Joe McCann, Founder, CEO, and CIO of Asymmetric—2023’s top-performing hedge fund globally—joins Anthony Scaramucci on Speak Up for a deep dive into all things crypto, Solana, global macro, and much more.
Few professional money managers can match the returns Joe McCann has achieved by betting on Solana and other crypto investments. He describes his approach to Anthony as global macro expressed through crypto trades, calling Asymmetric ‘a macro shop dressed up in crypto clothing.’ This is an absolute must-watch that you can’t miss!
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Joe McCann 0:00 Jerome Powell is going to come out more or less telegraph cuts in September, but also potentially QT. I think if they cut 25 in September, they're going to crash equities. We think they're behind the curve here. If you look at where we are in the global liquidity cycle right now, we're nowhere near a peak. My answer is to the price target for Bitcoin is higher. It's still my view that Solana is the fastest horse. Solana has flipped every metric associated with Ethereum. I don't know why you wouldn't remain long this thing, right? Anthony Scaramucci 0:40 Welcome to wealthion and speak up now. I'm Anthony Scaramucci, your host, and thank you for joining us. One of my favorite people in crypto and just remember, Joe God made the perfect heads without hair. Okay, the imperfect heads are the ones that got it. This is the legendary Joe McCann. He's a good friend. He's an expert on many topics. It would be macro, crypto, web three Solana. He's the founder and CEO and CIO of a hedge fund called asymmetric, which is an amazing name, by the way. So thank you for joining us. Our audience loves a little bit of Joe McCann, so let's start right at the top, where all roads lead back to the Federal Reserve. Joseph, so what the hell is going on now? The numbers are out. Inflation looks tamer. It's under 3% what do you think happens? Joe McCann 1:34 Yeah, look. I mean, if you've, if you've read any of our market updates that we put out every month, they're free. Subscribe dot asymmetric, dot financial. You can read you can just check the receipts. We've been pretty much dead on with macro since we launched the fund in June of 2022 our view has been for quite some time that the tightening policy was done earlier this week, earlier this year, I should say. And we actually have a view that the Fed should have cut in July, and we see that price recently in the futures markets that they're looking at 50 bits. JP, Morgan, who tends to, as you know, Anthony, they don't speak out of tune, out of turn. They are also clamoring for 50 bits. Our view is that inflation has come down significantly, and there's greater risk to the employment picture, which is the Fed's dual mandate. And so our view really is, you know, at Jackson Hole, which I'll be at next week with you speaking at the Washington symposium, looking forward to that like, our view is that they're gonna, you know, Jerome Powell is gonna come out and more or less telegraph cuts in September, but also potentially Qt, right? If you look at what's happening the reverse repo, we're down around $300 billion that liquidity is coming out of reverse repo going back into banks. And you've also got cash at all time highs and money market funds, they're probably going to have to end up doing something as it relates to Qt as well. So our view, you know, potentially, they end up talking something about, you know, the balance sheet, and either tapering Qt or ending it all together. But I think it's pretty clear at this point, with what you've got for the economic data that's come out, that cuts are coming. They've been coming from our view, since April, we've been calling for this. So we think that's still the case today. Anthony Scaramucci 3:16 Give me the numbers, 25, 25 25 we get three cuts this year, 50, 25, 25 or one cut. What do you think, Joe? Joe McCann 3:28 yeah. Look, I think September. I think if they cut 25 in September, they're gonna crash equities. We think they're behind the curve here, like that. We really do think they should have done 25 in July. And so our view is really 50 in September. And look, a lot of people, we think they'll do 50 again. And the reason is, people tend to look at this and go, that would be crazy. It's like we'll do they hiked 75 and 75 back to back, right? So there's no reason that they couldn't actually do a maintenance cut twice in a row and then start, you know, doing the kind of quarter, the 25 bips cuts consistently going forward until they reach sort of a normalized rate. We think that's close to 3% so there's, there's a lot of room for them to cut. And let's be clear, real rates, if you look at median inflation right now, it's about 1.7% top end of the corridors, 5.5 you're talking real rates over 3% even if you take current, you know, headline inflation, it's still over 2% historically, real rates are around one to some 1% they've got room to cut, and