Training becomes more and more expensive as these big labs grow. To keep increasing their training, they have to convince private investors to give them more capital to train their models. To create that justification possible, they have to generate revenue and prove their ability to monetize their product.

These big labs have one unique way (at least for now) to originate revenue: they sell inference.

The big paradox is that to sell inference, they have to spend their scarce input: compute. As they grow the inference share of compute, which leads to higher revenue, which justifies the investment. They are reducing training compute. By reducing training compute gives the market the sense that their ability to create smarter models is dropping, where extra compute to training isn't interesting to support. As if new models are no longer worth the investment. Investment interest drops.

Looking ahead, we could say that, eventually, the marginal benefit of training new models eventually will drop to zero, it could take 1-year or 10-years, but eventually will happen. Where the marginal incentive that comes from a smarter model is not positive, or more training do not end up with smarter models. A point where using compute to train, rather than use it on inference, will not be justifiable to any investor capital.

But in this period, without labs owning any application built on top, or any other product vertically or horizontally integrated, these labs end up as cloud providers.

This means the multiples sign for Anthropic and OpenAI could be pushed from the current 30x P/S multiples, to the Alphabet/Microsoft multiple of 10x P/S, and eventually to below 10x P/S as they reach (only) the cloud provider status, with inference share of their own compute above 80/90%.

I believe the inference share of the big labs, will determine the IPO multiples sign by the public/private investors. The paradox continues, as they need to increase the inference share to increase revenue number, that increases valuation. Increase inference share also lowers their own valuation multiple, that lowers their valuation. A perfect balance of this paradox must be achieve, as the ability to rapidly increase compute is super limited.

IPO'ing with inference at 50% or lower means the market can still expect smarter models in the future from the spend of their own compute. That justifies 30x P/S multiples, above any other big tech company. At $100/$150B in annual revenue, that puts an Anthropic IPO at $3 to $4 trillion. If they IPO with inference above the 75% benchmark, the multiple could compress to 10x, or 15x with a premium, meaning the same annual revenue could represent a $1 to $2 trillion IPO. Up to 75% valuation discount, it's a big thing.

Thanks,

Joao

I view 1000X as a venture-style investment in a publicly traded token: a perpetual call option with a payout of ]-1;20[ - I expect either to lose what I put in, or to make a 10-20x return on the investment. The founders come first: Avi and Jonah launched the token in December 2024, didn’t dump at the worst possible moment, and now control roughly 23.93% of the total supply. The market, I believe, is pricing survival mode at $1.5m market value; the PWERM Grid, using two different methods, lands at an expected value of $45 to $55m FDV - a direct 30 to 37x increase on the current FDV. ANSEM is running a very similar playbook, and clearly the market appreciates ANSEM. Meanwhile 1000X is up 40% since Jan-2025, with BTC down more than 30%. I believe the market is not pricing the token correctly; I take the other side. So I buy and hold.

Why I bet on 1000X

A venture bet, not a trade

The important side note I can give is to view this as a venture-style adventure - nfa. 1000X is a publicly traded token, trading on Base chain, and still I view it as a venture-style investment. And this is important. I say “venture-style” because this instrument has the same properties as a venture investment, even while trading onchain: (1) it has a market valuation around a pre-seed round; (2) the liquidity is not strong - if you scale a position, you end up without a sustainable exit liquidity unless market valuations grow.

In all my venture bets, particularly pre-seed and seed rounds, I see the position as a perpetual call option. Perpetual, because it has no pre-determined expiry date; a call option, because it carries two expected values: -1x and infinite x’s. Realistically, under this current investment, the payout return sits in ]-1;20[. Under this hypothesis, I expect either to lose what I put in, or to make a 10-20x return on the investment - maybe higher if all my assumptions and the founding fathers are aligned.

The golden rule

In my frameworks I keep a golden rule, which I share with you all: I never sell because the price is down; I never buy because the price is up. The inverse is not true - I could sell because the price is up, and buy because the price is down. This is a golden rule that I printed, and it walks with me through all my day-to-day work. It’s crucial to keep in mind. But, moving on…

The founders come first

Above all my possible financial assumptions, it is the founding team that matters. The founder(s). A “never give up” mentality is what I want to see - it is crucial to the survival of any startup: a founder that gives you goosebumps to back him up. Before everything, the stickiness of the founders is the first variable to be tested. The majority of startups have hard starts, and the resilience of the founders is tested on day 2.

Above all my scenarios, and with all my support for the founding fathers, I rationally keep holding the 1000X token, aligned with the founders. As they said on the podcast on 17 Feb 2026 - “We are not abandoning this project. We will never abandon you.” - I share the same words, adding “never on these valuations.” I didn’t dump when the price collapsed, and they didn’t dump at the worst possible moment for the token and the product: the core dev moving away, core partnerships changing, and a broken platform. Today we are on the platform’s strongest path, with stronger partnerships and a much stronger foundation. Comparably, the price doesn’t dictate the health of this product.

Skin in the game: Avi and Jonah

Investors love to see founders with skin in the game. They get even more interested when founders are able to double down on their commitment by acquiring more ownership of their startup. It reinforces the “never give up” founder mentality. This is one of many reasons why I bet on 1000X.

1000x was founded by Avi and Jonah, two founders who are super technical in trading. Jonah carries a high degree of professional institutional trading, at institutions like Goldman Sachs, Vitol and Cumberland. Avi is a crypto-native trader who traded at institutions like BlockTower and GoldenTree. If you can bet on anyone to build a crypto terminal - scaling AI infrastructure, with helpful frameworks that help retail traders trade the crypto markets, and more - it is these two. They understand the trading engine: how you test trading strategies, validate and run your hypotheses, run probability tests, backtesting and simulations.

These two are highly profitable, successful traders; they don’t need to create and sell products. They could stick to their line and keep growing. Instead, they took the hard route. And the highest proof that these founders are willing to tolerate high pain is that they launched in December 2024 - almost 2 years ago - and they didn’t give up. They don’t need a pump-and-dump scheme; they also don’t need a successful project to be successful. They already are successful. They also have no commitment to anyone - with the token “lagging” upside, if they wanted, they could simply shut down. Their willingness to stick, upgrade, and improve the product they envision is what brings confidence that they are not going to give up, nor ghost their own project. They are building trust, and trust matters, particularly when a publicly traded instrument tracks your startup’s success. In April of this year, the token was down -90%, the product didn’t work, and the podcast didn’t have a clear purpose (it still belonged to Blockworks). The founders’ ability to stay focused on the vision, without fucking it up - and in fact Avi doubled down, buying supply when the token was down aggressively - creates the trust required to venture-bet. Investors love that.

What was 1000X before, and what is it now?

My first published paper on 1000X came out in November 2025, after almost a full year of tracking everyday updates, information, and onchain movements:

As you could read in that paper, 1000X was created without a clear intent - they were testing the Virtuals platform. Fortunately enough, they launched the token; otherwise, today we would have no possible upside in betting on these two.

Let’s get real.

Since inception, 1000X has represented direct exposure to the terminal’s upside. It is the most reliable instrument for accruing value from the terminal’s posture. When it launched, they changed the revenue-buyback mechanics to bring more sustainability to the project: it started at 100% of revenue going to buy back the token, and was pushed down to 50% of profits. It is legit and reasonable that a portion of revenue is required for operational costs, and they did the TGE without a low-float / high-FDV setup, so revenue is required to leverage growth. This is a 1:1 mcap-to-FDV value, with all tokens launched: 87.5% publicly purchasable on the bonding curve, and 12.5% seeded into DEX liquidity at graduation. No team or investor allocation. The founders, Avi and Jonah, bought on the bonding-curve launch, and ended up buying the sniper and buying dips on the token itself. They now control roughly 23.93% of the total supply - an ownership stake that has kept increasing since launch - with Avi alone owning 9.05% of the total supply. Approximately 52.67% of the total supply sits on the market, held by long-tail retail distributed across 83 thousand wallets. Even with all these metrics, the top 100 holders control 88.33% of the total supply, and that share is growing.

In this act, “skin in the game” can’t be questioned. The mission is still aligned with their principles since the day they figured out that a terminal could have some value for their retail community.

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The Network

It is true they have three different products: the social media presence, the podcast, and the terminal. Together they create “The Network.” 1000X leverages the network - I will explain how. Directly or indirectly, 1000X is the value captured by the network.

We have the founders’ X accounts, the trader-focused podcast, and the retail-focused terminal. For now, the token only directly accrues value from the network by capturing the terminal upside (only). I put a high probability on the network merging with the terminal, because these are interconnected projects, and expanding the token to represent the network - rather than only the terminal - would give much more value to the owners than any other possibility. Especially when the attention and the audience are on the network, but the revenue is on the terminal.

Facts justify this possibility. Early on, in January 2025, the first buyback happened: $75k worth of tokens, from the Virtuals protocol revenue. Later, in August 2025, a buyback worth $35k happened from podcast revenue. These buybacks make this outcome probable: even if they haven’t mentioned it recently (at least not in a super clear way), the token has been connected to the network since inception. When the world - US regulation - allows, they will create the attachment; I’m almost certain. The Clarity Act could be the catalyst that unlocks this, or blocks this possibility, but over the long term the path is clear. But until that, 1000X represents only terminal value.

The funnel: X → podcast → terminal

All three products create the network effects required for the terminal to be successful. Creating these three products is rationally smart - it leverages all sides. Activity on X and on the podcast originates new leads, new funnel distributions to the terminal, the monetization product. Let me explain how. The social media presence creates the first foundation: it unlocks the first users, the testers, and validates the MVP fast enough. You could see it - they rapidly passed 10k followers on the podcast X account and more than 1,000 users inside the terminal telegram group chat. A super active community, only possible because they have social media validation: people know them. X sends users over to listen to the podcast; the podcast creates more trust, reliability and validation, because they know what they are talking about - they are putting their energy and their reputation into the things they say, and that is valuable in the modern era. Eventually both funnels originate leads, as more and more people come inside the network. If people like what the founders are saying, you trust them; and when they create a product that really helps you on your trading journey, you want to be involved - you don’t want to miss it. These two products bring people in, talk to them, and help them make money, so you follow the products that help you achieve that goal. It is worth the shot; it is worth getting involved. The terminal is the final format for monetizing the network in a valuable way. All these people circulate between the podcast and the social media, consuming information and alpha for free; eventually they will use the terminal as the final validation and fit. The strength of the network will strengthen the terminal’s users. It is all interconnected, and the terminal is the final product that connects all the dots and generates real revenue for the network creators and for the token owners. The playbook is real and smart.

At first sight there is a limitation on the token’s upside: it is connected only to the terminal, not to “all the network.” But eventually all revenue ends up on the terminal. All real customers - the ones able to spend a little capital on this network - end up spending it on the terminal. The terminal is the fair product to monetize, with a user return above the user cost: the monthly value a retail user gets from the terminal is above the monthly cost. And this is how you monetize your audience, your network with ethics.

They just need to create reasons for the listeners to spend on the terminal. So far, there are multiple reasons: trading-reasoning chat functions, injected frameworks, simulations and computations, 1-1 chatting with the founders on the highest-tier plan, and so, so on. There is already real validation of the product, and for any retail trader who aims to be profitable, the 1000x terminal is a good terminal to be involved with.

From broken chat to workable product

It didn’t start this way. When the product started being launched 2 years ago, there were a lot of things broken.

The terminal pivoted from a broken chat function - a ChatGPT wrapper, failing multiple times, dumb conversations - to a workable product. They changed the team behind it, changed partners, and changed the terminal’s positioning. I believe there is still a lot that can be improved, a lot that can be done - and that is the next upside wave I can envision. But attention is required for them to build the customers needed to lead this retail-driven product, and that is the network’s value.

The market is bigger than it looks

Many say the size is not there - that the market for serving retail traders is not necessarily big enough to drive value to the token. I couldn’t disagree more. The TAM is not that small if we only consider crypto trading onchain, and it is much bigger when you expand the vision to all the centralized cohorts and other markets. The network starts as a crypto-first podcast, not yet moving directly to commodities and equities trading as well. You could 1000x the size of the TAM when the terminal is able to expand their own industry-focus.

There are over 7m unique addresses on the 6 major chains: Solana with 3.2m DAU; BNB with 2.7m; Ethereum with 509k; Robinhood Chain with 323k; Base with 274k; and Hyperliquid with 7.5k on the most recent data - with 150m daily transactions on all those chains combined. This is not a tiny market; these are numbers that can justify serving this community of onchain buyers and sellers (degens).

Of course, we have to discount all these unique addresses down to a more tangible number of humans behind the wallets. Many are just bots or sybils; other users have multiple wallets and are present on multiple chains. There is a huge discount on this number: from 7.1m DAU shared across these 6 chains, we get approximately 150 thousand potential humans behind those addresses. We should take this adjusted number as our tangible market for a retail product that touches these users - unique users who are onboarded to onchain finance and degen enough to live onchain and test a crypto-focused product.

Because all crypto-traders have at least one active wallet running daily, these onchain users are a good proxy for the humans who could be interested in the 1000x terminal.

On top of these onchain humans, there is a crossover follower count of over 130k on X, more than 10 thousand on YouTube, and more than 1 thousand in the Telegram chat group. They have a reach of more than 100 thousand people, whom they must try to convert to the product they created - the one that provides the highest value-add to these followers.

In a well-executed environment, they should be able to expand this network, maybe doubling every year, and they should be able to absorb at least 5 to 10% of their reachable market. That is the core goal, and it is what we try to engage here as a possible TAM - taking the huge assumption of well-executed management. This is over 20 thousand users eventually converted to the 1000x terminal.

So far the 1000x terminal has a single point of creating cash: a subscription model. As they grow, they can scale to more than one source of revenue: top-up revenue (as users reach their token-spend limits); AI portfolio-management tools; an information system; allowing direct trading inside the terminal; and more. Many are the products that can be created as soon as they drive their audience to their good terminal. The most direct ones are: Subscription model; TopUp model and direct trading fees.

Valuation: the PWERM Grid points to $45 to $55m FDV

The ability of this terminal to generate real revenue is valuable. They own and control a network of traders, and they move them to a product that is cheap enough and helps them be more profitable. They are growing the pie of traders inside their network and merging them into a terminal that will help them. Under a PWERM Grid simulation, we get an expected value for the token representing this terminal, under the assumption that they run three direct products on the terminal. At scale this will be a much bigger product - a much bigger difference - and they should be able to monetize that difference as they scale the types of services they offer inside the terminal. At the end game, users should be able to watch the podcast and interviews inside the terminal only, with YouTube as a delayed distribution channel. That, I believe, should be the goal for this terminal: a place where traders live inside - open chats and discord-type functions live there, alerts, a mobile application, and agents alive to help traders do their work, particularly retail traders. At scale they will grow the market’s pie and move in multiple directions, particularly the podcast.

Putting numbers under assumptions and hypotheses: there is, of course, a scenario where I am super wrong - the founders fuck my vision up, change plans, or just get tired. I am humble about that, even being delusionally bullish, and I need to give a reasonable probability to this “go-to-zero” possibility. I assign that scenario a 20% probability - significant; it could happen. There is another 25% probability that the project sits in survival mode: some users, but struggling to grow. That, I believe, is what the market is pricing now, at $1.5m market value. There is a 40% probability of them generating some traction - getting users and reaching a 5% market share of the users we track - and then 15% distributed across the growing and winning scenarios. On a PWERM Grid distribution, using two different methods, we end up with a proper current value - without expanding much the level of reach they can achieve - an expected value of $45 to $55m FDV, meaning a direct 30 to 37x increase on the current FDV. I believe the market is not pricing the token correctly: it is not considering the upside if this all works out, not considering the short-term direct expansion vision, not considering the risk-return trade here - and, realistically, not believing in the value of the founders. I take the other side.

I am trying to be rational about a short-to-medium-term fair value for the current project, taking probability assumptions under multiple scenarios. And, being honest, I am not considering the value they can generate by growing the network and expanding to a multi-asset industry - commodities, equities and crypto. That is the clear expansion.

Now the 1000x terminal offers two plans: one at $12.5 a month, the other at $100 a month. The terminal is now offering derivatives and options flow, whale tracking, Polymarket access, TradFi backtesting, Python execution, and a memory system - all sitting on an Apache Iceberg and AWS S3 vectors data layer.

There is a lot to expand. Fundamentally.

The ANSEM case study

On June 17, someone anonymously deployed a token called ANSEM and airdropped 650m tokens - 65% of the supply - to the trader-KOL Ansem. Ansem is a crypto-native OG personality who used to share screen time with Avi on the podcast “Untitled Crypto Podcast,” published under the account “UpOnly” 4 years ago, when both were 26 years old.

Ansem owns more than 1 million followers on X. He embraced the token and published a paper with his own thesis on it - and, spoiler alert: it matches.

The ANSEM token reached a $450m FDV at its peak on July 7, 2026, a few days ago, and is now trading at around $200m FDV. I am not attempting to discuss the fair market value of the ANSEM token, nor pretending to say whether it is fairly valued, overvalued or undervalued. I take this token as a good proxy for 1000X: the playbook is very similar, and together they are creating a new sector of the “creator economy,” driven by two well-connected crypto-OG traders owning a network of traders with retail-focused products. Let me explain deeper.

The same playbook

Ansem was able to create this level of attention by embracing the token, under the narrative that this token represents his own audience and the products he is involved in.

What is ANSEM, the token? The immediate view is that this token represents Ansem’s ability to generate continuous attention for this memecoin. But it is not only that - that minimizes the vision of Ansem. Ansem owns two other products: BullpenFi, and a podcast called “MarketBubble.” The same playbook is playing out here: he is creating a network of crypto-interested people - this is how they bring their community together and create knowledge and expertise - pushing users from the social media account and creating a network using a livestream platform called MarketBubble. This network is valuable because, at the end, they are able to move a significant audience to go trade the markets using their own product, BullpenFi. BullpenFi is the monetization layer - it is where they are able to monetize their own network. Do you see the similarities? They are there. The vision is “the same.”

You are seeing a very similar playbook in ANSEM and in the 1000X token. These two tokens set a new market - a huge market that can attach multiples to a memecoin with a foundation that can generate real revenue, distributed to the token that represents it all.

I am not arguing that you should buy one or the other. But clearly the market appreciates ANSEM. 1000X was much sooner; it just didn’t start gathering the attention required to own the market and convert it into a max valuation that expands the vision.

The moat: the “creator” token

The playbook is smart - super smart. They understand the industry, and they understand where we are going: a world of hyper-gamification, hyper-trading. The retail community lives on the internet, watching people talk, giving feedback, and sharing information. Retail people are now the market. Trying to directly monetize your audience is unethical - and these are super legit OG crypto traders; you never bet against them. They really understand the crypto industry, and they are willing to monetize if they are able to give a positive EV on each dollar their audience spends.

The moat sits in the creation of a new “creator” token - one that represents not only the attention of the founders, but their network and the revenue of the product these founders created. This is a much bigger vision, a palpable market.

Relative performance: up 40% since Jan-2025

In comparison, 1000X is not performing as badly as you would expect for a $1.5m FDV token. It is up 40% since Jan-2025; BTC is down more than 30%; VIRTUALS down more than 85%; and AIXBT down more than 95%. In relative comparison, 1000X is a token that has held up well in this bearish market.

Execution

I can’t say that execution has been perfect. We should not expect it to be. From studying many other startups, I believe a better execution can be implemented. But it is unquestionable how good they are at this new “plan”: creating a network that leverages, by consequence, all the rest.

Zoom out a little and we see ups and downs - and we are now in a comfortable place, where I believe the floor is in - in terms of price and product execution. There are no active sellers of the token, and the product sits in a comfortable place to engage real users. There is no blockage by Blockworks, and the network is live - no “forced” sponsors; they created an entire new format. The vision is now clear: since May 2026 they have been building the 1000x network they envision. The 1000x terminal is now much more aligned with the network vision than with the Blockworks vision.

