What To Own This Cycle?

Summary

• The weekend dump to $113K was a leverage reset, not a structural break. Avi’s evidence: from July 23–28 funding rates sat above baseline while open interest built with Bitcoin going nowhere — “if you’re seeing people pile on leverage into something and it’s not going up, maybe it’s time for a little bit of a breather.” Everything in the three-month thesis is intact; ETH had already retraced 70% of the move.
• Timing call: August slow, then “pretty crazy action” September–November. Jonah’s inning math: bull markets get volatile in the seventh or eighth inning of time, but in crypto that’s “probably the second inning of price” because parabolic moves come at the end — selling here and watching Bitcoin pump to “140 to 180K” is the kick-yourself scenario. Jonah sees no long-term bearish case before the midterms.
• Bitcoin ETF flows are now a weak signal. The $1bn of Thursday–Friday outflows aren’t necessarily just retail capitulation: the growth rate of sticky, under-allocated capital “has slowed dramatically” and what moves now is traded capital that re-buys lower or higher — “it doesn’t really mean anything.”
• ETH is a pure flow trade, and Jonah capitulated on air. Avi (a public ETH bear, “still yes” on fundamentals) says treasury-company bid gives ETH alpha in the middle band: if Bitcoin sits 112–118 for a month, “ETH can put in 15 to 20%, even if Bitcoin’s down 2%.” Jonah levered long ETH against his Bitcoin mid-episode — “even though I feel disgusting being long ETH.” Avi’s warning stands: those treasury companies “will get structurally important and they will blow up at some point. I’m saying it now.”
• The organizing thesis: “this is an institutional cycle” — own what institutions will buy. Crypto-natives are losing (memes clobbered); the winners are Bitcoin, public crypto companies, then ETH and Ripple as the second- and third-most institutional assets — Avi says you “probably want to own” that portfolio “until those flows subside.” Avi’s flyers on the same logic: Ton (a Telegram treasury company feels “almost unfathomable” not to happen) and Litecoin, +20% off the weekend lows as “the silver to the Bitcoin gold.”
• Crypto equities now trade like meme stocks — Galaxy is the best set-up, Coinbase a fade. Coinbase went $254 → +72% in a month (July 18 top) → −30% in three weeks with “nothing to do with crypto volumes”; Avi thinks he bought COIN puts Friday morning. Galaxy checks every GameStop box — meme-bait name, Novagratz on CNBC, crypto×AI data center, and a written fundamental case — with binary earnings ahead: bull posting to $40 from $29, or down five-six bucks “and then it’s probably a buy.”
• Jonah calls XRP “a total scam” — Avi’s rebuttal: it can fake it till it makes it. The bridge-token pitch is “obviously nonsense,” but Ripple’s war chest bought Hidden Road and Avi guesses an IPO announcement by year-end: “if Ripple Labs goes public, Ripple Coin is going to the freaking moon.” The caveat is opportunity cost — XRP just lost 35% (3.60 → 272) while Bitcoin gained 5%: “winnow down… come up with your top 10 bets and invest in the top two.”

Deep dive

1. The flush to $113K was hygiene, not thesis damage

• Jonah’s read on the weekend panic: “amateur hour on crypto Twitter.” The run to 118K onboarded “a new wave of 17-year-old crypto gamblers” whose only framework is green candles bullish, red candles bearish; the retrace to 113K came on data “really not that meaningful to the long-term thesis” (payrolls, Trump not chickening out stuff) and mostly cleaned out unhealthy positioning — fresh coin bought on highs, leverage added on highs. “The people who are scared right now are scared for reasons that they’ll have totally forgotten about if we’re trading at 118K again.”
• Avi’s confirming data: July 23–28 showed funding rates above baseline and open interest building while Bitcoin went sideways — “that tends to be a bad sign.” Both have since come off. Equities contributed (S&P −3.5% on tariff rattling, now bouncing), ETH is up 5% and has already retraced 70% of the down-move. “This is not a structural change in the market.”
• The calendar call: avoid major trades in August — “participants are out in Long Island eating lobster rolls” — then September through November brings “some pretty crazy action.” Jonah’s framing for holding through chop: bull markets get volatile in the seventh or eighth inning of time, but in crypto that’s “probably the second inning of price” — the shame case is selling a $5K dip and watching it “pump straight to 140 to 180K.” No long-term bearish trigger until the midterms, “another year plus.”