they've got the reasons to do it. Do they do 50 and 50? Potentially, we think that's a real good shot 20 fives all day long. Easy. Anthony Scaramucci 4:35 yeah. So I think they're too chicken to do 50, but I think they're behind the curve, and they they should do 50. But, you know, we'll see what happens. But forget about the Fed for a second. I want that Joe McCann view of the economy, right? You I look at the data, I see a mixed bag. A lot of things about the economy I like. I do see some softening. Of course, if I'm the man on the street, I'm not in love with the inflation and I'm not in love with the creeping costs that are eating up my disposable income. So So tell me what Joe McCann thinks of the economy. Joe McCann 5:13 I mean, look, we recently wrote about this in our last update. You know, I think part of the issue with the economy as it relates to the Fed, is they tend to look at things on the average, and on the average, things seem okay, but that's a normal distribution of outcomes. And in reality, and certainly in practice right now, if you look at the data to support this, it's actually what's called a bimodal distribution, right? And so on the left mode of the distribution, you know, bimodal is basically two hops right on the left mode of the distribution, you know, let's just take a look at dining out. Okay, so on the right mode of the distribution, these are people that they're doing well. Folks have got, you know, cash and money market funds. They're generating great interest income from that on a real, real basis. Dining out, all time highs McDonald's struggling. Why? Because you have a bimodal distribution of how the actual economy is functioning right now. And the folks that are, I would say, more budget conscious consumers at restaurants as an example, are struggling to meet the prices that McDonald's has even with McDonald's dropping prices, yet on the on the flip side, you've got folks that are eating out at all time highs. And so the our view of the economy really is that the the the average is not actually the appropriate way to frame what's happening the economy. It's a bimodal distribution. So that left mode is the part where people are really struggling, and the right mode people are doing great. And I think that that's to your point where, you know, some folks feel like things are just fine, and you can always cherry pick data to fit your narrative, but it's really the case. There's these bimodal distributions throughout the economy. And in fact, we saw this even in 2023, of last year, when you had the regional bank crisis. So there was a bimodal distribution there, right? The Federal Reserve kept saying, Oh, the banks balance sheets, their deposits are great, et cetera, et cetera. Well, yeah, on the average, because you've got JP Morgan and Bank of America of these enormous deposits. But then the regional banks, they weren't as strong. And I think that that's what you ended up seeing in the outcome of those regional banks. Is another form of the bimodal distribution of how the economy is actually functioning Anthony Scaramucci 7:20 So Joe, I agree with you on the economy, but I have to ask you the question this way. I just want you to think about this. There's two schools of thought. There's trillions of dollars in money market accounts. They, let's say they lower rates by 100 basis points, either, you know, 425, 250s, but it's down 100 basis points. The interest rate on those money markets goes down in the cash flow and the disposable income that's coming out of those money markets goes down, so that could be de consumptive for the economy. But the flip side is, if they do that, the borrowing rates go down, which could improve the cash flows in the real estate industry, the mortgage industry, and for lenders and debtors, particularly own debt, that would be beneficial to them and improve their cash flow. So, so what, when you think of the T's of those two things, what do you think happens in the economy? Is it good for the economy that we lower the rates? Joe McCann 8:19 Yeah. I mean, look, I think bambell just came out last week and showed that cash and money market funds at all time highs. Retail is still retail investors still owning loads of T bills. And why wouldn't they? They're earning five and a quarter on them, and real rates are positive, right? Like, why wouldn't they be doing that? Well, eventually that cash will, you know, the cash on the sidelines, cliche, will ultimately end up back in the economy in some capacity, because they're not able to earn those real rates anymore, and because rates will come down. So this also affects businesses, though, right? This is also part of that, but bimodal distribution, I think one of the things you're alluding to, if you look at things like the Russell 2000 you know, those companies are, they have high borrowing costs, right? Your apples of the world that have billions and billions of dollars in fixed income, they're milking that