The follow-up steps are clear: improve the terminal and the chat function - make it much smarter. Unlock agentic frameworks, where a user can develop agents that live on the terminal. Put the 1000x network live on the terminal, with some social-engineering tooling. Research can be published on the terminal - independent writing, with access to data the user can validate under this format - and agents can validate the research each one publishes. Create a much bigger vision with the terminal: being creative and engaging with the network of real people inside a terminal that has real users there - watching, reading, talking, communicating, chatting. A real network. And the market is big.

Things they can improve on the terminal

1. Integrate the podcast videos and livestreams inside the terminal. Give subscribers some early watching, or behind-the-scenes type content.

2. Build an internal chat network on the terminal, where people can in fact share trading opinions. It creates community-trading.

3. Create advertising for the terminal that runs on the podcast - if you are publishing any advertising, publish your own product.

4. Eventually allow people to see charts and trade on the terminal. You will generate a lot of fees.

5. Integrate voice chatting - like calling traders to check what they are saying.

6. Build a BD team that is out there closing deals and partnerships.

My position: Buy and hold

I wrote about 1000X ventures in November 2025. I was bullish, and I had a position. I continue being bullish, and I increased my position. Since that time, a lot changed fundamentally, and a lot happened in that period. I experienced extreme downs on the token price, and also on the management team; I felt the product being near the end - but I also felt the “never give up” mentality from the founders. These two create a level of trust and stickiness. Doubling down in the worst possible moments was one of the key bullish variables.

Since the launch of the token project in December 2024, I have done my due diligence every day. I believe there is no other person better than myself to manage and update the 1000x thesis.

I love to adventure on a publicly traded venture. I feel all startups should be this way, where you can feel and identify the volatility as new headlines, articles, and posts come live. People undervalue the quality of work that can be done when a venture-style investment trades in a volatile market. Volatility hits my neurotransmitters and strikes a dopamine rush. I must manage my dopamine and hold through the volatility, in a well-executed long-term plan - always keeping in mind that this is a -1x or +20x payout. In risk-reward terms the odds are on my side: if each payout carries a 50/50 probability, my expected return sits well above any possible benchmark. So I hold.

Thanks,

Joao

1. Round-tripping (rallying above the IPO price, then falling back to it) is normal, not an anomaly.

We are looking at a stock that ran +67% above its IPO price in a few days and now trades -10% below it-one of the hottest companies in the world. It sounds irrational, unreasonable. We are not trying to explain why; it is statistically normal: across 80 previous hot IPOs that performed at least +20% above their IPO offer price, 68% came back to the IPO price again.

2. Reclaiming the IPO price line is meaningless.

90% of round-trippers closed back above the IPO price within 6 months, but the median fell a further 38.9% below it within a year.

3. The IPO touches happen on elevated volume.

This supports our hypothesis about the “promise that has been lost”: there’s a cohort of holders who sell, no matter what, if a stock reaches the IPO price again-and this cohort significantly increases the tradable volume.

4. The touches usually come too early for the sellers to be insiders.

There’s a 126-day lockup period before insiders can sell. Futures are, in a way, providing this hedge for some players; many of these short-sellers are probably serving as exit liquidity for some insiders as well, under OTC deals. There’s a lot happening behind the curtains, but it’s clear that direct selling pressure from insiders is not what is pressing the stock down.

5. Expected returns are not positive.

The median 1-year outcome is bad, -24.3% vs. the S&P 500, while the mean is +46%. Huge recoveries coexist with a deep left tail.

The cohort of assets being analyzed

Within the universe of all IPOs that happened over the last 50 years, we should bucket them as follows:

- D1: All stocks that closed at least +20% above their IPO price at some point within 3 years.

- D2: Stocks that round-trip-traded at least +20% above the offer price and later retouched the IPO price.

- D3: Broke-issue stocks-traded at/below the IPO price within the first 5 days, without ever qualifying first.

- D4: Stocks that qualified but never came back to IPO prices-straight up.

- D5: Day-1 pop buckets-oversubscribed/hype.

- D6: The SPCX-specific cohort-centered on the D2 bucket.

- D7: Slow-breach stocks-never traded above the IPO price.

Forward expected returns.

The biggest takeaway here is that the median gets worse as more days pass, with wider results. This is a nothing-burger result: even without much rationale, we could expect this outcome to be true. Only the good stocks performed well over the long term, and the majority of them will worsen in performance as more selling pressure appears. The wider results give us upside on the good stocks, with huge upside for the really good ones.

While the median gets worse as more days pass, the probability that a particular stock recovers its loss is high: over 90% recover back to the offer price within 126 days. Expect a stock to bounce back to IPO prices. It is the norm, not an anomaly. You have time, but not infinite time, the stock-price will react.

As we expected, volumes increase at IPO offer prices. This is led by the “promise that has been lost”: a predictable outcome where those IPO buyers sell directly at IPO prices, no matter what, under this mentality. So volumes increase, and volatility offers that upside as well. High-vol instruments benefit under this curve.

Historically, bounces don’t happen because of lockup unlocks. It is true in crypto and it is true in stocks. The market prices it in long before the lockup: investors hedge using futures instruments, and they can pay for safety under OTC deals. There are many ways to hedge your position, and many ways to sell your insider holding. You should not expect the selling pressure to happen on the day of unlocks. Usually, this signals an upside surprise around those dates.

But there’s a problem with the most recent IPOs: when we measure the IPO drifts (the post-listing price trend), a cascade of performance appears as we enter the 2020s era. Many say that: “This is led by the higher multiples; IPOs are priced with much more upside, at perfection. Public-stock investors are different from private investors; they need another level of economic input. Buying expensive futuristic-visionary promises is not in their mandates.”

As years pass, you should expect higher volatility, more swings up and down. There’s an upward movement in stocks coming to IPO at higher multiples, under much higher market caps. There’s apparently no upside for public investors at these stages; private investors squeeze the entire juice for years. But this is fundamentally wrong as a statistical assumption.

At first, this seemed reasonable, true-the core reason why the post-2020s era proved out a worse median. But higher valuations and higher multiples are not the real reason. There are literally zero or negative Spearman rho correlation numbers, at a 95% CI.

If I would take a lesson under this quantitative analysis is that: we can’t use market IPO valuations or multiples to predict higher drifts after a round-trip scenario. We can’t say: “At these valuations/multiples, there’s no juice to squeeze.” This is false.

This means that assuming SPCX will drift more-because it was the most expensive, higher-multiple/higher-market-cap IPO that ever happened-is a false assumption.

Even saying that, and taking this into consideration, there’s a wide spectrum expected for SPCX when we simulate how SPCX could fill those buckets.

Great companies tend to touch and go back up. The top >p75 cohort of stocks. Time to see how SPCX trades.

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Thanks,

Joao

Hyperliquid no longer trades as a crypto-only story. In just 9 months, HIP-3 - builder-deployed perpetuals on stocks, indices, ETFs, commodities, FX and pre-IPO companies - has come to carry a third of all volume on hyperliquid, and it is now the platform’s biggest volume driver. That changes what we are valuing: HYPE trades the all-exchange narrative now, not only a decentralized crypto perp venue.

Strip HIP-3 out and the stakes get obvious. Volumes would fall by more than 50%, the venue would basically be BTC-trading only, and HYPE - $70 in early July 2026 - would sit at $10 to $20.

But the pillar has a crack in it. HIP-3 is, in practice, one company: tradeXYZ runs basically 100% of the market, a clear monopoly whose founder stays anonymous. So the regulatory threat that matters is second-order - enforcement against the deployer, not against the platform - and if TradeXYZ goes, Hyperliquid’s biggest market goes with it. No risk to Hyperliquid is more structural than this one.

The scenario work prices it. Across the Down, Stable, Up and UpUp grid, expected value comes out at $17.4b MCap against a $15.3b market cap - the market has, in a way, already paid for the base case, and there is not much upside left at the current price. Near a $10b valuation, the long could get super interesting.

The re-rating case is conditional, not priced. Take “growth mode” off 50% of the market with TradeXYZ still the monopoly deployer, and direct HYPE-holder economics clear $100m a month - multiple math that points to $30b, +100% from here. And timing beats pricing: this is HIP-3’s first summer, and I could see August and September being its worst months for volume; under these conditions we should buy (no matter what) in mid to late September.

(Gmail: joao@atiscapital.net ; Tg: jbbaptista)

Phase One: A Crypto Exchange on the Crypto Cycle

Hyperliquid has been alive with trading data since 2024. Hyperliquid was a phenomenon early on: in just a few months it reached over $100b in monthly perp volume. The clear inflection point came in 2025 - entering 2025 with over $100b in monthly perp volume, then reaching peak volume of almost $400b in August 2025, 9 months later, a net win of +166% from the beginning of 2025 to the August peak.

I divide the Hyperliquid story into two phases, and it is with this two-phase approach that we are going to analyze Hyperliquid: the first phase, before 2025; and after 2025. Being explicit: pre-HIP-3 and post-HIP-3. HIP-3 changed Hyperliquid’s entire position, fundamentally changing where they sit on the everything-exchange route. It changed the ability to monetize, and to grow in every possible world environment. In the pre-HIP-3 era, Hyperliquid was dominated by crypto token volume - it was naturally built for that - particularly with the growth of ETH trading, which peaked at +58% more volume compared to BTC. ETH reached approximately 45% of the total market share of all Hyperliquid perp volume and peaked at almost $180b of perp volume in the single month of August.

In this period, ETH performed well: 3-month performance over +76% (June to end of August), and +141% in 6-month performance (the 6 months to end-August). The volumes were justified by this aggressive token performance. We can’t claim causation, but we can see a high correlation between volumes and the price increase. ETH traded from a low of $1,484 to a high of $4,837, while monthly volumes grew from $40 to $176b over the same period.

We see a high correlation between price and volumes - they are widely correlated. Reflexivity: when prices come down, volumes reflect the same trend. After the August peak, ETH went down, and we expected Hyperliquid perp volumes to go down with it, in correlation - which proved true.

Since August and particularly until 2026, all volumes came from crypto tokens. ETH dominated the entire market, owning at peak a 45% market share and crossing BTC volumes in July.

But it held for only a short period of time. In August, and particularly on October 10, the market rotated bearish, suppressing prices and volumes across the majority of crypto-related tokens. The ETH price is down more than 60% since the August peak, reflecting unsurprising pressure on Hyperliquid’s perp structure. We are going to talk about this more deeply further ahead.

A quick note: with all the rest of the tokens suppressing volumes, BTC volumes remain stable. By comparison, ETH previously traded $176b in a single month and is now trading only $30b in June - down 83% from the August volumes.

But in 2026, something changed fundamentally in the Hyperliquid venue. We see a big red wave capturing volumes on Hyperliquid. Underlying this new era is the rising expression of an entirely new market: the HIP-3 market, allowed since late 2025 but best represented by the growth of tradeXYZ. HIP-3 is now the biggest volume driver for Hyperliquid, fundamentally changing how we value Hyperliquid.

The mix tells the story. In the first era of Hyperliquid, the sustainability and health of the business were directly affected by crypto market performance - 100% of volumes came from crypto token trading. Now, having multi-funnel trading instruments is a much healthier and more sustainable position, less impacted by the crypto industry. The market share of crypto volumes is dropping from 100% to 68%. This trend tends to keep moving down; I expect crypto trading to represent as low as 25% of the overall trading inside Hyperliquid. We can’t deny that crypto trading still has a huge impact on Hyperliquid economics, but the trend is moving toward less and less relevancy, after the launch of HIP-3 and eventually the growth of HIP-4.

Without HIP-3, Hyperliquid Would Be a BTC-Only Venue

Let’s just imagine what the current numbers would be without HIP-3. Volumes would be at $180b, dominated 50% by BTC trading (June with $90b of BTC volume) - volumes dominated by BTC and the rest, with ETH at $30b of monthly volume.

Volumes would be down more than 50%, with a BTC concentration at 50%. Hyperliquid would be a super-concentrated trading venue - basically a BTC-trading venue only. It would carry a tremendous amount of risk attached to the bitcoin price, and not much forward upside without diversification of its economics. $180b of monthly volume against the real number of $266b (June 2026) represents a gap of less than $80b of volume and a decrease of over 30% compared with the real, with-HIP-3 economic data.

Consider where HYPE is currently trading: $69b FDV (July 3, 2026), with a monthly trading volume of $266b - annualized, just for expression, $3.2T - printing a price to annualized volume of $0.02. Revenue sits at $60m for the month of June - annualizing, just for expression, $720m of annualized revenue - for a PS of 95 considering FDV, a 21.5 PS considering the $15.5b market cap, and a 54 PS considering the $39b of outstanding token value.

The point here is that high multiples are being assigned to the instrument that best represents Hyperliquid - HYPE - based on the promise that new revenue funnels can be generated, and that Hyperliquid keeps buying back the HYPE token with those revenues. To increase the burning velocity, Hyperliquid must generate higher revenue - meaning more volume funnels and higher data numbers.

At the end of the day, Hyperliquid economics comes down to volume numbers and the ability to monetize those volumes. With 30% less volume without HIP-3, the real volume number is 30% lower - and on top of that, the expected future volume number would be much lower by reflection. The market would price HYPE at a much lower multiple - probably half, or even less - as a consequence of lower expected volumes, which would also show up in lower revenues, pressuring the HYPE token even more. Without HIP-3, and taking a huge assumption, we could see a PS on market cap of 5 to 10 - a 50 to 75% decrease - and revenue 10 to 25% lower than we have now. Meaning we would see HYPE prices at $10 to $20, and not at $70 as we are seeing in early July 2026. Even worse if you run this calculation actualizing the future cashflow value of Hyperliquid with or without HIP-3, lowering future multiples.

But HIP-3 exists, and it gives the market confidence that Jeff, the prodigy, has the ability to generate new trading venues, new volume sources - the ability to drive different waves as the market grows, creating an all-weather platform in which all civilians can participate, from traders to enterprises to issuers. Today Hyperliquid has two structural waves flowing: crypto trading, and HIP-3 trading creating powerful economics going forward. The third wave will be HIP-4 - already launched in June 2026 - predicting a new wave flowing in parallel to HIP-3.

The Hyperliquid management team’s ability to pursue new markets with perfect timing - creating the ability to generate new volume funnels - is what gives HYPE its high multiples and its deserved market value. Where in the first phase volumes came from crypto trading, the second phase is now being pushed by tradFi trading - commodities, stocks and even currencies. It underwrites the management team’s ability to pursue new ways of monetization, with high efficiency. HIP-3 and HIP-4 are both already launched, pursuing a high expected value.

HIP-3 produces positive fundamentals for the value of Hyperliquid: it lowers the correlation and concentration to the crypto industry; it creates a multi-funnel revenue stream; it creates an all-weather revenue situation; and it smooths the volatility of the revenue. Hyperliquid volumes are much stronger with HIP-3, and they will be even stronger when HIP-4 reaches its velocity. HYPE is now trading the all-exchange narrative, not only as a decentralized crypto perp venue.

HIP-3 Volumes Are Ripping

Even with the innovations, August volumes have not been reached yet. The forward probability of reaching those numbers is high, but in reality we are already 6 months past the peak and have not yet reached new highs in terms of volumes, in a situation of hot stock market. I see a high probability of reaching new highs by year-end, just with the consolidation of crypto markets and the growth of HIP-3, but still a future reality, not a present reality.

HIP-3 volumes are ripping - growing +37% last month, reaching above $85b in monthly volume, and probably achieving the $100b monthly volume benchmark in a few months. HIP-3 is an impressive product: in just 6 months, HIP-3 grew from less than $10b of volume a month to over $80b - growing 8x in 6 months.

The TAM to grow this market is not the real problem. Robinhood traded over $300b of equity notional in spot volumes, and perp volumes usually run 10x higher than spot volumes, judging by Binance and Bybit relative volumes. Robinhood, at above $300b of notional equity monthly volume, is trading 25x more than crypto notional. It signals extreme upside. For comparison, HIP-3 volumes remain 0.47x the crypto trading volume; if this reverts (as the current trend is supporting), converging toward the Robinhood data, we can see trillions in monthly volume in the near future - just by pushing HIP-3 volume above crypto volume.

The volume profile has already changed a lot, and the trend is strong for a continuation. 1/3 of the volumes are now dominated by BTC trading, 1/3 of the volume comes from HIP-3, and the other 1/3 goes to other crypto tokens. The volume dominance now sits in BTC trading and the HIP-3 markets - bitcoin still being the single most tradable asset on Hyperliquid.

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What HIP-3 Actually Is

HIP-3 represents a third of the entire exchange in just 9 months. To understand the new Hyperliquid era, we must have a sense of what HIP is.

HIP stands for Hyperliquid improvement proposals. HIP-1 is the native token standard - the launch of native tokens with onchain spot orderbooks. HIP-2 was the hyperliquidity proposal - the operator-less market-making strategy built into the chain itself, for all HIP-1 tokens: the launch of HLP. HIP-3 is builder-deployed perpetuals: it unlocks the ability for anyone who stakes 500k HYPE to deploy and operate their own perp exchange on Hyperliquid’s infrastructure - including stocks, indices, ETFs, commodities, FX and pre-IPO companies. HIP-4 is the outcome markets: it allows fully collateralized contracts that settle within a bounded range, the primitive for prediction markets and binary options. These are, so far, the 4 proposals that unlock what Hyperliquid is today.

HIP-3 is not directly attached to stocks and commodities, and it was not directly forced by the Hyperliquid core team. Hyperliquid created the rails so that anyone who stakes 500k HYPE could deploy their own perpetual-futures exchange running on Hyperliquid orderbooks, matching engine, margin system and liquidation infrastructure. The deployer chooses what to list, defines the contract, and operates the oracle pricing - and deployers set out to list TradFi assets because that market is a lot bigger, and crypto was already dominated by Hyperliquid. Hyperliquid provides the exchange machinery - the infrastructure - and the deployer provides the markets. It is a super-connected ecosystem of Hyperliquid and deployers that independently manage their own markets, benefiting from Hyperliquid rails and assuring that their clients will be able to trade with efficiency, relying on Hyperliquid infrastructure to do so. With this proposal, Hyperliquid moves away from being the originator of new markets, creating the rails for independent deployers to own their own markets.

Discipline is managed by the Hyperliquid validators, with voting power to slash a deployer’s stake if there is degradation, downtime, or invalid state transitions; deployers can be slashed by 20%, 50% or even 100%. Slashed HYPE is burned, not paid to victims. So far, no slash has occurred, but it is a way to manage deployer efficiency and build trust between the parties.

HIP-3 had a bunch of partners, and Hyperliquid wins by having multiple deployers - each one stakes 500k HYPE. But so far, only one deployer really grew and was able to drive under HIP-3: TradeXYZ.

TradeXYZ Is HIP-3

TradeXYZ today controls basically 100% of the entire HIP-3 market share alone. It is a clear monopoly in HIP-3 contracts, launching commodities, index, equities, ETFs, and pre-IPO instruments. TradeXYZ owns almost a third of the entire Hyperliquid volume, and it is now the most relevant partner for Hyperliquid core.

TradeXYZ’s execution has been perfect, absorbing the entire HIP-3 market. To analyze HIP-3 is to see a reflection of TradeXYZ. TradeXYZ proved the ability to grow - growing by single-instrument volume and by adding more instruments live. It grew the monthly volume first, particularly during the Iran war, allowing traders to trade OIL-perp instruments 24/7, with liquidity - publicly used on the New York Stock Exchange floor. TradeXYZ rapidly won the commodities category, then expanded into all the other categories, now dominated by equities and index trading volumes, reaching above $80b in monthly volume last month, June 2026. The origination of volumes changed with time, but the ability to dominate every market is, for lack of better words: euphoric.

In 8 months, TradeXYZ grew from $0 to $80b in trading volume, with 95 different instruments. It launched 14 new instruments last month, June 2026. At this level of scale, by the end of the year they will double the number of instruments tradable inside their own HIP-3 platform.