2. ETF flows are now a weak signal

• The 1000x agent flagged ~$1bn of outflows across Thursday–Friday ($812M also cited). Avi’s structural explanation: the ETF’s edge was a growth rate of sticky, under-allocated capital migrating in daily — that rate “has slowed dramatically,” and today’s flows are mostly traded capital that re-buys where it sold or lower. “It doesn’t really mean anything… it just kind of tells you what that day’s price action is.”
• Jonah adds the basis mechanics: when Bitcoin rallies, basis widens, arbitrageurs buy the ETF against futures — so flows are now a knock-on lagging effect, not a lead.

3. ETH: beta at the extremes, alpha in the middle — capitulation live on air

• Jonah’s provocation: the ETHBTC chart looks like the BTC chart — “is ETH just levered Bitcoin right now?” Avi’s answer: beta if Bitcoin moves big either way, but an alpha component in the middle band from treasury companies buying — “if Bitcoin stays between 112 and 118 for the next month, it’s very possible that ETH can put in 15 to 20%, even if Bitcoin’s down 2%.” His hedge-free rider: those vehicles are “not that big yet and they will get big and they will get structurally important and they will blow up at some point. I’m saying it now.”
• Avi’s change of mind, kept as hedged: still bearish on fundamentals (“my answer is still yes”), but “I missed it… I was too stuck in the fundamental analysis zone” — what’s happening is purely flow-driven, ETH as the secondary catch-up trade. On the huge CME ETH short interest everyone wants to squeeze: he knows “the vast majority of these guys are delta neutral… it’s a basis trade. But crypto is a meme, man — let’s not overintellectualize it.” ETH being strong off the lows — its historic weakness through three years of ETHBTC down-only — is itself the signal.
• Jonah executed mid-show: rather than sell Bitcoin and realize a tax gain, lever long ETH against BTC collateral — “I kind of want to do it even though I feel disgusting being long ETH,” since a 5–10-bagger “is just not on the table” on a megacap. By the close: “I even yoloed some ETH on leverage in the middle of our chat.”

4. The institutional cycle: buy what institutions can buy

• Avi’s borrowed frame (credited to Santi): “this is an institutional cycle” — crypto-natives “are not winning this cycle by any stretch,” memes are getting clobbered, and the winners are Bitcoin plus public companies. ETH is the second-most institutional asset, Ripple third — so “you probably want to own a portfolio of Bitcoin, Ethereum, and Ripple until those flows subside.”
• Jonah’s refinement — institutional crypto ≠ crypto institutions will buy: Galaxy, Coinbase, a public Kraken are institutional crypto, but whether institutions buy the assets is separate. For ETH and XRP, the relevant signal is institutional inflows, because the online believer community “is already 10 out of 10 max long” — and XRP’s 35% drawdown shows what happens when it isn’t.
• Avi’s flyers on the same logic: Ton — “it’s almost unfathomable to me that they wouldn’t try to do a treasury company for Ton… what crypto asset could I sell to public institutions? That’s kind of it.” And Litecoin, up 20% off the weekend lows, an easy treasury-vehicle rollup and “the silver to the Bitcoin gold.” Jonah’s wry echo: “this sounds a lot like 2014… it feels like we’re three cycles ago” — except the regulatory green lights weren’t flashing back then.

5. Crypto equities are the new meme stocks — Galaxy has every box checked

• Exhibit A is Coinbase: $254 on June 18, +72% by the July 18 top, −30% three weeks later — “this has nothing to do with crypto volumes or how much money Coinbase is making… pure people aping in because crypto is hot and aping out because there was a red candle.” Their verdict: “a trading paradise right now if you’re fading moves” — they claim the Circle top call, and Avi thinks he bought Coinbase puts Friday morning: “it’s over for the coin fanboys.”
• Jonah ranks Galaxy the most GameStop-able institutional ticker — like “Crispy Cream or Gamestock that just sends for absolutely no reason.” The checklist they build together: meme-bait name (“send it to the freaking galaxy”), a charismatic memeable leader in Novagratz “on CNBC every other day,” the crypto×AI data-center story, and — the Roaring Kitty ingredient — a written fundamental case (the writer Duncan arguing it “might actually be undervalued”).
• Earnings are the binary: a good print brings “a lack of detailed analysis and just relentless bull posting” to maybe $40 from $29; or it trades down five, six bucks “and then it’s probably a buy.” The bear case is precisely its institutionalization — Jefferies and Goldman initiating coverage means someone looks under the hood in a way retail won’t. For GLXY the alpha is on Twitter and Reddit; for ETH/XRP it’s institutional inflows.