interest, right? But they're an enormous organization, relative to, say, a small cap business that also matters for you know, I would say just consumers in general. So I do think that there's a case to be made that not only with if you raise rates, excuse me, if you lower rates, people are going to be less prone to keep cash in money market funds. So that either means they stimulate through consumption, which is net positive for GDP, because the majority of the GDP growth has been deficit spending by the government to fund a lot of the projects and businesses and workers that are out there, I think that comes back from consumers by cash coming out, but more importantly, that cash will chase risk, because you're not going to if you're if you're earning potentially less. And there's opportunities in the market, whether it's you know, if you want to go as further out on the risk risk curve, or something like crypto, or if you want to just buy Apple stock, you. Know that cash is going to start to flow back in, and so I do think that there's, there's clearly second order knock on effects that come from the rate cuts that will come in, and certainly that'll be stimulative to the housing market, right? So last week, actually, we saw a huge spike in refinancings applications, and the Fed hasn't even cut rates yet. But if you look at what's happening, the more happening the mortgage the mortgage market, as well, as well as fixed income, they're all assuming and effectively pricing rate cuts. So, you know, the housing market's still pretty tight. It's depending on, you know, certain areas of the country, like New England, is doing great, but in the south there's, ironically, where you thought, you know, houses are cheaper. They're struggling a bit. So we do think that that ultimately rates coming down means more cash in from a consumption side, as well as chasing risks, as well as seeing, you know, this sort of mortgage refinancing as Furthermore, folks that are kind of, quote, trapped in their homes that want to move or want to sell, but have a greater propensity to do that. Anthony Scaramucci 10:57 I'm always of this school of thought that the lower rates helps things. It just like you said, you know, increases the value of your assets, improves the stock market and mix which is interesting. This is like, first time in 15 years, Joe, we have a little bit of savings, you know, sort of post covid savings, you know. Um, let's talk about the state of crypto for a second. And again, two schools of thought there some people are very happy. This time last year, Bitcoin was at 30,000 now it's roughly 60. So there's a school of thought is very happy. There's another school of thought saying, Whoa, we've had great news in crypto. Hit the all time high of 73 we've had a having we've got 11 Bitcoin ETS. Now have an ETF or several ETFs or Etherium. But why is Bitcoin stagnant? So what's your school thought? Are you happy? Or are you? Where are you? Joe McCann 11:51 I mean, my LPs are happy. I can assure you of that. So look, I tend to say asymmetric. Is a macro shop dressed up in crypto clothing, right? We use global macro to really inform our view more broadly, and we use crypto as the ultimate expression of that. And so, you know, why isn't Bitcoin at New all times highs now, after the having, because there's more sellers than there are buyers up near the highs, like, it's pretty simple, right? But our view is, you know, is, I don't want to say it's simple, but it has a lot to do with global liquidity and the global liquidity cycle. And so our view is, q1 would kind of be a ripper for for Bitcoin and crypto, because of the ETF news and ETF flows, as well as no new year annual flows that come into the markets. Q2 historically is the roughest quarter. It's actually the only quarter of the year historically, this negative for Bitcoin turn to be, turned out to be the same case this this past. Q2 q3 our view has been that, you know, over the summer, that's when global liquidity injections in collateral issues start to tick up, such that you're going to have more liquidity entering the market. And q4 of course, we've got an election, but we do see that uncertainty largely being contained, irrespective of the outcome. And so if you look at where we are in the global liquidity cycle right now, we're nowhere near a peak. And in fact, even as of we see here on Wednesday, August 14, last night, the PBOC injected an enormous amount of money into China, that country is struggling economically, and they are also going to be launching a stimulus package in September. So if you couple, say, coordinated central bank rate cuts, you've got Bank of Canada cutting, you've got ECB cutting, you've got 90 bits priced for ECB for the rest of the year, and you see what's being priced for the Fed, coupled with what's happening in China as it relates to liquidity injections as well as the stimulus package, it's hard for us to see a scenario where this liquidity