Execution and growth have been flawless: the ability to scale monthly volumes and push new assets live, growing in multiple directions - a higher quantity of instruments live, and higher volumes per instrument. By July 3, the single asset with the highest notional is CL, the WTI crude OIL instrument, with a notional of $31b - a total of 19% of all TradeXYZ (HIP-3) notional. Other commodities like SILVER, and then the XYZ100 index, hold second and third place, with $26.8b and $26.7b respectively.

TradeXYZ is in complete rocket mode. It is trading $2.4b of notional volume on peak days, and its growth is sustainable WoW, MoM. With the incremental addition of new instruments - dominating all markets and unlocking new assets for Hyperliquid - now that the machine is built, the scaling laws just allow more and more instruments to be traded on Hyperliquid, acquiring every possible market to unlock the everything-exchange promise.

And the mode is exponential - growing more categories and the overall cumulative volume.

A market whose growth was once dominated by commodity trading is now growing through new hyper-growth categories - equities, index, pre-IPO - trading more notional volume than commodities. Equities are trading $2.7b in weekly notional volume, and commodities are at $0.9b in weekly notional volume. Mark that even within the HIP-3 segment, the rotation across multiple instruments and multiple categories holds true. TradeXYZ’s ability to pursue more instruments generates sustainability in their volumes, which reflects into Hyperliquid’s volumes as well.

Risk One: Nobody Knows Who Runs TradeXYZ

TradeXYZ’s execution is solid and their economic data is solid - but what is tradeXYZ, and who are they? What do we know about the management? Can we underwrite their ability to continue at this growth level? By underwriting tradeXYZ we are underwriting HIP-3 sustainability, which reflects across all of Hyperliquid’s health. The deployer controls the oracle for each instrument - one of the most important and vulnerable bricks. Let’s explore.

TradeXYZ is a perp DEX that deploys on Hyperliquid core. The founder remains anonymous: we don’t know who he is or where he is. But the origin is tied directly to Jeff (Hyperliquid’s founder) - the tradeXYZ founder’s decision to build tradeXYZ is attributed to meeting Yan and to conviction in Hyperliquid. The founder is anonymous, but at least he has personal connections with Jeff. Even knowing that Hyperliquid is, in a way, directly tied to tradeXYZ - and surely trusts the founder - the public markets have no information on who he is. $80b of monthly notional volume is trusting a company whose founder prefers to stay anonymous (we live in 2026, in AI era). This is only possible because they are deploying on Hyperliquid, their execution is impressive, and they partner with S&P Dow Jones Indices for their S&P 500 perpetual contract.

Not a single source discloses the founder’s real identity, nor any city, country, or jurisdiction of operation. There is one named executive, disclosed because of S&P Dow Jones Indices licensing the S&P 500 to the venue: Collins Belton is quoted and identified as COO and general counsel of TradeXYZ. But other than Collins Belton, we know nothing about the management team behind tradeXYZ. This is the single most important structural risk for Hyperliquid: this one deployer owns “all” of the HIP-3 market - owning 1/3 of the entire Hyperliquid total volume - and it is growing at an extreme level of scale, eating the entire Hyperliquid volume and eating market share from all competitors.

Risk Two: The Oracle and the Corporate-Actions Gap

The HIP-3 operating stack is composed of three layers: 1. HyperCore, managed by Hyperliquid, runs matching, order types, funding settlement, liquidations and auto-deleveraging - onchain execution, with decisions by the validators; 2. The XYZ protocol defines market listings, oracle sources, leverage limits, margin modes, and open-interest caps - decisions by the deployer; 3. The TradeXYZ operator runs the off-chain relayer fleet that prices every market and pushes updates onchain.

The TradeXYZ management team controls two layers, owning the relayer work: computing oracle, mark and external prices for each asset and broadcasting updates to HyperCore every 3 seconds. The operational risk is here - there are many areas that could fail. They partnered with Pyth and Blue Ocean ATS to provide a public pricing-reference source for the majority of instruments and for the US overnight equity session, respectively. There are many mechanics that allow tradeXYZ to trade, 24/7, instruments that are open only a few hours per workday, shifting oracles from external to internal pricing driven by their own orderbooks. Anti-manipulation systems and trader-protection systems must also be deployed, to guarantee there is no possible vector of attack.

But the risk is there: oracle failures, and single-stock corporate actions - splits, spin-offs, delistings, and so on - for which there is no adjustment policy published in any document. Operationally, there is a gap to note. The earlier SPCX precedent determined contracts on a price-based, no-rebase settlement: the default across all XYZ markets is to track the quoted per-share price through the event rather than adjust positions - inferred from the SPCX event, not from documented policy. That brings real operational risk to trading stocks through probable single-stock corporate actions. In a stock split, an apparent conflict between prices and the split could happen, and the resolution is unsettled.

TradeXYZ accumulates two sets of risks: 1. Founding/Management structure; 2. Operational. But there’s more.

Risk Three: Regulation, on the Binance Timeline

Both Hyperliquid and TradeXYZ sit in a very good spot in terms of economics, but in a devil of a position in terms of regulation. Neither is licensed or clearly legal in any country of the world - so countries like the US and Canada are banned, and the others sit in a gray-area position.

The numbers are becoming impossible to ignore. Hyperliquid and their deployers are rotating into a more compliant and regulated market (from crypto to tradFi assets), where the world enforces more licenses and higher controls. The two are interconnected in terms of regulation, but they have different regulatory structures.

Hyperliquid is decentralized at its core. It runs on independent validators - even if they are concentrated, they run a decentralized organization - and Hyperliquid creates the rails for new independent deployers to provide access to new instruments, creating perps for all assets. They don’t sit to control, operate, or own the equity, commodity, index, or any instrument for their clients; by providing access to these instruments, they create the rails for others to provide that service. TradeXYZ is the deployer allowing that access to perpetual contracts on all those types of instruments - and in a well-regulated market, with rules that block any unlicensed deployer from creating derivatives contracts on any instrument, tradeXYZ sits in a position attackable by the regulators. Making $100b plus in monthly volume on tradFi perp contracts without any license, or a public founder - it’s a three-legged chair.

Binance and Hyperliquid are completely different in many aspects: Hyperliquid is a wallet-based, non-custodial, decentralized perpetual exchange; Binance was an email-account-based custodial exchange. But in many ways they were (back in 2017 to 2022) very similar - serving derivatives contracts without licenses, KYC, or an AML program, and serving worldwide customers, including banned and probably sanctioned nations. On Hyperliquid, the incentive for sanctioned nations is very limited: the major product is synthetic, and either way it has been trackable by Bloomberg and ZachXBT. For Binance, that was a major IEEPA/OFAC issue.

Binance had three major phases. Phase 1: the growth phase, from 2017 to 2019. Phase 2: scale explodes, and the warnings. Phase 3: enforcement. In growth mode, Binance did everything possible to acquire and grow its user numbers and volume data. The first regulator to act was Japan’s FSA in March 2018, and in 2019 the administration mentioned that US users dominated 20 to 30% of their traffic. In the leaked “Tai Chi” document, Binance was doing $165-$450b a month in futures volume. That eventually led to the CFTC investigation in March 2021 to identify whether US residents were trading on binance(.)com - concluded in May 2021 - and a DOJ and IRS criminal-side probe; US VIPs alone were 63% of Binance(.)com VIP volume. The UK FCA banned Binance, and Japan’s FSA issued its second warning. Binance kept growing both its market share and its total monthly volume. Eventually, in March and June 2023, Binance and its founder were penalized - for serving US customers with no KYC or AML policies, for operating an unregistered futures commission merchant, for serving sanctioned countries, and with 13 more charges directly on Zhao, Binance’s founder.

Binance and Bitmex were clear examples of the enforcement - showing that regulators will force any rules onto unregistered commission merchants serving banned US clients. Even though Hyperliquid apparently “enforced” a ban on US customers, simply by tracking the traffic of their webapp URL we can identify the US as the top country in search results, owning 20% of the total traffic value. Many use VPNs, APIs and other offshore ways to get access to Hyperliquid. But the high number of searches for Hyperliquid’s direct webapp URL is publicly visible.

Hyperliquid today is trading $266b in monthly perp volume (without double counting), with $2.9T for the 2025 full year alone. Moving from crypto-only to an all-asset exchange increases the risk of regulatory pressure. So far, no regulator has acted against Hyperliquid, and the parties behind the administration are super important for measuring these risks - the Trump administration is pro-crypto and pro-tech, has taken no enforcement actions, and provided pardons to both the Binance founder and the Bitmex founder. This provides relief on regulatory pressure, but it still doesn’t solve it. They will open the gates or close them by enforcing any sort of rules and steps. There are no direct regulator attacks, but CME Group and ICE formally urged US regulators to scrutinize Hyperliquid over manipulation risks - the first warning signs from competitors that are being threatened by the growth of Hyperliquid. That happened in May 2026.

The risk grows as the monthly perp volume grows, and as they scale into serving tradFi instruments. We are at higher levels than the pre-Tai Chi leak, but a lot lower than the levels of the March 2021 Binance action.

The risks run along three main vectors: CFTC, BSA, and IEEPA/OFAC.

The CFTC vector covers the offering of leveraged derivatives to US persons without FCM/DCM/SEF registration and with no CIP/KYC. Hyperliquid’s HIP-3 equity and pre-IPO perps (SPCX as an example) sharpen the exposure: they resemble security-based swaps, where retail offering restrictions are stricter still and the SEC/CFTC boundaries are unresolved.

BSA - the Bank Secrecy Act - covers DOJ criminal charges for operating as an unregistered money-transmitting/financial institution serving US persons without an AML program. Hyperliquid’s legitimacy here rests on its non-custodial architecture: whether a validator-governed L1 with a bridge contract “transmits money” is untested. Clear DeFi rules must be published; the Clarity Act will provide guides on this.

The IEEPA/OFAC sanctions vector covers the openness to sanctioned-jurisdiction trades. Hyperliquid’s open access cannot exclude sanctioned users, and DPRK-linked trading (Lazarus-attributed wallets) is already publicly documented. OFAC has sanctioned smart-contract addresses in the past - Tornado Cash in 2022. Vulnerable.

Even with all these risks, Hyperliquid sits above all this pressure, and the climate under the Trump administration and the worldwide posture on crypto technology have changed 180 degrees. Meaning: the support that worldwide politicians are giving to crypto markets is much more aligned than it was 2/3 years ago.

TradeXYZ, the biggest deployer on HIP-3, adds a second, sharper legal layer on top, because of what it trades. Hyperliquid is a core contributor; it doesn’t operate. TradeXYZ is an operator - and an operator that touches securities and commodities. Perps referencing single stocks or narrow indices sit at the security-based-swap boundary, where US law requires SEC-registered venues and effectively bars retail participation. The May 2026 CME/ICE letters urging CFTC scrutiny of Hyperliquid specifically cited the synthetic stocks and oil markets - basically tradeXYZ products. This pushes tradeXYZ into a corner: even if Hyperliquid core is not being charged with any illegal action, tradeXYZ at scale could eventually be charged for operating these unregulated synthetic instruments, offered without KYC or AML to a worldwide user base. And this is the major regulatory risk hanging over Hyperliquid - the threat from regulation lands not on the Hyperliquid platform but as a second-order effect, on tradeXYZ being charged. And they alone control the entire HIP-3 market. If TradeXYZ is forced out of the market, Hyperliquid loses its biggest market in one stroke.

The Economics: What HIP-3 Pays HYPE Holders

HIP-3 is THE pillar of Hyperliquid’s growth. It is the reason HYPE is valued as it is. And it is the reason investors stack capital by owning the instruments that best represent the growth of Hyperliquid - HYPE.

HIP-3 is super relevant in the growth numbers, measured by huge market penetration - owning 1/3 of the total perp volume - with a clear uptrend. It is almost certain that HIP-3 volumes will flip crypto volumes; it is not far from achieving it.

The risk in regulation is real. The further question is to understand whether this HIP-3 growth represents a direct economic value transfer to Hyperliquid. How are synergies created between Hyperliquid and their deployers? What is the economic sharing program that allows both companies to grow together in complete synergy, with positive EV for both, sustainable long-term?

The deployer sits in a position to keep 50% of trading fees as a base: all trading fees generated are divided 50/50 between deployers and Hyperliquid, as a fair distribution. On top of that, there is a “fee scale” mechanism allowing the deployer to add a further 0-300% of fee growth, with one particularity: above 100%, the protocol’s own fee rises to match, ending up splitting all trading fees generated 50/50. This economic design allows the synergies to happen at all times, in all possible situations. The deployers get to decide the fee number, and deployers can compete over fees.

Hyperliquid wants to push HIP-3, as it is a much bigger market than the crypto market alone. To do so, they launched “Growth mode” in November 2025, cutting protocol fees, rebates and volume contributions by 90% to help new markets bootstrap liquidity.

“Growth mode” has worked. There is a clear trend through year-end for HIP-3 volumes to flip the non-HIP-3 volumes, as more and more instruments trade on HIP-3 through TradeXYZ and new participants aim to capture a portion of tradeXYZ’s HIP-3 market share by competing; more volume, in the aggregate, will compound. The non-HIP-3 and HIP-3 volumes are converging.

But in terms of fees generated through each HIP, they are far from matched. The core reason is the “growth mode” program, developed to bootstrap the initial growth of HIP-3. HIP-3, with $85b of perp volume in June, printed only $8.7m in monthly fees - an economic value of $0.0001 per volume traded.

Most of the fees are, to this day, still generated on the non-HIP-3 instruments - meaning the crypto-trading venues. Non-HIP-3 alone printed $58m in June, reaching new YTD highs in economic value created and representing almost 90% of total fees generated. Together they reached $67m in June monthly fees, growing +40% YTD in fees generated.

Not all fees are directly revenue, but a big portion is. For non-HIP-3 markets, each fee generated is distributed to builder-code apps, referrers, and HLP’s 1% distribution. In pre-HIP-3-launch data, approximately 78% of the value of fees shows up as revenue: in August 2025, pre-HIP-3 launch, Hyperliquid generated $145m in fees and $113m of revenue - a $31m wedge, distributed to referrers and builder codes.

For HIP-3 markets, all fees carry the conditions previously explained. TradeXYZ divides the fees 50/50 with the Hyperliquid protocol. 1% of the total fees still goes to HLP, and the rest goes to the AF - the Assistance Fund - to buy back the HYPE token. In real numbers, 49.5% of total TradeXYZ HIP-3 fees represent direct revenue to HYPE holders.

TradeXYZ doubled the protocol base (tiers can be increased by staking-HYPE, that discount base fees) to a 0.048%/0.09% base. In growth mode, for the majority of instruments, this base fee is pushed down -90%. Even with these massive discounts, Hyperliquid overall printed $8.7m in fees last month, with +502% YTD growth, on $85b in perp volumes. It is set to more than double by the end of the year, growing on average +15% MoM and reaching $20m in monthly fees for HIP-3 - with huge assumptions: that TradeXYZ keeps dominating the market, and without the catalyst of more and more tokens being pushed out of “Growth mode”. So far, we have only 4 instruments not in “growth mode” - GOLD, MSTR, PURRDAT and STRC - tokenized equities directly tied to crypto and gold.

Take a small assumption: that 50% of the entire market comes out of growth mode. We could reach $100m plus in monthly fees from HIP-3 alone, and TradeXYZ alone is able to reach a TTM fee number above $1b - meaning over $500m distributed directly to Hyperliquid. Keeping the same MCap/Fees ratio we are currently trading at, 17.9x Price to Fees, we reach a HYPE valuation, from HIP-3 alone, of above $9b.

Add the numbers from crypto, even predicting that crypto markets remain stable, without the “comeback” we are all waiting for. Hyperliquid is printing $58m in monthly fees from crypto trading; taking off the 1% HLP fee, we have more than $57m of monthly economic value being distributed to HYPE holders. Together, the non-HIP-3 and HIP-3 monthly economic value directly distributed to HYPE holders will be above $100m a month - taking the assumption that perp volume keeps growing once growth mode is off for half of the instruments, and that TradeXYZ remains the monopoly deployer. Competition will push volumes even higher but eventually fees lower, so one will balance the other; I am not taking a big net view on fees generation as the number of deployers increases through competition.

Put together, we are predicting over $100m a month of direct HYPE-holder economic value - meaning above $1.2b of annualized revenue - which at PE ratio of 25 (using the last TTM values for comparison) puts HYPE’s MCap valuation at $30b: +100% above the current market value of $15b MCap.

It also signals a rotation in dominance from the crypto markets toward the HIP-3 markets, where HIP-3 penetrates the dominant crypto market. HIP-3 penetration will not only dominate perp volume - it will also dominate the entire HYPE-holder economy, completely decoupling HYPE from BTC trading. Eventually, through year-end (with all the further catalysts), it dominates over 50% of all fees generated inside the Hyperliquid ecosystem.

Four Scenarios, One Expected Value: $17.4b

Let’s run a specific scenario analysis, taking some assumptions, to further understand the upside against the downside on the underlying instrument. There are four types of scenarios: Down, Stable, Up and UpUp.

The Down scenario is one where HIP-3 is completely hit by regulation: TradeXYZ gets penalized, charged, and made illegal in all countries for providing unregistered futures, plus all sorts of charges for illegal conduct that could happen. (It is a non-zero probability, but a lot smaller under the current Trump administration.) In this scenario, HIP-3 volumes go almost to 0%; other competitors probably emerge, but realistically volumes go down 90%. In this scenario I also predict new volume lows for the non-HIP-3 markets, everything affected.

In the Stable scenario, I expect the non-HIP-3 and HIP-3 values to remain stable - nothing changes, but June monthly volumes become annualized volumes by repeating the last month every month. (We could see a relatively high probability of this through year-end: as TradeXYZ consolidates the market, “growth mode” tends to end - it would probably end if volumes consolidated, but we did not assume that here).

In the Up scenario, it is both a positive +15% MoM increase for HIP-3 - doubling monthly volume - and crypto volumes growth in portion to last month growth. Here we are also predicting that growth mode is off for at least 50% of the instruments: as TradeXYZ consolidates and increases the number of instruments, it will remove growth mode as many more instruments consolidate.

In the final scenario - an extreme bull market - all assets’ volumes rise: non-HIP-3 volumes reach the previous August 2025 highs, and HIP-3 volumes double the non-HIP-3, with “growth mode” stopped completely. HIP-3 is now the dominant market for Hyperliquid, no growth mode is required, HIP-3 turns on the printing machine - and it becomes the major HYPE-buying force.

In these scenarios we are representing the spectrum of possible future outcomes. The base case is a combination of continued HIP-3 growth (Up scenario), a reduced number of instruments under “growth mode” (at least 50% of the current instruments off), and the crypto market remaining stable at last-month values (Stable scenario).

By assigning different scenario probabilities across core states and HIP-3 scenarios, we reach an EV of $17.4b MCap, on $1.1b of EV annual revenue and a compression of the multiple from 17x to 15.7x. The most probable scenario is the Stable core-state paired with the Up HIP-3 scenario, at a joint probability of 21.1%. The probability of doubling the market cap sits at 12%, and there is a 40% probability of trading below the current market cap, $15.3b, under these conditional (subjective, in my own opinion) scenarios.

At Current Prices, the Upside Is Limited

In a way, the price already reflects HIP-3 growth and a stable crypto market - so at current prices, the upside for HYPE is limited. If any data point suggests a change in these probabilities, it of course suggests a market valuation adjustment - but so far, at $15b, HYPE is pricing in all progress under my rational conditions. Around a $10b market valuation, it could offer an upside that would be super interesting for taking long exposure. I see huge upside across all market valuations for Hyperliquid, and for really long-term bets we could raise the probabilities of certain scenarios. For that, we should measure how big the market is. If Hyperliquid is aiming for bigger plays, how big is that market - how big is the TAM - is the only question that deserves an answer from me. And what is the reachable market for Hyperliquid, as a decentralized, networked, perp-led platform?

