decorrelation, but Avi partly credits Saylor’s buying. Momentum buyers have become sellers, value buyers do not appear aggressive above $25,000, and—with the Grayscale lawsuit resolved—the ETF is the only positive catalyst he sees.
Avi’s positioning follows directly: two- and four-week puts while volatility is low, then length below $25,000. His concern is behavioral as much as numerical—buying $27,500, suffering $24,000 and then seeing $22,000 can leave an investor “psychologically tormented” precisely when conviction is needed.
Avi’s long-term inversion is that terrible global conflict can be good for Bitcoin because it is “an impartial reserve asset” outside sanction politics. If high rates and mortgages eventually crush home prices, he expects an election-year government to choose stimulus and money printing over forcing homeowners to take the medicine—potentially sending BTC to $100,000 or higher.
That hedge does not immunize BTC today: the equity market is leaning on AI mania, and risk could “tank pretty hard.” Although both hosts envision 10x over three to five years, Avi rejects the assumption that history guarantees a 2024-25 bull run; Bitcoin’s larger role might arrive in 2026 or 2027.

3. Ethereum’s scaling success created a capacity glut

The surface data are bleak: CryptoPunks fell 20% in ETH over a few weeks, while gas sat near 9 gwei versus 15-16 for the inflationary/deflationary flip. Jonah says an FTX-related holder had 180,000 ETH and was out of about half as of recording. Avi also notes that ETH is in more trouble than BTC but is more heavily shorted, so the positioning cuts both ways. The foundation’s $2.5 million sale was small, but its reputation for selling local tops made the signal self-reinforcing.
Avi’s base-layer case is harsher: throughput increased 100x, but transactions did not come close to increasing 100x. Activity moved from Ethereum to Arbitrum, Base and Optimism without comparable aggregate growth, leaving fees and the expected deflationary thesis weak. He therefore remains bearish on ETH/BTC; separately, Jonah says 0.05 is the level for ETH/BTC to become a “giga.”
Jonah explicitly changed his mind. He expected L2s to resemble California freeway lanes, where added capacity induces more traffic; instead they resemble Permian pipelines built into a temporary bottleneck, followed by too much capacity and too little oil. “There’s no OPEC for ETH,” though demand might eventually return if the network becomes cheaper and better than AWS for a use case.
Both separate “bearish now” from “ETH is over.” Avi’s Kelly-criterion framing says a short can look excellent near $1,600 but frightening by $1,400, with a move below roughly $1,200 requiring an absolutely dire liquidation flush. Jonah sees roughly $1,100 as a floor and expects the main battle around $1,500-$1,650. Today’s capitulators may proclaim ETH the future again if it reaches $5,000 in 12-24 months.
Jonah calls the ETH futures ETF a poor product in a down market because of contango and roll yield, so its weak launch does not prove crypto is doomed. Avi adds that BITO’s price-only underperformance versus Bitcoin is something like 30%, but dividends and cash distributions reduce the gap to roughly 10%—still very bad.

4. Tether growth and USDC contraction describe the same dollar trade

Avi applies “bad money drives out good money” to users in China, Russia and elsewhere seeking dollars. His proposed route: source USDT locally, exchange it through Binance, OKX or Huobi into USDC, send that to someone with Coinbase access, redeem into dollars, and purchase US assets or goods. USDC shrinks because it is the superior exit rail.
Jonah’s pushback—worth keeping—is that USDC may be technically better while targeting the wrong demographic. Developed-market users already have stable currencies and bank accounts; emerging-market and underbanked users need crypto’s dollar access. Since January 2023, Tether rose from $65 billion to $85 billion while Circle’s USDC dropped from $40 billion to $25 billion.
Avi turns that contraction into a positioning signal. He tracks stablecoin balances among active trading wallets: unusually high balances mean a buy signal, while unusually low balances suggest little fiat remains to absorb buying or selling. In aggregate, “there’s been a drain,” supporting patience and the bear view.

5. Applications must turn cheap blockspace into asymmetric upside

Avi’s reason for focusing on applications is potential decorrelation: BTC might fall 15-20% over a year while an individual product rises 100%. Stars Arena on Avalanche had a better feed and messaging experience than Friend.tech, but he would not put real money there after two hacks—the product insight survived; the investability did not.
Jonah’s rebuttal is the episode’s quality threshold: “If it didn’t get hacked—that’s a big if.” Crypto needs five to ten excellent new products that are secure, user-friendly and led by competent operators. Lower prices may help by replacing 2021-style valuation excess with better stewardship.
One game could generate more transaction volume than a network had seen in its entire history, Jonah notes. Avi ranks gaming and SocialFi as plausible, but sees tokenized stocks, bonds and treasuries as potentially larger: Goldman was trying to launch a money-market fund in Q1 of the following year, while Canto was teasing a treasury product that might permit leverage. Whether those products are composable remained uncertain.
Jonah closes by rejecting fragile market-neutral sophistication. FTX was ironically one of the best places to short crypto before trapping assets, and a trade like short DOT versus long ETH still lacks an efficient short venue. Investors need exposure for “the asymmetric upside,” enough durability to survive periods like this, and backers committed to crypto for the long haul.

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