6. XRP is “a total scam” — and might moon anyway

• Jonah, categorical: “I think it’s a scam. I’ve always thought it’s a scam.” The bridge-token pitch — a volatile, illiquid token needed to move between fiat currencies — “is obviously nonsense. You can just swap dollars for euros and that works just fine.”
• Avi’s pushback, worth keeping: “it may have started as a scam, but you can fake it till you make it.” Ripple’s war chest bought Hidden Road, a brokerage — buying legitimacy because they likely care more about the equity than the token — and “they’re almost definitely going to go public.” His no-inside-information guess: IPO announced by year-end, and “if Ripple Labs goes public, Ripple Coin is going to the freaking moon.”
• Jonah’s extension of the treasury logic, run in reverse: dinosaur coins with useless-but-valuable tokens — Near, which Jonah says, based on sketchy online research, has “about a billion dollars sitting in their treasury,” and Polkadot — should buy actual businesses (“maybe a medium-sized tequila company”) the way pharma shells got reverse-SPACed into ETH vehicles. “TradFi just doesn’t get it” — scraps for enterprising listeners.

7. Hyperliquid needs survival, not attention

• People have rotated to Galaxy and memes after a few red candles, but Avi’s point is the token doesn’t need timeline euphoria: tokens get bought and burned or locked away in a vault, so “you just need the exchange to survive, and it obviously will” — there aren’t many alternatives, especially no-KYC (“kind of like a mixer for people who don’t pass the KYC test for, let’s assume, legitimate reasons”).
• The catalyst: legalized US perps — Hyperliquid “will become institutional… probably some sort of liquid backend for finance in ways that centralized exchanges can’t because they don’t have open architecture,” and Jonah says to cross his fingers that “HYPE is tripling when that happens.” The stated risk: US access may arrive bundled with KYC requirements that nuke part of the base.
• The exchange tangent that framed it — Jonah on why he trades Kraken Pro (disclosed sponsor, “has not paid me to say this”): separate stablecoin ladders instead of Coinbase’s “beginner mode” aggregated USD line, and no asset gating — Coinbase once let him withdraw $8,000 of $300K pending a 14-day KYC re-approval. “There are two US exchanges, and Kraken is the only one that doesn’t disrespect your intelligence every time you log on.”

8. Macro green lights, one wildcard, and how to size it all

• The setup: “a massive set of green lights in Washington” — Genius Act, Clarity, executive orders, David Sacks — plus an imminent rate-cut cycle. Jonah reads the BLS firing carefully: the truth is “probably somewhere in the middle… probably inappropriate to fire the person,” but the signal is Trump intervening where presidents traditionally stayed away — “one step closer to Fed governors who are dovish because they’re dovish, not because they’re qualified.” Net: “getting bearish here because of a few red candles seems so stupid.” The one thing that sends it “into the toilet”: a Ukraine wildcard — “Putin drops a tactical nuke” — though the likely Medvedev–Trump exchange gets discounted: “Medv has no real power.”
• The sizing philosophy, from Avi’s semi-retirement from screen-watching: “you take small swings where you think you have a little bit of edge and big swings where you have a lot of edge, and you continuously push the bar of what is edge a little bit higher.” The privileged unlock: “you can actually miss a bunch of trades and still end up making a lot of money in life.”
• The closing tension, unsmoothed: Jonah — the opportunity cost of holding the wrong token is very high (XRP −35% while Bitcoin was +5%): “maybe not a good time for active trading… come up with your top 10 bets and invest in the top two.” Avi’s pushback: “I wouldn’t say this is the time to take your eye off the ball” — he guesses September will be a big month for the institutional trades, so “start chipping in now and then go harder a little bit closer to September.”