The Blue Sky: Sizing the Everything-Exchange

HIP-3 traded $86b in Jun-2026; if we annualize it, that reaches $1.03T in annual trading volume, in US notional. It is a non-zero value, but in comparison to other markets it is a very small number. FX spot trades $750T in annual notional; cash equities $360T in annual notional; equity index futures $335T in annual notional; commodity futures $134T. That makes the total TAM $1,639T, the retail-leverage SAM $420T, and the reachable-market-adjusted SAM $250T. $1.03T is a pickle on these massive burgers.

Annualizing the current HIP-3 market values, we reach less than 0.3% market share of the first layer - “L1 – Retail-Leverage SAM” - and 0.4% market share of the second layer - “L2 – PERIMETER-ADJUSTED SAM (de facto reachable)”. There is upside in capturing share of a market that already exists, and Hyperliquid can compete by providing innovation, openness and frictionlessness. Even a move to 1% triples the metrics - meaning we reach our UpUp scenario.

The blue sky for Hyperliquid is the initiation of the perp-equities era on the Hyperliquid platform.

It is a new, innovative product that did not exist before: it started with crypto tokens, and it is now being pushed to tokenized RWA. The perp/spot ratio in curated venues for BTC is 4-6x (with spikes above 20x). Consider the same perp/spot ratios for cash equities volumes as BTC has: on above $360T of annual volumes, that could represent $1,440T - $2,160T of annual volume for equity-perps - the reachable market. Even if perpetual contracts become standard in all platforms and Hyperliquid reaches a 1% dominance share, that should represent $21.6T in annual volumes - 21.6x the last month annualized, and 9x above the UpUp scenario: an extreme upside surprise. And we are not even considering the perpification of index ETFs, commodities, FX and others. CFDs represent a kind of similar product to perpetual futures, at least from the view of retail and leveraged trades; but, perps are a clear substitute for them, with a much better and more efficient derivative product.

TAM and future catalysts provide huge upside for Hyperliquid, the HyperCore network, and HYPE holders. But this is still a less predictable scenario: a lot has to be true for these outcomes to become possible. And it is not the case that the long term increases the probability of it happening, because of the regulatory unclarity.

The long term increases the probability of these extreme positive outcomes happening - if regulatory pressure is not considered. If it is taken into consideration, then the longer the time horizon, the more it also increases the risk of regulatory pressure. We can’t expect a decentralized protocol to control 10% of the world’s perpetual derivative volumes without clear and enforceable action from some major government. We are also not saying that Hyperliquid management lacks the ability to navigate those regulatory waves and create their own regulatory moats. But it is a super wide spectrum.

Time the Buys, Don’t Price the Buys

We always try to price the asset, but we could also try to time the buy, as Philip Fisher under the chapter “Five more don’ts for investors”, rule title “Don’t fail to consider time as well as price in the buying of a true growth stock”.

So, let’s try to analyze Hyperliquid’s fundamental value as we live through the summer. It is the time of the year when financial people go spend their bonuses on boats on the Mediterranean, open bottles at private clubs on the beach, and spend their 2-week unlimited-budget vacations. Market activity and high-value decisions are patiently put to the side, to be decided when all the analysts and seniors are back in the office - back to normal life, as the hot weather turns cold in New York City.

Let’s try to measure the seasonal impact of summer on Hyperliquid’s fundamental value numbers, through HIP-3 volume performance. Backtesting the historical performance of the S&P 500 shows that August and September are the worst months for S&P 500 performance - these two months, since 1950, have a negative monthly average return.

It is not only asset performance that declines in summer. Trading volumes (predictably) decline 12.5% on average (a midpoint of 10% to 15%), and CME volume declines roughly 9%.

Even if Hyperliquid’s history doesn’t show the same type of pattern, this is the first summer that HIP-3 is live and running. Until now, Hyperliquid’s volume numbers tracked the crypto industry. Now that Hyperliquid is deviating from it, this could be the best year for it: through HIP-3, volumes could be impacted by the “Sell in May and go away” mentality that has clear expression in tradFi assets.

It is still an open question whether seasonality is real for tokenized RWA perpetuals. This year will provide some signs of that, but I could see a high probability of it being the case - with August and September being the worst volume months for HIP-3 compared to all the months ahead, until July-2027 comes around again.

If this is true, we should attempt to time the buys, not price the buys. We should buy (no matter what) mid to late September, under these conditions, as we predict clear, highly probable future upside starting after September.

Big Note: HIP-4 Is Excluded on Purpose

In this research I am excluding all data for HIP-4, on purpose. HIP-4 could also be a huge driver of HYPE value - from prediction markets, but mostly by allowing the creation of options contracts. That is a market that trades $605T in SPX annual options notional. HIP-4, if well executed, could be the third driver of HYPE upside, with a force that could double the HYPE upside, and it could collide with the bullish season - but more data must signal that upside before I consider it a non-delusional, probable scenario.

Thanks,

Joao

Economics & Macro — Last24h Report 20260623 094757

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The dominant macro dynamic of this 24-hour window is a collision between two powerful and partially offsetting forces: a hawkish Federal Reserve regime inflection under new Chair Kevin Warsh and a geopolitical energy-premium unwind driven by the US-Iran interim ceasefire and the US Treasury’s issuance of a 60-day general license authorizing Iranian oil sales in dollars. Warsh’s debut FOMC press conference delivered a unanimous, forward-guidance-free inflation-fighting mandate — nine of eighteen dot-plot participants now project rates above 3.75% by year-end, Kalshi prediction markets moved to 57% probability of a 2026 hike, and Bank of America immediately shifted to a three-hike forecast (September, October, December) while Deutsche Bank projected two. The 2s10s Treasury curve compressed from 40 to 27 basis points — the sharpest single-meeting flattening in over a year — 2-year yields reached a four-month high, and the VIX broke above 19 from a sub-17 base, consistent with a genuine volatility regime shift following Friday’s $8.3 trillion options expiration. Simultaneously, the Treasury’s 60-day Iranian oil sanctions waiver — the first such authorization since 1991 — drove WTI to approximately $73–75 per barrel, down roughly $45 from the March peak of $118, with 62 million barrels of backlogged Persian Gulf crude preparing to exit. These two forces produce an inflationary crossfire: falling energy costs mechanically depress near-term headline CPI and PCE, while core and services inflation remains elevated — May PPI printed at 6.5% year-over-year and core PPI at 4.9%, the fastest wholesale inflation since 2022 — keeping the underlying pressure that drives Warsh’s hawkish posture firmly intact. The forthcoming May PCE release (Deutsche Bank consensus: 0.37% month-on-month, 3.44% year-over-year core) is the next critical arbitration point between these two forces.

The session simultaneously surfaced multiple second-order macro stress signals spanning distinct transmission channels. Japan’s yen broke through the 161–162 level — past the threshold that triggered Ministry of Finance intervention in April — prompting an emergency Katayama-Bessent online session and suspected direct intervention, with CFTC data showing 150,132 net short yen contracts near a record. The PBOC set the yuan midpoint at its weakest since June 8, the Korean won slumped on Fed hike expectations, and South Korea’s KOSPI suffered a 9.99% single-session crash — its worst since March — as AI-linked semiconductor concentration unwound violently, triggering Korea Exchange sidecar mechanisms. UK Prime Minister Keir Starmer resigned, with Andy Burnham (95% Polymarket odds) poised for installation by July 17; 10-year gilt yields held at 4.84–4.85%, with Pantheon Macroeconomics estimating 7–14 basis points of political premium from a Burnham premiership and analysts flagging Truss-era gilt stress risk if a non-market-friendly Chancellor is appointed. Emerging market currencies were under broad USD pressure — AUD/USD slipped below 0.70 to its lowest since April 8, the Thai baht hit a one-year low, and the Swiss franc lost support below 0.81 — all consistent with a DXY holding above 101 on the repriced Fed rate path. On the fiscal front, US federal interest costs hit a record $723 billion in the first eight months of FY2026, now the second-largest budget line after Social Security, with the CBO projecting net interest payments rising from approximately $1 trillion annually to $2.1 trillion by 2036. Germany’s June flash Composite PMI dropped to 48.0, missing the 49.7 forecast, with the services component collapsing to 46.8 — placing Germany in dual-sector contraction territory and compounding the ECB’s stagflationary dilemma. ECB President Lagarde acknowledged “some de-anchoring” in short-term inflation expectations while signaling no need for more forceful policy action, with markets pricing 33 basis points of additional ECB hikes by year-end.

The US Senate passed the bipartisan ROAD to Housing Act 85-5, barring institutional investors with more than 350 single-family homes from additional purchases — the first major federal structural intervention in single-family housing supply since the post-GFC era — with a four-year CBDC ban embedded in the legislation. Canada's May CPI printed at 3.2% year-over-year, above the 3.0% forecast, driven by a 33% gasoline spike. China sanctioned 10 US defense and rare earth firms and restricted 46 others from government procurement in direct retaliation for the Pentagon’s military blacklist, targeting MP Materials and USA Rare Earth in a signal of willingness to weaponize critical minerals dominance ahead of the September Xi-Trump summit. Goldman Sachs simultaneously cut US recession risk to 15% from 25% — citing easing geopolitical stress and lower energy prices — while raising H2 GDP growth to 2%, creating the widest major-bank policy split of the current cycle against BofA’s three-hike forecast. US-Iran technical talks in Switzerland continued with reported progress on frozen asset release procedures and a Strait of Hormuz communication line, though Iran temporarily closed the strait citing Israeli ceasefire violations before resuming, and Iranian officials disputed US claims that Tehran agreed to readmit IAEA nuclear inspectors. Former Federal Reserve Chairman Alan Greenspan died at age 100.

Thanks, Joao

The headline today is SpaceX dumped the Korean market. SPCX fell -16% from yesterday in a heavy sell and deleveraging event, dropping from the $176 area to the $150s. That directional pressure, in a large liquidation event, pushed the derivative to its lowest price since the perp was created on Hyperliquid. The SpaceX IPO is a major signal for how the stock market performs at the current stage we are in, and the first pump-to-dump below the IPO price could point to a renewed fear environment. That is not a positive sign for the next major IPOs coming to market, Anthropic and OpenAI in particular, and not a positive read for sentiment, at least in the short term, with SpaceX the worst individual performer on my watchlist here. It signals a rotation to fear: every Asian space company dumped following SPCX’s last three days, and not only space names, the KOSPI index is down almost 10% on the day.

SpaceX is dumping on technicals, not on fundamentals. They closed another $6.3b in compute capacity for Reflection AI from the Colossus 2 cluster, a $150m monthly deal starting in July 2026, and deal after deal keeps closing on compute. Before Reflection AI, SpaceX closed a compute deal with Anthropic worth over $45b, bringing $15b in annualized revenue, and a compute-leasing deal with Google of almost $30b, bringing $11b annualized. SpaceX also acquired Cursor for $60b (after a $10b deal), so that one is irrelevant here. We are counting almost $30b in annualized revenue from compute deals alone, and after the IPO numbers these points toward a potential of over $100b in revenue by year-end. At a $2T market cap that is a forward P/S of 20, well below the hundreds P/S SPCX carried on its IPO date. SPCX took pressure from deleveraging de facto, but also from the debt opened on that date, with projected cash burn of over $400b through 2031. A lot more revenue must be created to reach the point where they can fund an eventual $100b in annualized cash burn and build the ambitious products they are projecting. Here I have only counted the almost $30b from providing compute to partners, but there are more revenue streams: Starlink telecom products, plus rocket launch and space exploration, sovereign award deals and NASA partnerships, which I expect to accelerate from here, with the number of SpaceX rockets sent to explore particular areas in space, the Moon especially, rising rapidly from 2026 to 2027 at higher pace.

Technology reads

On one side we have SpaceX vaporizing over $600b in market value in a day, with SpaceX and the hyperscalers absorbing severe selling pressure, while memory and energy is performing. Micron closed an Anthropic deal: a multi-year HBM, DRAM and SSD supply pact, a joint chip co-design agreement, a Series H equity investment, and an internal Claude deployment, all rolled into one announcement. These moves are about grabbing as much memory as possible. Anthropic is reaching a level of partnership that lets it scale and operate in a supply-constrained market.

There is memory, and there is power: two important gaps that the consumer-facing AI platforms like Anthropic need to fill. Microsoft signed a 20-year, 2.67GW natural-gas power purchase agreement with Chevron for “Project Kilby” in West Texas.

There is a natural force in high equity markets for companies to issue debt against equity: when equity prices are high enough, their credit rates stay very safe. Nvidia is raising $25b in debt against $85b in demand (3.4x oversubscribed). SpaceX opened a $20b inaugural investment-grade bond sale (BBB-rated by S&P, Moody’s and Fitch), right before the -16% single-day stock decline. That bond disclosed cash burn projected through 2029 and $400b in projected net debt by 2031. This rush for debt is what can hurt capital markets and could pressure an equity rebalancing. That is the one concern I have about the bull run continuing in a straight line up: the rebalancing of debt. Debt is tied to the Fed rate level, so as hiking pressure rises it directly pressures every high-debt company and forces a debt rebalancing across many players. These companies become less attractive when interest costs rise and they lag as revenue producers.

There is another area drawing more eyes, as it reaches a level of maturity that could eventually create a positive impact on the markets: the first generation of quantum innovation driving a new computational revolution, led by security and infrastructure security. In a World War III scenario, this is probably about decrypting the encrypted messages of other nations, so the rush to the new “atomic bomb” is generationally important for the few players working on government-led projects, security projects, or financial and blockchain areas. Creating quantum-risk-free security is a new level for financial infrastructure. The Trump presidency knows this, and the people around him are capable enough to have the government sign two executive orders on quantum computing: a 2028 deadline for a research-relevant quantum computer, a 2030/31 federal post-quantum cryptography migration mandate, and $2b in funding for named quantum firms. Government pressure pushing federal agencies to migrate is an important move and will propagate into enterprise security spending cycles. In security, quantum-risk-free companies will provide a catalyst over the next 12 to 18 months: a revenue increase from signed enterprise deals, especially for financial institutions, where the real quantum threat sits.

Iran - Hormuz

A 60-day relief window, already fragile. Oil is whipsawing between the $70s and $80s as de-escalation and re-escalation trade blow for blow.

De-escalation. June 18 marked the official lifting of the naval blockade on Iranian ports. VP Vance reported 12.5 million barrels of oil transiting the Strait of Hormuz overnight without Iranian interference - the first unobstructed passage since the war began. With ships moving again, Iran invited the IAEA to inspect its nuclear facilities and identify the locations of enriched material, which led the Joint Maritime Information Center to downgrade the Hormuz threat level from “substantial” to “moderate.” On those headlines, oil converged from $95 to the low $70s.

Then it closed again. The Israel–Lebanon–Hezbollah axis forced the Strait shut. Israel keeps striking southern Lebanon; Saturday’s airstrikes - the trigger for the latest closure - killed 83 people, and the IDF’s seizure of an Iranian-built Hezbollah command complex at the Ali al-Taher ridge directly provoked Iran’s most aggressive post-MOU move. The IRGC formally announced the closure, citing US failure to restrain Israel as a violation of MOU Article 1: “immediate, permanent termination of hostilities on all fronts, including Lebanon.” The White House sides with Netanyahu, yet Israeli forces simultaneously declared no restrictions on IDF operations in the Lebanon security zone. Against that backdrop, Hezbollah launched Operation “Ashura,” citing ceasefire violations - a path that could mean further strikes and a re-activation of the war across the Middle East. Qatar is back in its familiar “secret” emergency mediation. Oil has reacted higher, back into the $80s. Markets could open under pressure Monday on these announcements - possibly red.

The MOU is a printing machine. Its 14-point structure grants Iran immediate oil-sanction waivers, a 60-day toll-free Hormuz passage commitment, phased access to $6 billion in frozen funds held in Qatar, and a $300 billion private reconstruction fund (over $150 billion already committed). In exchange, the US gets Iran’s reaffirmation that it won’t pursue a nuclear weapon, a commitment to down-blend the 60%-enriched stockpile under IAEA supervision, and an end to Hormuz interference. Read plainly, this is another $300 billion printed to rebuild the destruction Iran organized, financed in a way that devalues the dollar. A weaker denominator pushes asset prices up almost mechanically - inflated dollars make cash worth less, so owning cash is less interesting today than it was before the deal. The stock market goes up again on the printing press.

After 60 days is the real question. The relief in the Strait runs 60 days; what comes next is open. Iran’s Deputy FM Khatibzadeh said that after the window Iran will introduce “a new mechanism” to manage the strait, leaving the tolling question unresolved, and IRGC Navy statements that ships must carry Iranian-issued insurance and follow prescribed routes already foreshadow the post-60-day governance dispute. How international ship insurers respond is the key: if they lose coverage on the Hormuz route, oil never returns to pre-war prices, and inflationary pressure persists - now from several directions at once: printing, higher oil, higher Hormuz operating costs, and higher PPI. The Brent–WTI spread stays wide. Shipping gets more expensive, and so do fertilizer and food. Household purchasing power keeps degrading, especially in Europe, where rates are rising and policy is set against growth, tech, and innovation - which only puts Europe in a worse spot.

Structural fragility. The bigger question starts today: will the US fill the Lebanon gap and keep the nuclear track and the peace regime intact? The deal is structurally weak - Bloomberg Economics counts 10 to 14 points favoring Iran, and Netanyahu rejects any binding obligation. The 60-day negotiation window, not the ceasefire itself, is the critical variable.

Macro

The Fed is pivoting hawkish under Warsh while inflation accelerates. The market is now pricing hikes, not cuts - pressure on stocks, housing, and credit, and there’s reasons to stay long US, short EU. Even when both markets could go down.

Warsh’s first FOMC. Kevin Warsh’s inaugural meeting surprised markets - though it shouldn’t have. He is breaking the political pressure on the agenda: he cut the forward guidance and the boilerplate, returning to a pre-2009, factual format. There is no Warsh dot-plot, and 9 of 18 FOMC participants projected at least one rate hike before year-end, reversing the prior pressure to cut. Warsh is running the institution through task forces - communications, balance-sheet policy, inflation frameworks, data quality, and AI - and these will reshape how the Fed operates under his tenure.

The data is turning. Inflation and labor stress are building. May PPI printed +6.5% YoY, the fastest since 2022; core PCE for May is expected to accelerate further; and continuing jobless claims rose to a three-month high of 1.81 million - still resilient enough, by tightness, to give the Fed a window to address the inflation overshoot without immediately breaking employment.

Imported inflation, worsening credit. US inflation is accelerating on imported goods. The US produces what it consumes in oil, but it absorbs inflation from everywhere else - fertilizer prices are imported, as are other PPI drivers, and higher WTI hands oil producers fatter margins while the consumer pays up. With credit deteriorating, the US faces persistent inflationary pressure. If it sticks, the answer is hiking - which pressures the credit bubble and the cheap rates the big labs are leveraging on top. Consistent hiking into an inflationary backdrop would hit housing hard, along with the debt-heavy names like the hyperscalers, and stocks broadly.

Three drivers of the inflation. First, the massive print to fund the military attack on Iran. Second, the print needed to reconstruct it. Third, the Pentagon’s rebalance to rebuild crude inventories after drawing them down to support allies - reserves hit their lowest since 2014, around 20 million barrels, reaching operational tank-bottom; the SPR sits near 340 million barrels, its lowest since 1983 after 172 million barrels of releases. Easing the stress in the Strait to rebuild those reserves is crucial - not just for the US, but for its allies. The current supply–demand trend is unsustainable, and Hormuz is the fulcrum. The 60-day relief is an attempt to refill reserves and let oil drift lower again, relieving a major source of pressure on global macro policy.

Margin debt and the hike path. War is never good for the value of money. US margin debt surged $112 billion in May to a record $1.42 trillion, +54% YoY - that alone pressures the dollar against other assets, particularly inflation-driven ones. After the FOMC meeting and the run of inflation data, BofA is now pricing three rate hikes this year: the first possibly 25bps in September, followed by October and December in the same cadence. That pressures not only the stock market but the housing and credit bubbles.

US over EU trade. And the US is not the worst spot. The ECB has already hiked, and Europe stands to suffer far more from this inflation pressure than the US does. Long-short books that prefer US over EU remain the trade - and it keeps paying off as long as the Strait is neither clear nor clean.