doesn't flow further out the risk curve. And so our view has really been as the global liquidity uptick happens over the summer, which is candidly happening right now, that will ultimately inflate risk assets, and crypto will will benefit from that, Anthony Scaramucci 14:04 makes sense. I I love putting people on the spot, so you gotta bear with me and putting you right on the spot right now, you have a price target for Bitcoin by year end, and if you don't have a price target for Bitcoin, you're on I'm putting on the spot anyway. I want you to make some shit up for me. Joe McCann 14:23 okay, you know, I get this, I get this question all the time, and my answer is to the price target for Bitcoin is higher. It's always going higher. Look, I like, respectfully, I think price targets are an invention by Wall Street to sell products. I just think that you could pick a number, and it almost doesn't really matter, like you could back out of a lot of you know, metrics and formulas to figure out where bitcoin is going, but at the end of the day, it's gonna be flows and liquidity and so, you know, I know ever cores out with 115k target, our friend Tom over at Fun strats like 160 150 someone in that range. I think 100k is a huge. Psychological level. And if you look at the options markets, that's where all the open interest is. The majority of open interest for end of December of this year is 100k so, you know, maybe we, maybe we break out some point this quarter, start tapping into the 80k range. That gamma profile pull a lot of buyers close towards that 100k strike towards the end of the year. But look, I mean, this is crypto has this sort of specifically Bitcoin, as you know, from your experience, Anthony like did the asymmetry of what can happen with an asset like Bitcoin, all it takes is, you know, 401, K, passive bids. Or, you know, a sovereign actually put it on their balance sheet. Or the US putting it on their balance sheet, you name it. The direction of where this thing can go is enormous. And as as Blackrock becomes, eventually going to be the largest holder of Bitcoin, you know, it's a hoarded asset intentionally. And so when you have a hoarded asset, there's less supply. Well, with there's less supply than what happens when there's any modicum of demand, the price goes parabolic. And so, you know, we think 100k is reasonable based on their options markets for this year, given that it is, you know, the highest open interest. This thing could go much, much higher. Do we think Bitcoin is trading 30k at the end this year? Absolutely not. Anthony Scaramucci 16:13 I think that's a very fair assessment. So I ran into you in San Francisco. I don't know if you remember this. Joe McCann 16:21 Oh, I remember Anthony Scaramucci 16:23 But the good news about the encounter is we were drinking class as old tequila together, see that? So that was something I remember quite vividly. And of course, we were there. I was meeting with the Sui guy. We got into a discussion about salon. I don't know if you remember this, but we were at the bar and my old friend Sam bankman Fried, who's now spending 25 years in jail. And yes, people get mad at me when I bring him up, but I don't care, because he was a very smart guy. He said that the fastest blockchain is going to win, and the fastest blockchain will end up being the most valuable blockchain. He thought Solana, was that blockchain? Do you think is that blockchain, and if you do, do you think he's right in his theory and suggestion? Joe McCann 17:05 Yeah, look, I think we can separate the criminal from the intelligence of Sam, if we can, if we can be intellectually honest. And I, I agree, and this has been my view since 2019, and part of the reason is, you know, when I, when I started to study Solana as a technology. I had just seen this movie before, and, you know, if you look at like, say, BlackBerry, it was technically the first kind of smartphone, right? And it dominated, you know, Research In Motion had 80, 90% of smartphone market. Seemed to be a home run of a company from here on out. The problem was the approach that they took was taking, you know, a desktop style computer and jamming it into a phone, as opposed to thinking about a phone from a first principles perspective, which is what Apple did. It's a flat piece of glass, right? The way that you interact with this particular device, with the internet, is fundamentally different than when you're sitting at a desktop computer. That is effectively Ethereum versus Solana, and so Ethereum hats off to them. They, you know, kind of created smart contract programming a new leap in computer science, a new type of of compute. But it was a fork of Bitcoin, and so they took Bitcoin, they copy and pasted it, made some changes, and unfortunately, that technical design is what we call a single threaded design, right? So everything has to happen in in a very serial fashion. That's not how moderate compute works today, right? So as we sit here on this call today, you've got, you know, you've probably got another browser tab open, maybe you've got Excel open, maybe you've got your email client open. You can run multiple applications on your machine, because you can run things in parallel using parallel processing. That is Solana. Solana is a, is a blockchain that enables parallel processing, which is consistent with the pattern of compute for the past, you know, number of decades. And so to me, it stood out as like, this is so obvious. Not only is it utilizing the patterns of modern compute, which is parallel processing, but also it is dirt cheap, right? And so a lot of folks in crypto have brought a lot of the kind of, I would say, traditional financial business models. And said, Well, you know, if you're going to run an Ethereum node, you need to pen this much money in electricity, and then you have to generate this much in income, and then there's your discounted cash flow, etc, etc. And I'm like, this is a network. And, in fact, TCPIP, SMTP, these things that the internet is built on, HDP, et cetera. These are just protocols. No one makes money off the protocols no one's valuing HTTP, because it's all the applications that are built on top of it, right? And so Solana, it being so cheap and fast will enable use cases that are literally impossible on Ethereum in its current state, I should say, right? They, maybe they break through some new leap in computer science. Again and figure out the scaling issue. But fundamentally, the technical architecture of Ethereum is disabling them from doing things like the applications that exist on Solana and so yeah, it's still my view that Solana is the fastest horse. And then you can look at it from a trading perspective. Look, I'm a technologist and a trader, right? So I look at the trading perspective, and I go, what's the relative value trade here? Long soul, short, eth, it's up 35% year to date, right? Like, and this is in a year when Ethereum had spot ETFs approved, right? And so I look at the relative value of Solana versus Ethereum. I look at the fundamental challenges associated with Ethereum versus Solana. And it's really hard for me to make a case that I should be actually overweight Ethereum versus Solana. Anthony Scaramucci 20:42 you know, I think you're going to be right about that too, Joe, you got a good gut instinct about this stuff. So are you and I just lucky, Joe, or are we smart? Tell me what you think. Joe McCann 20:52 I mean, you know, that's what I say at asymmetric is that we just keep getting lucky over and over and over and over again, right? I say that in jest, but look, this is not some overnight success, right? Like I've been in tech and finance for 24 years. This is what I do. I live, breathe and eat this stuff. I'm a software developer as well as a trader and so, yeah, is luck involved? Absolutely, no doubt about it. But I do think that a lot of what we synthesize at asymmetric that informs our views is not just, you know, kind of rehashing the same narratives or buying into the same approaches that I think other folks in the space have taken. And, you know, to be frank, people were stomping on our throats when Solana was trading $8 and I was shoving all in because I still had the same level of conviction as the kind of the fundamentals of that particular blockchain we're just getting beat up by, you know, obviously it's a tightening cycle from the Fed, but also, you know, post FTX, all these kind of calamitous events that were affecting the price. So I do think that luck is absolutely involved, but you need to have an informed view and a prepared mind to be able to capitalize on those opportunities so that you're not, you know, paralyzed when you're seeing Solana down, you know, 94% from the all time high. Anthony Scaramucci 22:06 So since you brought that up, let me just address that. I mean, I we had Solana down to a hat size of, like, eight. And so, you know, this thing could go to 1000 we're going to go from eight to 1000 so that's just the distortions of the markets over leverage in the markets. I think we have to remind people that, if you understand something and it has good fundamentals, have to sort of stay in things and stay convicted, right? Joe McCann 22:34 Yeah. I mean, look like the you know, Solana went from whatever eight to 200 within the course of whatever, 18 months or something to that effect, right? And that is, that is a crazy return for any stretch, right? And people ask me, Well, this is still this thing still have legs. Do you think it goes higher? And I'm like, well, until, until there is a legitimate competitor at the fundamental level with what it's doing. I don't know why you wouldn't remain long this thing right now, we do things. We have a pretty sophisticated derivatives and options book at asymmetric and so we have, I would say, meticulously and carefully crafted our portfolios that we have exposure in the right way, to minimize