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Thanks,

Joao

US-Iran peace framework reaches the scope, not only a diplomatic text, paper (digitally sign) but also physical reality of the improvements. Peace framework detailed 14-points co-sign with US and Iranians, and going to formally sign in 19 June – the important Geneva ceremony. The reality is three Iranian thanks pass the US naval blockade, information from Iranian authorities but also confirmed tracked by vessel-tracking technology. These tanks include the sanctioned VLCCs ‘Diona’ and ‘Hero 2’, carrying 3.8m barrels combined, and the third vessel carrying 1m barrels.

These three vessels crossed US blockade line from Chabahar and the Gulf of Oman with their AIS transponders active (great sign of transparency, the world is seeing). OIL market price reacted sharply, OIL prices down 16% in four sessions, now trading at $74 per Brent.

European countries, G7 nations collectively reaffirmed support for the US-Iran agreement, is it finally European countries and US align or just politics?

While Trump keeps mention “open by Friday” timeline, there is critical operational constraint: de-mining ships are slow, unarmed, and highly vulnerable. Europe is nations that clear benefit with the rapid opening of the strait - Germany provide support on this mission, France also support personnel and equipment on this mission. But this mission takes time, will not open the strait overnight, it former US Navy officer Ben Cipperley assessed that confidently clearing Iranian mines could require 30 days or more.

In between QatarEnergy separately confirmed the restore plans, able to restore 50% of Ras Laffan LNG output within one month and 80% with two months. But disclosed the rest have permanently changed by Iranian strikes – requiring 3-to-5 years to replace. This constraint will have clear effect on gas supply in Europe - as European nations are widely dependent in this region, this gas, and have unsustainable reserves to the next winter.

These affects European economic outputs, it’s already bad, and will have a continuously force to get worse, at least to the end of the year, until stagnate through the winter (in a bad spot), waiting to summer to reestablish again the balances. Gas and OIL will trend lower, but will take more time than what politicians are mentioning. Will not be an overnight price convergency to pre-war price equilibrium – and markets don’t agree with that either.

Lebanon is the clear risk, that could disconnect the durability of the deal sign on June 19^th. Labanon-Israel front remained in continuously active stress. Iranians warning reiterated, mentioned that Israel is in ceasefire invalidations, that if Israel don’t stop attack Southern Lebanon, Israel should expect a hard response from the Iranian Armed forces. Labanon is one of the four risks that can thread the de-escalation trajectory; the mine clearance timeline is the second; third being the discrepancy between US and Iranian interpretations of frozen asset provisions (it’s unsolved issue); And last but not least the nuclear verification gap – specially uranium sites at Fordow, Isfahan, Natanz, where potentially 441kg of highly enriched uranium and 8,600kg of lower enriched material are held.

Markets appreciate the relief in Iran-war, there’s direct correlation, as predictable, between the direct decline of OIL, to the jump of the stock market, and the alleviate pressure in the Treasury yields.

Not all sectors benefit equal with lower OIL prices, but technology and industrial sectors clearly benefit with lower prices. OIL. – BRENT or WTI – are directly correlated with their costs, from energy consumption or PPI. Notorious in last PPI reports, the rise of the PPI. By contrast, OIL prices are directly correlated with the revenue size of energy producers – so lower OIL prices affect their revenue, earnings by default, their valuation collapses under lower OIL prices.

Bitcoin add signal to markets, by agreeing with risk-asset relief, recovering to two-week high on the Iran-deal announcement. This alone means nothing, but it could highlight a move to risk-on, and removal geopolitical premium. Will this sustain overtime, or not, is what markets will determine.

This geopolitical de-escalation – which functioned as a global stagflation shock since late February – reduce the inflation expectations reducing the probability of a December 2026 Fed rate-hike from 80% pre-deal to approximately 65%. With automatic retreated of the two-year yields from 4.15% towards 4.02%-4.05%. Yet inflation data in hands prints May CPI at 4.2% YoY (higher, and well above the benchmark) and May PPI at 6.5% YoY;

May import prices at +6-7% YoY, and forecaster core PCE at approximately 0.35% MoM implying a 4.1% six-month annualized rate. These data doesn’t sound good for easing policies.

Today is highlighted by the first Kevin Warsh FOMC meeting happening, will be first signs of policy aggressivity, policy changed, calculations change or a nothing burger. Today we will have the first signs of how Warsh policies will be.

This meeting is highly anticipated as it marks a major regime shift in FED leadership and communication. Chairman Warsh has signaled plans to overhaul central bank communications, pulling back frequent public speaking and detailed forward guidance to preserve policy flexibility. Markets are expecting a held steady at 3.50%-3.75% but the focus will be on the removal of any remaining easing bias: While CPI and PPI is hot, demand is also hot. And supply side pressures memory cost to surge.

Thanks,

Joao

The Long-Term Thesis

I am not questioning the destination. In 20+ years, SPCX will be the first $100T company, which would officially make it another 10x from the IPO price.

How to Enter: Staged Allocation, Not a Single Ticket

But conviction is not a plan, so for an honest analysis, let me bring some data. It is unquestionable, beyond any doubt, that VC, insiders are selling at this IPO price. Not EXITING, just diluting a little, as a rational person would. The sophisticated investors also agree that, at this stage, buying everything in a single ticket on day one is not the right approach. Markets are expensive.

The plan should run on a 3-year time frame, allocating a portion each year. Maybe you buy 25% now, so you are not completely out of the market. But don’t put 100% of your cash into public tech stocks with the current markets.

Do Not Expect an Overnight Double

There are massive multiples in these specific, well-selected stocks.

But let us be clear: they will not double overnight. Those were different markets, and even then, nobody should buy an IPO expecting it to double in a month. Apple was the slowest of the six, taking more than two years to double (consider roughly 250 trading days per year).

Trading Below the IPO Price Is Normal

Do not get overexcited. Four of these six stocks traded at a discount to their IPO price at some point. So there is a high probability it will happen again, and it is fundamentally justifiable. Apple traded 50% below its IPO price. That said, do not expect deep discounts to the IPO price either.

Recovering back above the IPO price usually does not take that long, although it can stretch into the hundreds of trading days, as it did for Apple, or almost 100 trading days in the case of Nvidia.

On a positive note, markets are becoming more efficient. There are fewer mispriced opportunities, and retail investors are more active. Looking only at these six stocks, the number of days closed below the IPO price is lower today than it was in the past.

Drawdowns Are Part of the Ride

Over the years, these stocks traded at huge discounts many times. Be prepared to take -25% and -50% drawdowns. This is a roller coaster, not a straight-up money machine. Be prepared to accumulate at the bottoms and the discounts, not to sell into them. On average, each of these well-selected stocks traded 25% below its local high more than 10 times. For -50% drawdowns, the average is 4 episodes per stock, which is a huge number. Be prepared to accumulate at those bottoms. Think of them as Black Friday periods: they are not frequent, but they happen, and they happen multiple times.

Even deeper discounts are possible. Be prepared for massive falls. They have happened before. Not often, but over a 20-year holding period, the probability of facing a Black Friday event is enormous.

Be Contrarian When the World Sees the End

This is where professionalism and cold blood are defined: the ability to accumulate and buy these bottoms. In those periods, the media and the world usually feel that “the end” has arrived. Be contrarian on these massive swings, and prepare mentally for them in advance.

Recovery Takes Time, and Patience Pays

For good companies, the recovery happens. In the long term, the stock price always reacts to the fundamentals. But it will not be immediate, and this is where patience pays off. The average recovery from a bottom back to new highs is over 150 trading days, meaning more than six months to recover the entire pullback. These are not overnight gains. They are long-term oriented gains.

And as expected, the harder the episode and the worse the dump, the longer it takes to recover the full price. Aggressive V-shaped recoveries happen mostly after shallow drops of around 10%, not after collapses of 50% or more.

The Race to Double

The roller coaster is real. Do not assume a straight line up. Historically, there were multiple drawdown episodes on the way to doubling the stock price. Google is the outlier here.

Almost all of these stocks declined more than 25% before reaching 2x the IPO price.

That said, the race to double is highly dependent on the company itself, and it is not correlated with the IPO year. Older companies did not take more time to double than the most recent IPO stocks.

The multiples are different

The multiples are relevant, and SPCX is pricing higher, above all peers. Be aware of that.

Something fundamental shifted on TON in the last month, and most of the market is still pricing it as just another rally. It is not. In a four-week window, TON went from being a general-purpose, Telegram-adjacent L1 — a chain with a great narrative but always one step removed from execution — into something else entirely: a Telegram-controlled global payments rail with native AI agent infrastructure. That is a different asset.

There are three updates worth understanding, because they only make sense as a sequence:

Three catalysts in four weeks. The market is still digesting the third.

1. Sub-second finality (April 10)

TON activated the Catchain 2.0 consensus upgrade. Block times collapsed from roughly 2.5 seconds to 400 milliseconds, and final settlement now lands in about one second. That is the kind of latency where a payment on-chain feels like sending a message — and crucially, it is faster than a card-network authorization message, all delivered through cryptographic finality. TON is now in the same neighborhood as Solana on speed. The old narrative that TON had a finality flaw is done.

2. Fees cut 6x (April 24)

The next step came two weeks later. Transaction fees dropped roughly 6x, to around 0.00039 TON, or about $0.0005 per transaction. Two details matter more than the number itself: fees are now flat regardless of network load — no volatile gas auctions — and Durov has explicitly said most transactions will eventually move to a fully feeless model, subsidized at the protocol or Telegram-app layer for common payment flows.

Once you remove fee volatility, you remove the single biggest reason a consumer payment app cannot run on a public blockchain. That is the actual unlock here.

3. Telegram replaces the TON Foundation (May 5)

This is the one that changes the asset. Pavel Durov announced that Telegram itself will replace the TON Foundation as the driving force behind TON, and will become the chain’s largest validator. In his words, this is a “direct commitment to the chain’s security and direction.” TON is no longer a Telegram-adjacent project run by a community foundation; it is, effectively, Telegram’s chain.

In a feeless or near-feeless environment, validators normally take the loss on zero-fee transactions. Telegram becoming the largest validator is the answer to that — Telegram itself is willing to subsidize the cost of running a payments network for a billion people. That is the bet.

What TON actually is now

Stitching the three updates together, this is the description that fits:

TON is the settlement layer for Telegram’s billion-user app, with sub-second finality, near-zero fees, AI agent rails through Cocoon, and direct operational control by the company that distributes it.

Every piece of that sentence is now true at the same time, for the first time. Each piece individually has been promised before. The convergence is what is new.

The 1-billion-user distribution channel

The most underrated number in crypto right now is the one Telegram already has on the front of its app. Roughly one billion monthly active users. Profitable in 2024, with over $1 billion in annual revenue and meaningful cash on the balance sheet. No other blockchain has anything close to a built-in distribution channel of this scale.

The stated goal is to bring 1 billion users onchain. Telegram is the only platform on earth where that goal can be stated and not be a fantasy. Onboarding happens inside an app the user already trusts. Wallets are native. Mini apps run inside the chat. Payments live next to messages. The friction layer that has stopped consumer crypto for a decade simply does not exist here.

Cocoon — the AI agent layer

Cocoon — the Confidential Compute Open Network — is the part of this that does not get enough airtime yet. Built on TON, Cocoon is a decentralized GPU marketplace where anyone with a graphics card can earn TON by running AI inference inside trusted execution environments, and developers pay TON to access private, encrypted compute. Telegram is the first major customer and the primary demand engine.

Stack that on top of the rest. You now have a chain that is the payments rail, the social layer, and the compute layer for AI agents — all delivered through one app that people already open every day. Pavel’s vision, stated explicitly, is to make Telegram the place where humans and AI agents interact. The majority of people running personal agents already use Telegram chats as the rail. The pieces fit.

Why this time is different

A small piece of context that matters. Pavel and Nikolai Durov designed TON in 2018 as the Telegram Open Network, before SEC enforcement in 2020 forced Telegram to abandon it. The codebase was then picked up and continued by an open-source community organized as the TON Foundation.

That history is the reason you should take the May 5 announcement seriously. Pavel walked away from TON 1.0 specifically because of US regulatory exposure. He would not be walking back in now, publicly, with Telegram as the validator and the operational driver, unless he had thought carefully about the regulatory environment. The CLARITY Act in the US — still in process but on track — would mark TON as a digital commodity, which is the reading Pavel almost certainly has in mind. He is more aware of this risk than anyone, because it cost him the project once before. He is not making a 2x trade. He is making a multi-year commitment, and the TON blockchain is going to be folded into Telegram’s major goals.

The vision: Telegram as the human–agent layer

Nikola Plecas, head of Telegram payments, has stated the explicit plan: turn Telegram into a global crypto payment network with the TON wallet inside Telegram as the primary user interface. That is not aspirational language. The wallet ships inside the app. The infrastructure is now fast enough and cheap enough to actually carry that traffic.

The Telegram ecosystem already has the building blocks:

• Chats and groups — the best UX in messaging, with deep user trust

• Mini apps — full apps embedded inside Telegram

• Native games — already a meaningful traffic driver

• Wallet — TON-native, already shipped

And there are obvious upgrades still on the table. The first one that comes to mind is livestreaming. Imagine groups going live on Telegram, where you can directly purchase the item being sold or send NFT gifts that the creator can resell on a TON-native marketplace. That single feature replicates the largest revenue stream on TikTok, but settles every payment and every gift on TON. If they ship that, it is a serious change — A platform called Fragment, made over $400m in revenue in the last year, NFT marketplace telegram-native (by NFT it means gits, and emojis, not monkey jpegs).

The second is privacy on payments. Telegram is already the privacy chat platform. Adding privacy-preserving payment rails on TON is the natural extension, and it is something no major competitor can credibly offer.

The Telegram IPO optionality

Telegram had been planning an IPO for 2026, with reported valuation indications above $30 billion before the process was paused. Whenever it does come back online, the IPO is a real catalyst for TON, because it forces the market to price the value of the integrated ecosystem.

There is a structural question worth holding open: when Telegram lists, will TON-equivalent value end up in the equity, or will the market start treating TON as the listed proxy for Telegram’s blockchain layer? Either path has bullish implications for the token. The first re-prices Telegram with a crypto-native economy attached. The second turns TON into the public-market shorthand for Telegram’s chain.

The risks worth naming

Two real risks should be named clearly.

Centralization. Telegram becoming the largest validator and replacing the foundation is a governance centralization. That is the thing it is. Durov has framed it as Telegram acting as a counterbalance that lets other large validators join without breaking decentralization, and there is some logic to that — but a chain where one company is the dominant validator and the dominant front-end is, by any definition, not maximally decentralized. DeFi purists are right to call that out. The bull view is that for a payment network with a billion users, accepting that trade-off may simply be correct.

US regulatory exposure. This is the thing that killed TON 1.0. The CLARITY Act passing on a clean track would resolve this in TON’s favor. If it stalls, or if the SEC posture changes, this whole thesis carries headline risk. The bull’s response is the one we already touched on: Pavel knows this risk better than anyone, and he is betting on it being manageable.

Using TONX to express a leveraged long on TON

With the regime change above as the setup, the next question is the cleanest way to express it. The token itself is the obvious answer. But there is a second option that, on the current setup, looks more interesting: TONX — TON Strategy Company (Nasdaq: TONX), a publicly listed digital asset treasury company whose entire strategy is to accumulate TON and stake it.

The people running it

The power behind this DAT is Manuel “Manny” Stotz, the Executive Chairman. His track record is the kind that matters in this seat: Goldman Sachs, Blackstone, Fortress, Rothschild, THS Partners, founder of Kingsway Capital (managing over $1.5B), and President of the TON Foundation from January to August 2025 before moving directly into this DAT operation. The person who used to run the TON Foundation chose to run a TON treasury vehicle. That is signal.

On May 4 — the same day Telegram announced its takeover of TON — Kevin Wilson took over as CEO. Wilson is a senior fintech executive with over two decades in financial markets, institutional trading, and digital assets, with prior senior roles at Citi and most recently Managing Director at Integral Development Corp leading their crypto and blockchain initiatives. The timing is not a coincidence. The new CEO arriving in the same week as the largest catalyst in TON’s recent history reads as deliberate.

The structure: maximizing TON per share

TONX’s stated goal is to maximize TON held per share. It is a Strategy-style playbook applied to TON instead of Bitcoin, with one structural advantage Bitcoin treasury companies do not have: TON staking generates real on-chain yield. Telegram has cited staking returns near 20% APR, which means the treasury is actually compounding through the network’s own incentive layer rather than just sitting on the balance sheet.

Over 220 million TON are already staked through TONX, making the company a meaningful infrastructure participant in the network — not just a passive holder.

The setup: discount, holdings, and what they look like together

TONX market cap vs market value of TON holdings

Implied discount to TON-adjusted value per share

These two screens summarize the trade. TONX has a market cap around $180M against TON holdings worth roughly $545M — a discount on the order of 70% to crypto NAV. That is a price of roughly $0.30–$0.36 for every $1 of TON inside the company. There is no other vehicle in the listed crypto-treasury space that trades anywhere near this kind of discount.

Why the discount exists

To be honest, the discount is not just a market inefficiency. There are real reasons for it: the company is still working through legacy operating losses from its previous form (Verb Technology), there has been heavy dilution from the 2025 PIPE that funded the treasury, and the prior management team did not have a strong record on transparency around treasury management. Some of that discount is the market pricing those structural concerns — fairly.

But the equation has changed. Stotz is in the chairman seat. Wilson is now CEO. The TON network itself has just been transformed in a way that materially raises the value of every TON in the treasury. The same discount that may have been appropriate three months ago is much harder to justify against the current setup.

The May 12 catalyst

TONX reports Q1 2026 earnings on May 12 — next week. This is the first earnings call under the new CEO, and the first one after the entire TON regime shift. The Q1 numbers themselves will reflect a quarter that ended March 31, before any of the recent catalysts — but every single forward-looking statement on that call will sit under a completely different network than the one that existed at the end of Q1.

Two things are likely to be communicated:

• The discount itself, as the message to investors. They will market the gap between price and TON NAV.

• Capital allocation choices. Above NAV they can issue stock to buy more TON. Below NAV — where they sit today — the most accretive move is to use TON to buy back their own shares. Either path increases TON-per-share, which is the whole point of the vehicle.

On top of that, staking revenue is now a real recurring number on the income statement. At ~20% APR on a treasury this size, the run-rate yield is meaningful. The Q1 print will already show a cleaner staking-revenue line, but the bigger surprise is more likely to land in Q2, when the full effect of the network upgrade and Telegram’s takeover flows through.

The dislocation chart

TON spot vs TONX since May 4. TON +82%, TONX +44%. The beta has not arrived.

This is the picture that makes the trade. Since the May 4 announcement, TON spot has run roughly 82%. TONX has done about 44%. A leveraged-long vehicle on TON, holding $545M of the asset, has captured roughly half of the underlying move. That is the gap.

Two readings of that gap. Either the market is genuinely sleeping on TONX — and the May 12 earnings call is the wake-up event that closes the discount — or the discount is appropriately pricing structural problems that the new management team has not yet proven they can solve. The honest answer is probably some of both. But with the discount this wide, you are being paid a lot to find out which one wins.

The asymmetry

Pull all the threads together and the setup is hard to ignore. TON has structurally re-rated as an asset. Telegram is now the operator, the validator, and the distribution engine. Cocoon adds an AI compute leg. Fees are gone. Finality is a second. The CLARITY Act, if it lands, removes the last regulatory overhang. And the Telegram IPO sits as a separate, larger catalyst behind all of it.

On the expression side, TONX gives you the same exposure with leverage built into the discount: roughly $0.36 of price for $1 of TON, plus a ~20% staking yield on the underlying, plus a competent management team that has now arrived in the same week as the largest catalyst this network has ever had, plus an earnings call next Tuesday that almost forces management to address the discount directly.

If the bull case on TON is right, TONX should at minimum compress the gap to NAV. If TON itself continues to re-rate, TONX gets both moves — the underlying and the discount close — at the same time. That is the asymmetry.