downside, maximize upside, all that good stuff. But Solana today, if it gets to $1,000 token, call it, I think that's a little over a trillion dollar mark cap, something like that. That happens. Bitcoin goes to multiple trillions of dollars Mark cap, which I think both of us are in agreement, are going to happen at some point. And furthermore, could it potentially flip a theory's market cap? Who cares? Like, this is a that's a crypto, you know, kind of Twitter type narrative that that people love to talk about the flipping of this, and that it doesn't really matter if Ethereum goes to 10,000 Solana is easily close to $1,000 at that point, mostly because of the reasons I mentioned before, Ethereum is well over owned. It is very difficult to sell in Wall Street. You know, Bitcoin, digital gold, simple, simple product to sell Ethereum. What is it so? So yeah, and by the way, let's be clear. Like Vanek, 21 shares, they filed for spot ETFs for Solana, Brazil, they just got approval for a spot ETF for Solana. Obviously those markets aren't super deep, but you can, you could, you can kind of see where this is going. And so I think you know, you betting on the fastest horse with the most potential relative value to its current competitor, which is Ethereum. And by the way, just to be super clear, Solana has flipped every metric associated with Ethereum, right? So this is decentralized exchange, volumes, transactions, wallet signatures, all of these metrics that the Ethereum community tracks for Ethereum activity. Solana is flipping it. And so you have something that's doing more things, more activity, at about. 20% of the value. It's just, you know, it doesn't even matter, like, go to 1000 if Ethereum is going, you know, two and a half x 3x from here. Solana's got to be four or 5x as well. Anthony Scaramucci 25:10 Gonna take some questions from the audience. All right, we got people that love you, so let's fire in the questions with what happened last week. And obviously, I think Jennifer is referring to the crypto and the tech crash, and now, now it's reversal. How do you approach rich management in a volatile market? This is Jennifer from Oregon. Joe McCann 25:31 Well, I'm in Portland. So hello, Jennifer, yeah. So myself, my trading partner, have almost 50 years combined trading experience, cross asset, cross Geo, global macro, basically everything you can imagine trading. And we have been around during GFC. We've been around our taper tantrum, the flash crash, covid, you name it. We actually thrive in these, these volatile environments. But the way that we structure risk around our portfolio is mostly fixed risk like we don't ever, we don't apply any leverage. Everything that we have is relatively fixed. But one of the things that we did during that, you know, call it those three days with that, I didn't sleep over the weekend, we did what we call delta replacement. So, you know, we wanted to have, we had reasonable exposure on as did most people, but near the lows, instead of, you know, kind of just stomaching it and writing the thing back up, we ended up ultimately replacing some of our delta one positions. So think about our spot positions and optionalize them. So, you know, assume there's maybe $20 million in spot positions that we may want to raise cash from. We may be optionalized that delta with, say, a million dollars. So we're still 19 million in cash, but we've optionalized a million dollars worth of it such that the delta on the kind of reflexive snap back would actually put us higher in terms of P and L if we got back to, you know, kind of where it was before it crashed. And that's ultimately what happened. Like we've, we've seen these types of Var shocks, you know, I think the media has tried to do a reasonable job of retroactively explaining the yen carry trade. But even that information was mostly incorrect. There was chatter that was 18 to $20 trillion baked into this carry trade. That's a fundamental misunderstanding of how derivatives net out. There was about a trillion dollars of exposure, and it's basically repositioned. And so we saw what was happening in terms of volumes across all risk assets. I mean, the fact that you wake up, you know that folks in Tokyo wake up, and the largest bank in Tokyo is down 21% on no news, like there's a signal there, right? And so you saw a huge amount of capitulation and when. And then also the sentiment people DMing me, asking me if the world's ending. I'm like, this is when you're supposed to get long. So we just did it in a smart way by, you know, basically swapping Delta out of delta one positions into optionalized Delta positions. And that's worked out in our favor. Anthony Scaramucci 27:54 Let's go to the next question. How do you see the evolving regulatory landscape impacting the future of crypto investments. And I'm going to expand on Jerry from Ohio's question, not just for taxation, but broadly so taxation. Yes, Joe, but also, how do you see this working out? Speaker 