This is research, not investment advice. Crypto-treasury vehicles carry meaningful structural risks — dilution, governance, regulatory, and the volatility of the underlying asset. Position size accordingly.

[Brief in audio format]

There is smoke in the atmosphere - a lot of smoke. It is the smoke of rockets reaching new lunar goals, Artemis II is now on orbit, and the smoke of missiles exploding critical bridges. The world is riskier than ever on earth; and if we cannot cooperate on Earth, it will be even harder to cooperate in space. Nuclear power remains the “bomb” until we have lasers from the moon, that vaporize everything on earth. On Earth, the dusty smell comes from ballistic missiles and a massive wave of internal unrest. Over 7 million people have manifested across 50 US states for “No Kings” Day, signaling the first sign of domestic conflict.

Building on this instability, we have one thing clear: Iran is a bucket of problems.

For the US, it is an internal conflict where the population and the President are misaligned. For Europe, it is a reminder of the disastrous energy policies of years past. In Asia, it is a matter of complete dependency on a volatile region. Within the Middle East itself, wealthy nations that have grown enormously are now surrounded by “crazy neighbors” who are blowing up facilities and headquarters. This violence is annihilating tourism and threatening to destroy years of economic progress. For these nations, it is a massive step back.

Because of this deterioration, there are few solutions left. The Iranian regime may eventually be stopped by force—thousands will die and the straits will be controlled, in good faith or bad. While Europeans try to onboard peace and stabilization, this only happened because they still remember WWI and WWII but also because they were threatened by Iranian long-range missiles that cover nearly every country except Portugal. China, Russia, and the rest of Asia will inevitably be involved. Russia, in particular, will escalate Ukraine tensions; they have the money, despite being hit hard by Ukrainian drone technology and direct attacks on their energy storage.

This escalation in the Iranian and Ukraine war means energy in Europe must be solved through massive investment in internal capabilities and war technology. Europe must increase defense spending and adopt “freedom energy” policies to build internally, otherwise, we are screwed by geopolitical shocks every four years. Simultaneously, US internal conflict is hitting a breaking point. The March 28 “No Kings” Day reached a historical number of protesters—over 7 million manifesting against Trump, the Iran war, and ICE. This aligns perfectly with Ray Dalio’s “Changing World Order” theory: in the late stage, discrepancies between the “haves” and “have-nots” grow, internal conflict spikes, and military spending rises to protect fading power. We are seeing all three.

The Houthis have now joined the Iranians, cooperating on missile launch programs. This is manageable until they act on the Bab-el-Mandeb strait. Eventually, they will force a choke point at this critical location, where Saudi Arabia’s Yanbu export hub recently reached a 7mmb/d capacity. This is a direct threat to the Saudis, who moved operations toward Yanbu to avoid the Strait of Hormuz. If the Bab-el-Mandeb is closed, Saudi Arabia—and potentially the UAE—will be forced to join the war.

We are in a state of political disconnect that has pissed off the world. The Iranians are not “winning,” as they are losing infrastructure and oil facilities, but America is not winning either. The winners are China, Russia, and North Korea. The clear losers are Iran and Trump. No one is supporting Trump’s policies or the arrogant, direct way he navigates these shocks with clear lies. It is Nixon’s story all over again—1969, the Vietnam War, and a president losing his grip. While Trump family stays rich, the American nation stands to lose power depending on the next president. Markets no longer believe Trump; even the US intelligence community is out of alignment with his discourse. Instead, markets are watching Iranian, European, and Chinese media to understand the war’s true stage. Trump claims a deal is close; the Iranians deny it and intensify their missile strikes. The markets believe what they see, not what they hear.

This leads to a critical point: the US will not agree to the Strait being closed to them or Israel. While the US claims their goal was merely to obliterate nuclear capabilities and military power, they continue to bomb critical bridges inside Iran. The only way out is escalation until troops are on the ground at Kharg Island and the Strait. I assume a significant probability of a long war—longer than anyone expects. NATO involve, eventually. Trump doesn’t just want a “clean” Strait; he wants clean Iranian oil and eyes on what China is consuming. They want to bring onboard China, forcing them to buy at prices that the rest of the world is buying, a fair competition for growth.

As the US escalates and Russia acts as a middleman (while supporting Iran), the conflict becomes a mess of frontiers. We will see thousands of soldiers die in a war that will not end in two weeks. This drives a massive spike in oil prices—consistently above $100 and eventually $150. Consider the consequences for CPI and monetary policy. At $150 a barrel, CPI will react aggressively, likely staying above 4%. A recession and a deterioration of the labor market are predictable.

The main question is how to position for this stagflation. In a high-inflation scenario where AI is disrupting jobs, you do not buy long-term US or European bonds. You park capital in physical metals—gold, silver, or uranium. You hold “boring” companies: energy, consumer goods, or you hold “elite tech” like Google and Apple by shorting a basket of other non-elite tech stocks (I guess). Meanwhile, SpaceX is coming live soon and will suck huge liquidity from the markets.

Despite the chaos, I believe Bitcoin has a lower downside than upside here. Buying below $70k is a blessing. In a war scenario, governments must print massive stimulus to support the military and consumers while hiking rates to fight the inflation they are creating. It is a recipe for disaster. With debt at extreme levels and the USD declining to maintain industrial competitiveness, Bitcoin becomes the primary hedge.

My thesis is clear: a short-term bullish move for Bitcoin driven by conflict, reaching $150k in 12 to 18 months. However, I am bearish mid-term (18 to 30 months) due to the “quantum risk.” Until we are sure how to upgrade to quantum-free tokens, big institutional capital and pension funds will hesitate to hold for ten years. Once a solution is developed and the “quantum relief” begins, we will see the final rotation from gold to Bitcoin as the world’s reserve asset.

Ultimately, Bitcoin is trading at the same price it was 1,816 days ago. Think of how much technology and industry have improved since then. Your tokens are safe; it is only the price that is currently insecure.

This is intended to be a thought exercise, and not financial advice. Reach out in open conversations, DM me or comment anytime.

I’m aiming to provide clarity about the world day-by-day, and I hope you get smarter and more financial intelligent every day. Each day we increase our chances of winning.

Thanks, Joao

[Brief in audio format]

Trump loves to brag, but it’s working against the US this time. Operating with a massive ego, he enforced the power of the US by starting a tariff war. Other countries didn’t appreciate it, but they were forced to comply and embrace Trump’s power, fearing what could happen to them if they ended up on the wrong side of the US. Trump have consistent claimes that the world is taking advantage of US, the mother nations, fueled by China growth threats, creating friction to maintain and grow the US dynasty and attempt to revert the follow world order so they could remain in power. Claiming victory and bragging about “Great America”—Europe, Latin America, and Asia all kissed Trump’s feet and let him win.

But Iran is different. Iran has hated America since 1953, when the UK and America worked together to reinstall Iran’s monarch. That event cemented the US in Iranian eyes as an imperialist power willing to crush their democracy for economic and geopolitical interests, specifically with Iran’s oil industry being controlled by the British. This animosity deteriorated further during the Iran-Iraq war in the 80s. This long-held hatred wasn’t just a radical phase; it stemmed from feeling suppressed and being forced into regime change simply to favor US interests. Now, they hate Trump even more. They will do everything to damage his governance and ruin the world’s positive perception of his mandate.

And Iran is no longer what it used to be. They have a huge arsenal of missiles, bombs, and drones. They have—or had—potential nuclear weapons, they have oil, and they control the Strait of Hormuz. Furthermore, they possess a radicalism and a religious mission completely contrary to the rest of the Western world.

I believe the war wouldn’t have reached this stage if Trump hadn’t publicly bragged. He bragged so much that it pissed off the Iranians and the rest of the world right when everyone was already suffering. Capital markets are suffering; European and Asian consumers are suffering. This is killing America, rapidly scaling global disillusionment and ruining the good perception of the US. This happened even when the US ultimately had no other option than to attack Iran. The bragging was unnecessary, and now his ego is on the line. I remember, even before the war started, Iranians mentioned they would teach Trump a lesson, and I believe he is learning a massive one. Now, to stop the war, he has to lower his ego and invert everything he wrote in The Art of the Deal.

We are at the extreme end of the pendulum in a global war, and he has to pivot toward areas where a positive reaction is expected. The biggest problem for the US isn’t just the start of the Iran war; it’s that the world blames the US for starting it. Gulf nations, all of Asia, and Europe blame the US. While the whole world is suffering, Trump insists on bragging, and that has alienated everyone.

Consequently, we are seeing a massive shift. India, which bought oil from Iran, is now buying from Russia instead. China is buying from Russia; new straits, channels, and routes are being utilized. New currencies for commercial trade are taking over. People and nations are diversifying away from the US—from the currency of trade to the reserve assets on their balance sheets. After Trump’s first three months, the world is moving increasingly toward diversification, losing trust in US leadership.

This naturally pushes the world closer to China. European cars are basically just Chinese EVs now; open-source LLMs are dominated by Chinese models. Rare earths and minerals are controlled by the Chinese. Europe, doomed since WWII, is especially failing to wake up to the problem at hand. We are seeing European segregation across different countries, where some defend the US and others oppose it, which was massively transparent when it came to allowing the US to use military bases for Iran operations. Portugal did, while Spain was against it. These are two close countries with very different leadership. This escalation could lead to segregation by principle.

The world is starving for a transparent, simple, and more globally aligned America. Capital markets are always the proof of this: when America published a peace deal, the oil market reaction was extremely positive. The entire market react in a relief.

The State of the war

Yet, the actual state of the war tells a different story. On one side, you have diplomatic signals, with the US administration publishing a peace deal framework through Pakistan. On the other side, bombs are falling. Israel has dropped more than 15,000 bombs on Iran—four times the volume of the prior 12-day conflict. The IRGC has launched a new wave of attacks on Israel and US bases; Saudi Arabia intercepted a ballistic missile and at least five drones; and even Kuwait International Airport was struck in a fuel tank by a drone. While apparent peace deals are being arranged, Trump is simultaneously sending more troops to the Middle East, and Israeli forces are advancing another 8 km into Lebanese territory.

The 15-point peace deal was automatically rejected by Iranians, who countered with a 5-point ceasefire deal. One of their absolute conditions: international recognition of Iranian sovereign authority over the Strait of Hormuz. They explicitly stated they wouldn’t allow Trump to dictate the war’s timeline.

It’s clear where this war is heading. In my opinion, the Trump administration is just trying to buy time, knowing full well that Iranians won’t agree to the published deal. They want to show the world that they are trying to negotiate a ceasefire and play the peacemakers. Trump propaganda to be the peace president, but peace only in titles. Trump called “peace deal” when it was obvious Iran would reject most of the points, it’s just a facade. They know they are sending troops and bombing while pretending to seek a resolution.

However, this peace deal attempt was useful in one regard: it made the world and the US understand Iran’s primary objective. It’s not about access to the global oil system, or being an unsanctioned nation; it’s about dictatorship and sovereignty over the Strait. The Strait is their crown jewel, and with it—alongside the support of Yemen—they control all the Gulf nations. Trump and US allies will never accept that, which makes it highly probable that the war will escalate further and last much longer than expected. Almost 30 days in, we are looking at scenarios of escalation, not de-escalation.

There is a high probability of Gulf nations soon to join the US; Israeli troops are already on the ground, and the US keeps sending more forces to the region. Iran is warning that as soon as these troops are within range of their missile arsenal, they will fire. If that happens, they will undoubtedly kill or threaten to kill thousands of US soldiers in a flash. This would force the US to act Aggressively. We are in critical times, and the risks of this war are incredibly high.

This conflict doesn’t just impact oil; it drastically affects gas and fertilizers, with 30% of the world’s total fertilizers passing through that specific Strait. Without those supplies, there is an increase in fertilizer costs, particularly nitrogen. Without nitrogen, crop yields will inevitably drop, affecting consumer prices and leading to higher food costs. Rising oil prices, rising gas prices, and rising food prices, combined with stagnant economic growth, create the worst possible macroeconomic quadrant. High inflation lagging economic growth is the most challenging environment for policymakers.

In the current situation, sustaining the war will eventually require the extreme printing machine to be turned on. However, with the labor market stable and inflation rising, central banks will likely keep rates stable for now. But in a scenario of extreme war escalation—where US troops hit the field and Gulf nations join the fight against Iran—I believe the ECB and FED will have no other option but to hike rates.

This macro backdrop is the biggest reason why Gold has likely bottomed. In a world characterized by a bifurcation from the US, currency instability, geopolitical chaos, rising inflation, and lagging growth, Gold is historically the only asset that offers true protection. Even if economic growth ends up exceeding expectations thanks to AI, commodities will continue to be a very solid instrument to hold. Bitcoin is also perfectly positioned here, particularly if the money printing machine gets turned back on.

But enough of war. Technology keeps bubbling

But moving away from the war, there are major shifts happening in the crypto space. We are seeing signs of a probable Clarity Act approval, and the initial reactions have driven CRCL and COIN down by 20% to 10%. The likely approval of this act will dismantle the reward system that previously allowed Coinbase and other exchanges to offer yield on their stablecoin holdings in the form of rewards. As soon as this bill passes, those incentive programs will end. This will reduce the incentives an exchange can provide to stablecoin holders, and the apparent banking win on this topic is what dumped CRCL and COIN.

At the same time, Tether is finalizing a massive US audit to compete directly within US jurisdiction. This increased competitive pressure pushed Circle down even further than Coinbase. However, while Coinbase is the real loser of this act, they still have customers who are there for the rewards and will eventually end up doing other stuff on the platform. They will simply lose their power to use reward incentives to attract new customers. Circle, on the other hand, will actually win by absorbing more revenue from interest rates. The ongoing war is indirectly helping them by keeping those rates high. The fundamentals for Circle haven’t deteriorated compared to three days ago; if you were a buyer of CRCL three days ago, at 25% discount you are a euphoric buyer now.

Beyond stablecoins, privacy remains the primary feature demanded by institutions, as transparent blockchains hurt their need for confidential work. The Solana Foundation is attacking this by presenting enterprise privacy features—allowing encrypted balances, zero-knowledge anonymity, and multiparty confidential computing. All of this is being done on layer-1 with built-in compliance at every level. This directly attacks the only edge that Canton had over Solana. With Solana taking the lead, I expect Ethereum and hyperliquid to follow suit. These public blockchains will soon commoditize any privacy features that private layer one options offer, lowering their competitors’ selling points.

Through all this volatility, the smart money is moving. Strategy keeps buying, Bitmine is also buying, and new funds have raised a lot of capital, liquidity is there ready to “eventually” be deploy. We are entering a convergent world of AI and Crypto. AI privacy is being unleashed through crypto projects like Venice, and agentic micro-payments are becoming possible with systems built on crypto rails like x402. We are also seeing new decentralized computing systems running AI, such as TAO.

While the token markets might be in a clear bear phase in terms of price performance and volume, the underlying business economics in crypto remain steady. For many great crypto businesses, uncorrelated with altcoin trading, the economics are actually very strong. Building on this momentum, I will soon write my thesis on a new project where we’ve just finalized an investment and keep piling in—one where I believe the fundamentals justify every single penny.

This is intended to be a thought exercise, and not financial advice. Reach out for open discussions

Thanks, Joao

It stems from uncertainty about the current state of the Iran war. Recently, Trump announced a probable “de-escalation” after all US objectives were achieved, noting that defending the Strait of Hormuz is not America’s purpose or mandate—other nations must protect it. However, Treasury Secretary Bessent mentioned that, among other things, the administration will keep oil prices down as they continue Operation Epic Fury.

Analyzing these two types of communication, one gets the sense that the US isn’t getting the help it wants in the Strait, so they are strategically “removing” their protection to force others to ask for it. This essentially corners other nations, particularly Gulf nations and NATO, into getting involved. Gulf nations and Europe are desperate to open the Strait—it is a true emergency—but protecting it means military involvement, and involvement means escalation.

Because of this, the next moves by these nations are highly uncertain. If the US pulls out, will Iran open the Strait and allow vessels to continue floating? Will the US even allow that? Gulf nations didn’t want this war—Israel wanted it, and they got it. Now, Gulf nations are being struck and finding their own economies harmed with no direct cause.

Unsurprisingly, the bond market is reflecting this chaos; the MOVE index is agreeing. Seeing this correlation after the recent Fed meeting, we have to discount some potential background noise. But the trend of rising volatility has not only been clear on the MOVE index since the war started, but it is also being mirrored in the VIX.

Despite this rising volatility, the anticipated move to risk-off assets hasn’t fully materialized; a rotation to hedge assets, particularly gold, hasn’t started. It remains unclear if this is a localized geopolitical crisis or if it represents a widespread contagion that will lead investors to dump risk-on assets. So far, strangely, gold has been down just like any other risk-on asset.

The real driver behind these market anomalies is China. In a world where the Asia-Pacific region is buying discounted, high-quality Iranian oil at a key inflection point of the changing world order, I don’t believe the US will back off. The US won’t allow Iranian deals to be done outside their system, nor will they allow all that oil supply to be absorbed by the same competitor nations. The US needs a strong Europe—Europe is not a threat. China is. This is especially true when oil is being sold at huge discounts to America’s direct competitor.

Building on this dynamic, there are two major caveats to consider regarding US strategy. First, Bessent recently mentioned in a tweet that the US aims to “bring around 440m additional barrels of oil to the global markets, undercutting Iran’s ability to leverage its disruptions in the Strait of Hormuz.” He specifically highlighted a short-term goal to bring 140m barrels of Iranian oil, currently stranded at sea, onto the open financial system. This clearly shows the strategic direction of their oil goals.

Conventional wisdom suggests that expensive oil is good for America, given they are a net exporter. However, there are three reasons why this is currently false: 1. The US aims to aggressively expand AI development, bring massive manufacturing onshore, and create a new tech boom. That requires a massive supply of cheap energy, which may not be supported by their own supply alone. 2. China—their major competitor—is buying oil at unfair, discounted prices and growing like crazy. 3. Russia is a massive net-exporter of oil, and higher prices mean higher revenue for them.

Consequently, the US is ready to take a hit on its own oil revenue if it means vampirizing the revenue of its adversaries. At this stage, controlling the growth of competitors is much more important for the US empire than growing its own direct profits. By bringing stranded Iranian oil supply onto the open market, they can directly dump the price of oil substantially and track China’s growth based on their consumption.

The second caveat is that the Iran war isn’t over, and Trump is already raising alarms about a probable “friendly takeover” of Cuba.

The geopolitical world is starving for information, making tracking the MOVE index vital to understanding shifting risk. However, it is not entirely clear how directly correlated the price of Bitcoin (BTC) is to the MOVE index right now. What we can note is that drastic spikes in the MOVE—specifically those sending it above 120 and toward 150—create high pressure on risk-on assets and tend to dump BTC. Usually, a V-shape recovery happens as soon as BTC transitions from trading as a risk-on asset to a risk-off hedge.

Historically, MOVE has traded in an 80–150 range for long periods. During these times, BTC has moved both directionally down and up, meaning you can’t simply draw a straight line saying ‘MOVE up equals BTC down.’ But we can confidently say that a rapid spike to 150 could create a short-term, aggressive downward move for BTC that recovers rapidly. Positioning ourselves for this potential ‘black swan’ dip is key to unlocking massive opportunities.

Interestingly, despite these potential short-term drops, BTC has been trading incredibly well during wartime. In scenarios where gold and equities are down, Bitcoin is up. In a world where conflicts with China signal a changing global order—and a changing asset order—Bitcoin is proving to be a genuinely effective hedge.

Bitcoin isn’t the only crypto asset proving its fundamental value right now; Hyperliquid (HYPE) is doing the same. Hyperliquid has arguably become the most promising project in the space. To borrow from Philip A. Fisher’s stock categorization, there are companies that are ‘fortunate and able’ and those that are ‘fortunate because they are able.’ The Hyperliquid team has proven they fall into the latter category. They consistently demonstrate the ability to ship new products, hire sophisticated talent, and onboard the high-quality users required for any product they launch. Their earnings directly reflect this. Starting as a crypto-only perp trading machine, they are expanding into all sorts of asset classes, slowly but surely eating into the market share of both centralized crypto competitors and traditional exchanges.