1 28:14 Yeah. I mean, look, it's I was just on a call with some prospective LPS before this interview, and they asked me, What's the biggest risk, and I was like, the regulatory uncertain. Regulatory uncertainty the United States. So I do want to give a little bit of credit to the Biden administration for their kind of 180 as it relates to at least what they're publicly announcing their view is on crypto. And I think that we have to somewhat discount that, because they are politicians. So, you know, factor that in. But ultimately, the fact that crypto is a conversation piece and a topic at the presidential election level is important. And, you know, I loosely hold a view that it almost doesn't matter who gets elected president, the fact that there's, you know, enough chatter around this that it's net positive for crypto. Does that actually translate to a comprehensive regulatory framework? I don't know. It's DC, right? Like gridlock is what they do. And so I don't want to get overly optimistic that, whether it's a Trump or Harris presidency, that there's going to be a comprehensive regulatory framework, but I am optimistic that it's going to be on the margin better than what we've experienced over the past few years. I think the challenges around sab 121, as well as Operation show point 2.0 making banking facilities basically impossible for anybody that does crypto the United States, we need to see those things actually go away. I do think something like a stable coin bill is valuable. Of course, there's the concept of a strategic reserve for Bitcoin that could obviously be net positive for the industry. But at the end of the day, without having a clear a clear understanding of how the political landscape is viewing crypto, it's just. Really impossible to right size that risk. Now, as it relates to taxation, I am definitely not a tax professional. That's why I have one. And I know that there's there's recently, I think the IRS mentioned something as it relates to qualifying certain gains or losses, etc. I don't have a strong opinion on that either. I think the larger and more impactful piece is going to be what administration is actually going to recognize that the digitization of money is through blockchain and cryptocurrencies, and is actually going to enable innovation to thrive the United States. I think that's, you know, one of the reasons why you see, I have seen, maybe anecdotally, but Anthony, maybe have a different view. But anecdotally, I've seen a number of folks that have been, you know, lifelong Democrats that are just now becoming single issue voters as it relates to crypto. And there's a lot of money behind this. The fair shake super PAC has the most money of any pack out there. They're just going to back candidates that are pro crypto for the most part, right? And so, you know, I don't want to suggest that the election hinges on crypto, but it is a, it is a real large cohort that's growing, and I think that politicians have to pay attention to this. Do they have to enact policy after they get elected? Not necessarily. But you know, if you put, if you put certain very specific agenda items for in the forefront for how you're going to be addressing policy as it relates to crypto, I think your constituents are going to expect you to follow through on that. Anthony Scaramucci 31:32 You know, I'm in your camp. Because, listen, even if, if there's 50 million wallets, and let's say 5% of those people care and they're single issue voters, that's two and a half million people. Could be very close election. I don't understand what the Democrats are doing. They should be pro crypto. You know, either it's a very foolish macro decision. All right, let's go to the next question for investors looking to build a diversified crypto portfolio, what key considerations would you suggest for selecting investments? This is Janine from Tennessee. Joe McCann 32:05 So I get this question a lot. This is obviously not financial advice, but I would say hypothetically, if I was to kind of reap, like, start a crypto portfolio today, I would actually have a relatively barbelled approach with Bitcoin and Solana, you could equal weight Bitcoin, Ethereum and Solana, but I still think Ethereum largely underperforms Bitcoin, and certainly Solana. So it really depends on kind of the way you how much risk or beta you want to have in your portfolio. So let's assume you want to have a relatively lower beta or lower volatility within your portfolio, you could do something like an 8020 Bitcoin to Solana, right? So I do think it's important to have some exposure to something like Solana, if not Solana, something that will provide you a little bit of additional beta and upside in your portfolio. If you want to be a little bit more aggressive, you could invert that. And largely, I recommend Bitcoin and Solana as kind of this barbelled approach if, because you don't really have to manage it right, you can just be you can just go into