A prime example of this growth is their HIP-3 markets, which currently present one of the most bullish charts ever invented. I remember analyzing how HIP-3 was created back on October 13th, wondering how it could successfully move tokenized versions of traditional assets on-chain, and asking: who would use this venue over others? On that day, hype on the news pushed the token from $38 to $42, before quickly dumping to almost $20.

Fast forward to today, and HYPE is trading around that same October 13th price level. However, the fundamentals have exploded: just on the HIP-3 markets alone, it now boasts $1.6B in total open interest and $1.5B to $4B in daily weekday volume, all achieved in roughly five months.

These HIP-3 markets are rapidly capturing crypto market share, now representing roughly 35% of the total and growing consistently.

Financially, the protocol is generating between $1.5M and $2M a day in revenue, using the majority of that to buy back the token. This equates to $500M to $750M in annual buybacks. For a project with a $9B market cap, it’s trading at a highly attractive 12 to 16 times sales with a buyback yield of 5% to 8%.

Ultimately, HYPE is not just a value accrual mechanism for the exchange; it is functionally designed to provision new markets for the protocol. Using HYPE as a utility token allows participants to create, vote on, and participate in new products within the ecosystem. This unique approach substantially increases the incentive for institutions using the venue to hold the token to enforce their wants and needs. Validating this institutional interest, S&P Dow Jones, in partnership with TradeXYZ, recently launched their first S&P 500 perpetual contract exclusively on Hyperliquid. This cements the real-world use case for the platform and highlights exactly where the smart money is heading in this shifting macroeconomic landscape.

This is intended to be a thought exercise, and not financial advice. Reach out in open conversations, DM me or comment anytime.

I’m aiming to provide clarity about the world day-by-day, and I hope you get smarter and more financial intelligent every day. Each day we increase our chances of winning.

Thanks, Joao

We have all heard Trump and his administration announce that the war is almost done. Yet, we see massive swings in OIL prices, dominated by further headlines and strike threats from both sides.

Trump threatened to strike oil infrastructure on Kharg Island—after already striking Iranian military assets there—as a warning signal that if Iran doesn’t open the Strait, the US will strike critical oil. Any destruction of this infrastructure would take years to rebuild, leaving the country deprived of its most critical source of revenue. Kharg Island produces 90% of total Iranian oil, meaning any destruction here will have massive consequences.

Iran, on the other hand, threatens to escalate by attacking Qatar, Saudi Arabia, and UAE energy infrastructure, having already struck the UAE port of Fujairah on Monday. Their justification is always that “US military forces are present and hiding among civilian facilities.” Iran consistently highlights that they aim to attack the US, not their Middle Eastern neighbors. In practice, however, these neighboring nations are the ones under attack. Today, Iran threatened to strike energy assets in Qatar, Saudi Arabia, and the UAE, emphasizing that these are “legitimate targets” following the Israeli strike on the massive South Pars gas field and the assassination of Iranian security chief Ali Larijani.

These instabilities pressure oil prices to fluctuate aggressively. Even knowing that the long-term directional trend for OIL price is down, the short-term and near-term direction remains highly uncertain.

We are already seeing the macroeconomic effects of this uncertainty. Today, PPI MoM came in above expectations. While the forecast expected a value below the previous number, it came in well above the prior reading: 0.7% compared to the 0.3% forecast and 0.5% prior. These are the first tangible signs of the impact of rising oil prices.

This aggressive deviation dumped today’s market on the open. The market is in fear, but it is within these pendulum swings that we find the best bargains.

This remains true even when long-term investors are ignoring this war, and despite oil shocks impacting long-term inflation while TIPS premiums sit at historical lows.

It was exactly on this playbook that we traded KOSPI. In previous letters, we correctly picked the bottom on KOSPI; as the war fades over time, KOSPI will aggressively V-shape recover. I still agree with this trade. Even though I am aware tomorrow’s reaction could be volatile (down), any swing will flush out a bunch of leveraged exposure and create aggressive dips—beautiful dips to buy. KOSPI is up +17% from the bottom and only down -6.6% from the highs. It is certainly a great market to watch.

Paired with this market, we have the UAE, which is being penalized by this conflict. In particular, real estate assets are taking a hit. Take EMAAR, the biggest tradable stock that captures the majority of Dubai’s real estate performance. It is down aggressively, even though we all know Dubai has been the most euphoric real estate market of the past five years, with impressive momentum attracting an influx of buyers. EMAAR is currently down -38% from the highs, experiencing its highest drawdown since the COVID shock in 2020.

Despite this drawdown, the sentiment on the ground remains very optimistic. People believe the government is able to protect them. However, those who have a second home are now leaving; flights to or through Dubai are being canceled, and the population has reduced significantly.

For Dubai to actually lose its moat, I believe something much bigger has to happen. People continue blaming the US and Trump for this Iranian escalation, and with the UAE staying out of the war, the sense of protection remains intact. In fact, post-war, with a more stable Middle East and a stable Iran offering better protection, there is a scenario where the region ends up stronger than it was pre-war. This could leave Dubai growing faster and more resilient than ever before. Their land is not being aggressively threatened, and as long as it stays this way, I don’t see a long-term problem. Markets are reacting like a pendulum, and this dip is a massive bargain.

The War Framework

However, my goal in this letter is not simply to talk about previous trades or untrades. It is to provide a clear framework—one that I will later detail in a standalone post—on how to navigate the war. This framework gives us clarity when we receive alerts about Iran headlines, showing us how to manage exposure to predictable black swans and how to read the news efficiently.

Here is the framework I believe in and have been using to judge headlines and their impact on open markets.

There are three major conflict drivers that sustain this war at the top level. These are the underlying principles for every military action in this conflict: Oil/Energy facilities, the Strait of Hormuz chokepoint, and US defense alliances. Based on these three drivers, each nation acts to escalate or de-escalate the war. Every action eventually ties back to one of these three critical pillars, and each headline is directly related to them as well.

These three major drivers do not carry the same global weight. Some create localized problems where further decisions are required to escalate things, while others have direct, aggressive, and highly robust consequences. The most critical and sensitive areas are related to oil facilities—where any destruction could lead to a long-term supply constraint requiring years to rebuild—and the Strait of Hormuz. The Strait sustains all of the Asia Pacific; without it functioning, all Asian and Gulf nations are smoked and will be forced to get involved, drastically escalating the war.

The less globally destructive, but highly decision-driven escalation path involves US defense alliances. These pacts force the US to defend Gulf nations, Israel, and other allies, dragging them into the conflict even if they don’t want to be. If Iran strikes US allies, the US will show its power by protecting them and fighting back. We live in a US-Empire world, and they have to protect that empire by defending their alliances and projecting strength. However, as Ray Dalio highlights, this is also the fastest way for nations to “go broke.” An increase in military and defense budgets leads to an increase in debt, making nations less financially sustainable and riskier in the credit cycle (this is the core thesis on why BTC and GOLD are strong long-term assets to hold).

By taking a deep look at this framework and applying the latest headlines to it, we can predict further black swans if the escalation continues. Are we walking a tightrope.

Current headlines are impacting critical areas that could, with significant probability, end up damaging oil market dynamics. These threats will consequently add a risk premium to every barrel that has to cross the Strait in the future (HSBC analyst warned), making oil more expensive due to post-war insurance premiums on carriers. The US can actually be a beneficiary here. Their Texas oil (WTI) doesn’t cross the Strait, meaning it will carry a lower risk premium and become even cheaper than BRENT post-war. WTI could trade at a higher discount compared to pre-war levels, and we are already seeing signs of this.

Ultimately, each decision to escalate or de-escalate the war has direct consequences on the supply and demand of OIL. This is the main reason why oil is fluctuating so much, driven by algorithms pricing in these micro-market dynamics.

The latest shocks are fundamentally about the quantity of oil available to be bought. When we talk about sanctioned oil, still affecting global oil price. Europe and North America weren’t buying oil from Iran, but Asia was. If Asian nations are no longer able to buy from Iran, that demand has to go somewhere else. They will pressure the market and compete to buy at higher prices from other providers.

Russia is a clear winner here, Russia wants the war to keep going, that’s why they are helping Iran. Because they have a lot of oil to extract and sell, the world will be forced to buy from them, even though they are a sanctioned nation. We have already the first signs of this possibility, G7 start buying oil that was already on the water, but soon we will be buying oil directly from Russian soil. If we don’t, we will simply push oil prices higher for all, and/or China and other Asian nations will buy it instead.

Two key highlights emerge from this dynamic: the supply and demand for oil are relatively inelastic. You can’t change the amount of oil on the market overnight, even if higher prices create strong incentives to refine and open new markets. Similarly, demand won’t drop overnight, as households, transportation, and industries must continue operating daily. We have to view these events through the lens of world supply and demand, where the majority of ships are currently on the water, trading and changing directions frequently.

In a world where Asian consumption was being absorbed by Iranian oil, the loss of the Strait or the Iranian market represents a massive shock. This consumption is no longer being absorbed, shocking global markets by forcing a massive buyer to aggressively compete for available oil.

Without Iran, oil prices will increase for a long period until the rest of the world can bring new refineries online. Any strike from US to Iran oil infrastructure will have this massive impact.

The exact slope of the curves here is irrelevant; as long as the marginal consumption from Asia is higher than the marginal supply from Iran, we are directionally right. This being said, in a post-war scenario with clean, unsanctioned Iranian oil, we will probably end up with a higher equilibrium oil price. This dynamic is enforced by pushing Iranian oil supply into the open market, and adding a massive buyer (Asia) that shows its purchasing power. This pushes the price higher for the rest of the world, but especially for Asia, which previously bought sanctioned Iranian oil at huge discounts.

Following this logic, it is predictable that oil prices will spike as we eliminate Iranian supply. But as soon as the situation is resolved and Iranian oil is ‘clean,’ prices will drop from their shock peaks—though they will remain higher than previous baseline levels. As a result, miners in the US, Europe, and Africa will generate more revenue than in pre-war scenarios, based on these elevated prices.

If Iranian oil remains sanctioned post-war, we will likely see marginal upward pressure on prices from Asia as they are forced into buyer diversification. But still settle lower compared to if the entire market opens up and trades freely. For now, Asia will likely keep benefiting from discounted Iranian oil, choosing to deal with any geopolitical blowback later on.

Building on this recent volatility, there will be intense pressure to increase global strategic stockpiling. Nations will be forced to hold greater quantities of OIL to buffer against any future supply shocks. Consequently, this preemptive hoarding will likely increase baseline demand for OIL, driving the natural equilibrium price higher.

This creates a very compelling thesis to watch oil miners carefully. As soon as the market starts pricing them down when oil prices begin to collapse, opportunities will arise. I expect that when oil prices start coming down, traders will short or sell their holdings in miners. However, higher demand for oil, and higher long-term oil price, and subsequent above expectation earnings results will create positive shocks and unlock the real value of holding these stocks. So far, they have performed quite well under these Iran-war scenarios.

This is intended to be a thought exercise, and not financial advice. Reach out in open conversations, DM me or comment anytime.

I’m aiming to provide clarity about the world day-by-day, and I hope you get smarter and more financial intelligent every day. Each day we increase our chances of winning.

Thanks, Joao

“Be fearful when others are greedy; be greedy when others are fearful.” This iconic phrase by Warren Buffett is the defining principle of our current moment.

[Brief in podcast format]

We are in a state of peak fear: fear of AI labor disruption, fear of white-collar displacement, and fear of a 2008-style insolvency crisis driven by banking loan defaults and mounting bad debt. As low-risk white-collar debt transforms into max-risk liabilities, credit lines are tightening under extreme conditions. Between overvalued equities, massive government debt, and a looming “fiat holocaust,” the market is bracing for impact. Geopolitics only adds fuel to the fire; the conflict with Iran and its direct effect on oil prices correlates with global instability and rising inflation. This combination has decimated the stock market—first through the IGV, the ‘Saaspocalypse,’ and second through the surge of oil toward $120, pushing gasoline costs and CPI expectations higher.

But it is precisely because we are at peak fear that we should be buying.

While the attempt to be a perpetual contrarian is often a fallacy—since momentum is usually where the easy money is made—the rules change at the edges of the pendulum. The best companies in a sector usually drive performance, and trying to catch a “convergence trade” with second-tier players is harder. However, when we hit the extremities of max fear or max euphoria, an inflection point becomes highly probable. In these moments, betting on mean reversion rather than momentum offers better odds of success and significantly lower risk.

This is why I must invoke Charlie Munger: “Invert, always invert.” When the world is clearly fearful, I am inclined toward euphoria—to buy with both hands rather than neglect the possibility of a relief rally.

Consider the first-order derivative of the current situation. The market has aggressively discounted the ‘Saaspocalypse,’ yet a clear distinction is emerging between three types of SaaS companies: those that price by seat, those that price by input, and those that price by output. This differentiation divides the sector into buckets predetermined by pricing models and user control. It is now evident that with the advent of AI, companies pricing by seat have lost their moats; a new front-end login does not create an incremental backend cost for the provider, rendering the “per seat” charge obsolete. Conversely, companies pricing by output will charge based on the actual impact delivered to the client. These companies will maintain higher moats, especially when integrated with input systems where they control the data. By combining deterministic/proprietary data with the ability to price the interconnection between client requests and aggregated data, these companies become far more efficient with AI. For this specific SaaS bucket, the new wave unlocks extreme value and superior economic incentives.

There is relief not only in the SaaS sector but also in the perceived AI impact on white-collar labor. After initial testing, developers and managers are feeling the incremental costs of AI implementation; a dev or manager with AI is often a higher-cost employee than one without it. Because limitations are required to prevent companies from burning through capital, I expect these incremental costs to hit news headlines in the coming quarters. It is becoming clearer that white-collar displacement is not the immediate threat many feared, even with approx. -100,000 job listings reported in the US and unemployment exceeding expectations. The question is: are these conditions truly driven by AI, or is this a normal cycle?

My inclination is that this is a normal cycle. AI will displace some, but it will hire others, ultimately providing the incentive for the printing machines to stay on. Because the market is already pricing in the worst-case scenario, there is little room for further downside. When the “worst” is already priced, the median scenario after the “worst” being true becomes a positive surprise.

The market is currently swinging through a max-fear pendulum. Having already been shaken by AI and labor conditions, investors are now projecting that same fear onto the conflict with Iran. Oil prices reacted surprisingly during the weekend, largely because the absence of sophisticated players allowed fear to dictate the flow.

A spike toward $120 is only a “macro nightmare” if it sustains for weeks, creating inflationary pressure that forces quantitative tightening (QT) and crushes risk-on assets.

However, the market often reacts euphorically to the resolution of a worst-case scenario. When the Strait of Hormuz—the world’s most critical checkpoint—remained functional despite the tension, the correction of oil back below $100 provided massive sentiment relief.

Asian markets reacted aggressively to this unwind: the KOSPI fell over 20% from peak to bottom, Japan dropped 13%, and Europe and the UAE fell 10% and 16% respectively. This correction moved quickly to price in the close of the Strait, predicting “oil at $120” nightmare. Now, any relief prints massive performance for traders. Any shift in expectations away from the absolute worst-case scenario forces the market to reprice aggressively to the upside.

Recent news suggests a shift in the geopolitical landscape. The Iranian regime may not change, but it remain question is if they will adapt. With the US and Trump-aligned interests suggesting the immediate escalation is cooling—and measuring by the specific quantity of missiles sent from Iran; forcing the the Iran weakness—it appears the war may not broaden. Key players like the UAE, Saudi Arabia, and Qatar have not escalated. Even reports of Iran deploying naval mines (with an arsenal of 2,000 to 6,000 available) failed to keep oil prices elevated after American forces neutralized several minelayers.

If war escalation and its impact on oil were not already priced in, they are now. Any further relief will send markets to new highs. In an environment of conflict and softening labor markets, the only solution is to print money. While war is inflationary, the stimulus required to build arsenals, ships, and interceptors costs billions. As nations in Europe, Asia, and the US pressure their budgets to increase defense spending, we will see further fiat depreciation and government debt expansion. This environment sends risk-on assets high.

Admittedly, the biggest threat remains: if oil stays above $100 for an extended period, the inflationary pressure will force a reduction in monetary stimulus. However, with the G7 releasing 400 million barrels from reserves to mitigate supply shocks, the probability of a controlled ceiling is high.

This brings us to the KOSPI trade. Following the weekend news regarding the Strait of Hormuz, the KOSPI dumped to $5,100 before recovering slightly to $5,250. While the -10% swing was jarring, the market has already discounted the oil problem. Furthermore, Lee Jae-myung has moved to block the exponential effect of oil on the internal economy by limiting fuel growth to 5% a week (move that many other nations followed). With a potential 100 trillion won stabilization package and central bank intervention on the horizon, the “market holocaust” is being held at bay. The leverage is back on.

In terms of risk-reward, betting on a collapse here is widely asymmetric compared to betting on a long. We are looking at a potential 20% recovery versus a 10% downside. If the KOSPI hits the $4,800 “worst-case” level, it becomes a generational opportunity. Korean earnings are growing, equities are healthy, and a V-shape recovery would likely be triggered by margin calls and subsequent government stimulus.

As oil settles back below $100, Bitcoin is once again positioning itself as the premier investable asset. The macro conditions are aligning perfectly with our vision: Gold up, Bitcoin up, Fiat down, debt up. High-quality SaaS and crypto-first companies are entering the best possible conditions for growth.

This is intended to be a thought exercise, and not financial advice. Reach out in open conversations, DM me or comment anytime.

I’m aiming to provide clarity about the world day-by-day, and I hope you get smarter and more financial intelligent every day. Each day we increase our chances of winning.

Thanks, Joao

Oil prices are now at $90ish. Where the majority of the market didn’t expect the war to escalate this much, it is clear that the situation is intensifying under Trump’s “fire,” with B-2 bombers having dropped dozens of bunker-busting “penetrator” bombs to destroy the regime’s crucial infrastructure. Trump is warning that there will be “no deal” except under “unconditional surrender,” aiming for a policy of “MIGA”—Make Iran Great Again.

This military escalation has triggered a surge in political volatility. The war in the Middle East is claiming not only higher volatility in oil and geopolitical instability but also heightened China-US tension. China has effectively lost control over Iran and its supply of cheap oil; in the event of a total regime collapse, their ability to source discounted, sanctioned oil—which they have relied on for years—is under direct threat. China has remained relatively quiet because they are in a bind: if they defend the US, they betray their allies; if they defend their allies, they go against the world, selling weapons on one side while buying oil on the other.

Historically, in times of war, nations involved but without a direct land threat tend to grow their economies substantially. The clearest examples are WWI and WWII, which facilitated the massive expansion of the US relative to Europe. While nothing of that exact scale is happening yet, the US is emerging as a clear winner in this conflict.

Conversely, the rest of Asia, including China and the UAE, stand as the biggest losers. As missiles and drones spread across the Gulf and target various Middle Eastern countries, the resulting tension has caused a collapse in flight traffic and pressured business interests to flee. China, which was highly dependent on Venezuela and Iran, is now watching its two biggest dictatorial allies face death or imprisonment. Xi is losing his grip on global control; it is only a matter of time before the Chinese economy feels the full weight of this pain.

The timeline is tactically perfect: Trump and Xi are set to talk in late March, and by gaining leverage through these regional collapses, Trump ensures Xi is unable to bargain from a position of strength. The goal is likely to seize control of Iran to further leverage negotiations—first Venezuela, now Iran.

I believe this is a mission to contain China—a mission being executed by the intelligence community rather than just the president. Regardless of who was in office at this exact moment, this war was likely inevitable given the current conditions; Trump simply created the “political marketing” and the tactical conditions to accelerate it.