Coinbase, or whatever your exchange is, and buy these two assets. They're very liquid and and just hold on to them and manage to, you know, the portfolio outcome that you're looking for. I would, if you want to take it a little bit further. This might be somewhat controversial, but, you know, it turns out that one of the best performing assets over the past, you know, 10 years, is Dogecoin. So I do think that there's actually a case to be made that having some exposure to the meme coin space as a sector, as silly as that may actually sound, is beneficial to your portfolio. So in some cases, you can do something like to the effect of maybe you have 50% in Bitcoin, 40% in Solana, and 10% in bonk, which is the Solana Dogecoin, if you will. It's a dog coin that exists on Solana. I know this sounds probably pretty ridiculous, but the return profiles of these types of assets is huge, and so introducing that into the portfolio, I don't think, is foolish. I think it's actually net accretive to a portfolio that will expand as crypto adoption continues to rise. Anthony Scaramucci 34:17 How can investors differentiate between valuable nfts and those that might be overvalued. This is William from Texas. Joe McCann 34:25 Yeah, as someone that has a lot of nfts, I can tell you, nfts are struggling right now, and a lot of it has to do with the attention that is shifted away from nfts to things like meme coins. The irony here is that nfts are by definition, non fungible, which means there's a very limited supply and you can't easily distribute them. And so one of the things that I think folks take for granted in crypto is that when a new token comes to market, you actually want to get it in the hands of as many people as possible. Otherwise you restrict. The kind of market of people that are going to own that particular asset, like an NFT. So let's assume there's, you know, 5000 of some particular NFT while what is drawing attention to those nfts to make them more valuable? It's a it's an open question, because the NFT kind of community, if you will, trading volumes have just plummeted. Values of these assets have have dropped precipitously. So ultimately, I look at nfts as kind of like a, you know, an option style payout, right? If you believe that NFT has some particular value, whether it's from an artistic perspective, esthetically, or maybe there's some utility that's associated with it, and you think it's undervalued, great. Maybe it has some, you know, large return profile. I do think you have to factor in that nfts are, by definition, illiquid, and so it's just like selling, you know, fine art, you have to have a market of buyers, and that, by that, market is relatively thin with nfts. It's trivial to create them, but it's very difficult to maintain their value. Anthony Scaramucci 36:06 Good stuff. Let's go to the next one with so much uncertainty. How do you think what's happening in markets will play out in the crypto space? Is Alan from Minnesota. Joe McCann 36:17 yeah. I mean, look like I think markets are always uncertain, and so I don't think there's any true certainty to any markets, because markets are built on speculation. At the end of the day, we can, we can try to do things intellectually to justify or kind of manage the risk around that. But the way I see that kind of that the current setup for the markets is actually still still relatively bullish. I get back to kind of the global liquidity picture, rate, rate, the tightening cycle has been over. Rate cuts, dropping, and so as it relates to crypto, crypto is the furthest out on the risk curve. So, you know, it's highly volatile, as you all know, but the performance profile is enormous. And so as the global macro picture, I would say, improves, liquidity comes into markets, you start to see, you know, kind of a softening of real rates that's going to favor crypto. And the other thing to note here is that, you know, I'm American. I think a lot of us have a very US centric view on risk as it relates to the stock market, etc. Crypto is a global asset, and the majority of trading crypto actually happens in Southeast Asia. So I think that actually what happens out of China over the course of the next six weeks is actually going to be rather material for how it relates to the value and price of crypto. So look, I still think, I still hold the view that that the macro picture is favorable to risk assets, and crypto being the froth is out on the risk curve is going to benefit the most. Anthony Scaramucci 37:53 I just want to say thank you for joining us. I'm going to see you at the salt conference, aka the Wyoming blockchain symposium, which super excited about. And thank you very much for coming out to that as well. And when I need reinforcement on my Solana position, I look for you on X Joe, look for you on X Joe McCann 38:15 Always available for my friends anytime. Anthony Scaramucci 38:19 If you like this video. You'll like this video as well. Check it out. You.