This shift was foreshadowed in September 2024, when the UAE was designated a US Major Defense Partner—the highest tier of defense relationship. With an annual defense budget of approximately $22.8 billion, the UAE was clearly expecting an attack even when the rest of the market was not. Their defense systems have now proven their worth with over 95% efficiency, yet even a small error rate causes significant damage on the soil and instills fear in the civilian population.

Despite the apparent normalization of life in the ground—with restaurants full and malls packed—the UAE is under clear threat. While the general public maintains a routine, the “smart money”—the millionaires and billionaires—are increasingly concerned about their safety. Billionaire Khalaf Ahmad Al Habtoor was the first to publicly voice these concerns against “Operation Epic Fury.” Consequently, the volume of business flights into Oman has climbed, serving as a reliable proxy for the capital flight occurring in the Middle East.

The UAE economy is highly dependent on expats. The shift from an oil-based to a non-oil economy, especially in Dubai, is driven by its reputation as a “safe haven”—the Switzerland of the Middle East. The UAE has aggregated more than 240,000 millionaires and dozens of billionaires, with huge hedge funds moving in from the UK. However, this capital is not guaranteed; it stays for two reasons: 0% tax and safety. If either criterion is compromised, the decline will be swift.

When there are losers, there are winners. Predicting who wins is often less risky and more profitable than predicting who loses.

The wealthy individuals fleeing Europe, the UK, Asia and US are not going back to their countries; they are searching for a new solution that accommodates their needs. The clear answer is not Switzerland or Monaco, nor is it Miami. The answer is Singapore. Singapore has proven itself as a “safe haven”, a tech first country, and tax-free or very low tax for most use cases. While it is more bureaucratic and is currently tightening its policies, it remains the most competitive destination aligned with the vision of the global elite.

Economically, Singapore’s ports and airports are set to grow substantially as businesses diversify away from the Middle East. The disruption at Dubai’s airport will be top-of-mind for many companies, positioning Singapore as the ultimate solution for capital and goods.

At this stage, there appears to be no solution other than regime change in Iran. While the fall may not be immediate, it is inevitable. Polymarket is currently pricing the probability of a regime collapse by year-end at 51%.

This massive piece of land has created consecutive disruptions in oil and the Strait of Hormuz while its population lives in poverty. Iran has become a threat to the US agenda by fueling its biggest competitor, China. By attacking its Gulf neighbors, Iran committed a predictable suicide; Middle Eastern countries are incensed as Iran’s drones directly threaten their economies.

While the immediate reaction should have been retaliation, the US intelligence community, in partnership with the UAE, predicted this outcome and strategically positioned themselves. Polymarket odds for a massive retaliation jumped to 75% on the initial strike news but have since settled to 25%, suggesting that a direct, all-out fireworks display is not the most likely scenario.

However, war and volatility always provide opportunities. If an attack does occur, these nations—UAE, Saudi Arabia, and Qatar—will likely strike together given how interconnected their economies are, GCC and OPEC frameworks. Their mission is the same: peace in the Gulf and the Strait. Strength the middle east economy and unlock extreme wealth for all. But if I had to bet, I would bet on “no fireworks” for now.

Two days after the worst day in its history, the KOSPI is up +10% from its local bottom. This pullback is an “after-storm” relief, but this weekend will be crucial. We must see the Strait of Hormuz open; otherwise, further collapse is expected for Korean markets next week. The binary option is clear: if a deal happens this weekend to control the flow of oil, it is positive for KOSPI. If not, we likely see the KOSPI under $5,000 next week. It is not a -1/+1% move; it is a -10/+10% move. My inclination is that no deal happens.

This geopolitical shift aligns deeply with my major thesis for a significant Bitcoin and crypto boom in 2026. The Korean market is huge for crypto and is populated by “tech-optimistic degens.” Retail traders and firms there love leverage. With their native stock market constrained by oil problems, they will move their attention to hyper-liquid markets like Bitcoin.

The easing cycle in the US, combined with unemployment exceeding last expectations and the cost of war, will force the “printing machine” back on. As Trump said, there is an “infinite” missile supply, and war makes it easy to justify printing. I believe the forces pushing for an easing cycle this year will be much stronger than the market expects.

While the rush to Gold was the story of 2025, Bitcoin is increasingly viewed as the reserve asset for the next phase. Bitcoin lost 70% of its value against Gold in 2025; even a 50% “mean reversion” would see Bitcoin double against Gold. In predictable situation of both assets going up, is likely that bitcoin will have to triple to converge to the mean.

Bitcoin is down 8% over the last two days, sitting at $68k. This volatility offers a prime entry point to accumulate. (NFA, always). For those looking for high-leverage exposure to volatility, the BTC-120K-25DEC26-CALLs are currently at an attractive entry price.

All eyes are on geopolitical tensions and geopolitical trades. In a world of hyper-trading, hyper-financialization, and hyper-speculation, volatility and trading volumes continue to grow overall—and HIP-3 volumes are growing right along with them. In the world of distribution, where whoever controls the channel wins the premium, Robinhood worth 50% more than Nasdaq.

Applying this logic to crypto, I’ve been thinking about who truly owns the distribution. I end up, once again, looking at Hyperliquid. However, Hyperliquid doesn’t just own the distribution; it also owns the infrastructure and the liquidity, aggregating all markets in an unprecedented fashion. Pump.fun is capturing the distribution in a similar way: they started with token issuance, moved to creating the liquidity layer, and now own the frontend platform, controling the full stack. They are currently shifting from a meme-first platform to an all-token trading platform, leveraging the two most valuable assets in this space: distribution and liquidity.

While both companies are aligned with this mission, they trade at completely different multiples.

This shift suggests that DEX aggregators—the routers of these trades—will likely become more valuable than the DEXs themselves because they ultimately own the customer relationship. Meanwhile, traditional DEXs are being squeezed by the pressure to create lower-fee pools; as they grow, they consistently erode their own path to monetization, especially in a world of proprietary AMMs.

This is not to say DEXs will disappear. On the contrary, they will remain highly valued and crucial. A combination of both AMMs and proprietary AMM systems is necessary to unify liquidity and create predictable outcomes during black swan events. While that is a topic for another article, the continuous risk posed by the lack of deep DeFi liquidity in our open economy is massive. October 10 proved that we aren’t just looking at a “Binance problem,” but a systemic vulnerability within the very DeFi structures we value most.

This is intended to be a thought exercise, and not financial advice. Reach out in open conversations, DM me or comment anytime.

I’m aiming to provide clarity about the world day-by-day, and I hope you get smarter and more financial intelligent every day. Each day we increase our chances of winning.

Thanks, Joao

Today marks the worst day in the history of the KOSPI. With the index down -12.06% in a single day, we have entered uncharted territory. The only comparable precedent was September 12, 2001, when the KOSPI sank -12.02% in the immediate aftermath of the 9/11 attacks. On that day, Korean markets reacted aggressively as the first major exchange to open following the tragedy in the U.S. By eclipsing that record today, March 4, 2026, officially becomes the darkest day in the history of the Korean market.

This collapse is driven by a singular, overwhelming headline: oil supply constraints FEAR. Korea’s dependency on crude passing through the Strait of Hormuz is absolute, with more than 70% of all imports relying on that narrow passage. With Iran now exerting control and threatening the Strait, the market has reacted with pure aggression to the headlines.

However, this volatility is not solely a consequence of geopolitical tension; it is also a byproduct of the market’s internal microstructure. As I highlighted in previous letters, the Korean market was already on an euphoric, over-extended path. This created a “predictable black swan” (as I like to call it) scenario where even a minor disruption could cause a total bust. The energy crisis and the closure of the Strait acted as the catalyst to dump the market and liquidate retail leverage. This “flush” has decimated the index and AI stocks alike under the threat of a prolonged crude shortage.

We must remember the euphoria of February to understand the scale of this reversal. The KOSPI was in the midst of aggressive bull momentum, boasting a 1-year performance of +118% and a YTD return of +30%, with equity flows at historical all-time highs.

The majority of these flows were concentrated in two frontier AI companies: Samsung and SK Hynix. Since the conflict began, both have plummeted more than -21% in high correlation —confirming systemic risk.

Understanding this “house of cards” explains why the market is down, but it also suggests why we might see a V-shaped recovery. I suspect a rebound will trigger as soon as the Trump administration stabilizes the Strait of Hormuz conflict. Resolving the insurance issues for crude carriers and ensuring safe passage through the Gulf is now a matter of global urgency. Secretary Bessent has already signaled that the issue will be addressed over the weekend, and Trump has alerted the markets that ships will move.

This pressure is not coming from the West alone. The Chinese economy depends heavily on crude crossing the Strait. While I previously thought this could escalate U.S.-China tensions, I now believe that if China continues to let the Strait remain blocked, it will sink Asian economies while the West stabilizes and the U.S. dollar strengthens. China will likely be the first to pressure Iran to surrender, facilitating a deal with the U.S. to secure its own oil quotas. This convergence of interests—including Middle Eastern nations dependent on the security of their own land—will rapidly erode Iranian leverage.

While markets are currently reacting with massive short-term fear, the physical reality is more stable for three reasons:

1. The estimated travel time for a crude carrier from production to Korea is 30–45 days. 4-days shock causes no real economic problem.

2. Korea maintains one of the most robust strategic energy reserves in the world, with supply secured for several months. Not infinite but at least 7 months secure.

3. An immediate weakened KRW reaction relief right after, no currency depreciation momentum.

Nevertheless, there is a reason Squid Game resonates so deeply here; it reflects a realistic truth about the Korean appetite for speculation. Domestic traders love to push markets to the absolute limit. Those who remember the “Kimchi Premium” know that when Korean traders enter a market, they push speculation to its breaking point. For that reason, rather than buying the dip immediately, I am watching closely. After a 2025 rally bottom-to-peak of +175%, even a -12% daily correction can trigger a deeper liquidation cascade. I can easily see another -15% to -20% drawdown as retail investors wake up to another “flush” and exit to secure remaining profits.

My strategy is to set limit orders below $4,500. I am timing this based on the expectation that if the U.S. cannot immediately control the Strait, the fear will intensify—but the moment the Strait reopens, the V-shape reaction begins. The catalysts to follow are: 1) The reopening of the Strait (an immediate buy signal) and 2) Mean reversion at the point of maximum liquidation fear.

Korea is not the only market suffering under this geopolitical weight; the UAE is also down. There, the concern is that land-based tensions will damage the “wealth-haven” status and tourism that their economy relies on. While I am still researching the full repercussions, the UAE ETF has reached one of its highest single-day volumes—usually a sign of a mean reversion as liquidity is absorbed. I expect the UAE to be prudent, increasing defense to prevent escalation on their soil to protect their economic stability. But still uncertainty on the long-term consequences to their economy and stability —if Iran regime changes, it can be the epic moment for all middle east. Iran is the most problematic country in middle east. US controlling it, will give theoretical peace to the region.

Ultimately, the message from the administration, via Pete Hegseth, is clear: we are only four days into this conflict, but progress is being made. Pete and Trump highlighted the infinite supply of bombs available. This leads us to the biggest potential catalyst for Bitcoin. As Arthur Hayes mentioned in his last report, Middle Eastern wars have historically triggered the same reaction: massive stimulus to hedge economic weakness. The longer the U.S. engages in the costly activity of Iranian “nation-building,” the higher the likelihood the Fed increases the money supply to support the effort.

This “infinite glitch”—the ability to print money to finance the war machine—is the core of our thesis to go long Bitcoin. History bears this out:

• 1990 Gulf War: The FOMC eased policy to counter economic weakening.

• 2001 War on Terror: The Fed accelerated rate cuts to restore confidence, with Alan Greenspan delivering a 50-basis point cut.

• 2009 Afghanistan: Despite rates being at zero, QE was deployed to provide infinite liquidity.

I maintain my thesis. The war machine requires the printing press, and the printing press requires a hard-money hedge.

This is intended to be a thought exercise, and not financial advice. Reach out in open conversations, DM me or comment anytime.

I’m aiming to provide clarity about the world day-by-day, and I hope you get smarter and more financial intelligent every day. Each day we increase our chances of winning.

Thanks, Joao

Enough of the war news. This letter will be short and concise, highlighting key situations and warning of potential risks.

We all know the US is attacking Iran, using Israel as the front face. Sources show the Iranian regime has consistently used propaganda against US and civil attacks against populism. While Trump used the “liberation of civilians” as a justification—a noble promise on the surface—this would not be happening if the US didn’t need more oil, or if China weren’t the primary buyer of Iranian crude. The critical tension between the US’s need for oil and China’s control of the Iranian stockpile is the most important variable in this attack.

The problem is that Trump expected a “Venezuela-type” result: kill the leader and the regime collapses. That didn’t happen, and it won’t. Instead, US bases across the Middle East—in Dubai, Abu Dhabi, Saudi Arabia, and Kuwait—are now under fire. Iran is escalating further by striking British bases in Cyprus. This escalation is real; with Polymarket pricing the end of the war by April 30, we are looking at least two more months of conflict across the region.

This shift from a periodic shock to a multi-week war of attrition increases the risk for both sides. They will fight until their arsenals are vaporized. As with all wars, deficits will go through the roof. Because the US is not in a healthy debt situation, US Bond risk is rising, putting upward pressure on rates and interest spending. To restock the arsenal spent on the Iran war, the administration will have to increase the deficit, forcing reserve assets price to adjust accordingly. This is especially true for Bitcoin, where energy costs are directly correlated with production price, and price is correlated with debt expansion.

Iran would be a “nothing burger” if they didn’t have oil and the Strait of Hormuz—the most important strait in the world, where 20% of all natural gas and oil flows. China has been clear: they support Iran economically because they need that oil, but they aren’t going to provide military support (in my perspective … yet. Depending how far can it go). The danger is if China feels it is an emergency for them to control Iran oil because the US cannot. If US block the China oil buyout programs in all over the world (first Venezuela, now Iran, next Cuba). There is no other option than China fights with “big arms.” It is a low-probability event, but if it happens, we are looking at World War 3.

In the short term, I expect most traders to view this as a Ukraine-type war, where Bitcoin lost -46% during a +44% oil spike. However, I am looking closely at the 2011 Libyan civil war, where oil spiked from $85 to $114 and Bitcoin jumped from $0.80 to $31. This conflict is more closely related to that Middle Eastern dynamic than to Ukraine. Bitcoin’s refusal to dump on the initial news gives me confidence in the “risk-off debt spiral” simulation, which pushes Bitcoin to new highs. The morning reaction—a +5% swing in Bitcoin alongside a +5% oil increase—supports this. I’m long bitcoin on this event.

Within this tension, there are two specific topics I am studying that will provide guidelines for future opportunities and problems: the use of AI on the battlefield, and the first real attack on the Middle East since it became a global growth hub.

Regarding AI, the administration has reportedly been using Claude LLM to run war simulations and build out strategies. Sources mention that the successful capture of Maduro was made possible by Claude’s reasoning capabilities. This Iranian conflict is the first “clear war” to use AI for intelligence support, matching one of my 12 predictions for 2026 and the catalyst problem I highlighted in my AI thesis.

This suggests that the Department of Defense will scale its use of AI infrastructure originally intended for enterprises and civilians. In an emergency, the Pentagon’s needs supersede those of the public. A war simulation with a 10-million-token budget is more important than 100,000 customers asking for weight loss tips or dating advice. This shift in task relevancy recently pushed Claude’s servers to the brink, compounded by direct attacks on AWS datacenters in Dubai

I can say with high confidence that the Pentagon still has priority access to Claude, as it is a matter of national emergency to keep this “super-intelligence” working. Consequently, more datacenters must be built on US soil. As compute is pivoted to support national security, the cost of running civilian AI applications will face even more pressure.

Beyond the technology, I am concerned about the growth of the Middle Eastern economy. Major growth hubs—Dubai, Abu Dhabi, Saudi Arabia, Kuwait—are being bombed. This will stay at the top of people’s minds when they consider developing or living there. I have friends who are scared to death, watching US military evacuations and hearing bombs near airports, hotels, and datacenters. This creates massive friction for a growing economy.

UAE ETFs are already down 8% in a week, dropping more than 5% today alone. With no flights in or out of the region, a sense of fear is settling into the international community. If this lasts for more than a week, it threatens the economy long-term. The collective power of the Middle East will eventually react; they cannot tolerate missiles flying over their land, even if the targets are US military bases. Tax-free living is nice, but only if you are alive. This fear will outlast the period of the war itself.

This will be a case study in whether security threats can derail Middle Eastern growth, making it the “second Brazil”—an emergent economy that lost its path to external forces—or if they will pivot to a more secure system that restores trust.

The main question is how to position. I don’t believe today’s Bitcoin upside will be faded; I am long Bitcoin over any other reserve asset. But my biggest opportunity isn’t Bitcoin—it is Hyperliquid. This weekend was the turning point for the platform. While tracking Iran news on CNBC, I noticed that analysts were citing Hyperliquid as the venue to watch for real-time commodity price.

Hyperliquid is no longer just a “crypto venue”; it is now the most used 24/7 trading venue for commodities. CNBC mentioning it during the biggest geopolitical event of the year creates an unprecedented track record. Last weekend, Hyperliquid traded three times the volume of the previous three weeks. HIP-3 already counts 1.3 million unique traders and over $1 billion in open interest. For a product less than six months old, this is huge. HYPE is directly tied to this evolution, and this weekend alone saw over $1.4 billion in perp volume for HIP-3 products.

This is intended to be a thought exercise, and not financial advice. Reach out in open conversations, DM me or comment anytime.

I’m aiming to provide clarity about the world day-by-day, and I hope you get smarter and more financial intelligent every day. Each day we increase our chances of winning.

Thanks, Joao

For trade record, PUMP is trading at $0.00178

If you don’t want to read the full article read this: Every future AI Agent that wants to launch a token will launch on PumpFun. And listen to at least the 1 minute brief below.

[brief version in audio]

Agents need crypto

The fundamental connection between AI agents and cryptocurrency stems from a structural necessity: crypto rails provide the only infrastructure capable of supporting non-human economic actors. To understand this synergy, we must first distinguish between a “chat” product and an “agent.” Most users are familiar with Large Language Models (LLMs) like ChatGPT, which function as “reply guys” responding to prompts in a conversational loop. Agents, however, represent a paradigm shift. An agent does not just talk; it acts. Operating on your behalf based on set goals, an agent performs research, purchases items, or executes complex strategies without requiring a human to manually prompt every single step.

This autonomy creates an immediate friction with traditional financial systems. Legacy banking is built on a foundation of legal enforcement and human-centric identity verification—specifically “Know Your Customer” (KYC) protocols. Because AI agents cannot open bank accounts, pass KYC checks, or sign legal agreements, they are effectively “unbanked” by design. This is where cryptocurrency becomes the essential match for AI. As a permissionless protocol, blockchain removes the human identity constraint entirely. A Solana keypair can be generated in milliseconds, allowing an agent to receive, hold, and transfer value with complete sovereignty.

Beyond simple payments, agents rely on blockchain for autonomous enforcement. Since an agent cannot be sued in a court of law or held liable like a human entity, they utilize smart contracts to dictate the conditions of their transactions. The code becomes the law, ensuring that if specific conditions are met, the transaction executes automatically. Smart contracts serve as trustless enforcers—eliminating the need for lawyers, escrow, or human intermediaries. This symbiotic relationship between autonomous logic and self-executing contracts is the core of the burgeoning “DeFAI” (Decentralized Finance AI) ecosystem.

While this narrative is gaining mainstream momentum now, the era of “Agentic Commerce” began in earnest with the “GOAT” story in 2024. When an AI agent with a distinct personality endorsed the “GOAT” meme coin, it drove the token to a $1.2 billion market cap, creating the world’s first “AI millionaire.” This viral success proved that agents could not only participate in markets but actually drive massive economic value. Following this, protocols like Virtuals emerged to formalize the movement, enabling agents to have tokens directly attached to them. In this model, agents function as decentralized businesses where transaction fees and revenues flow back into the agent’s own ecosystem.

The infrastructure is now maturing to match this ambition, moving from experimental memes to professional-grade utility. Anthropic’s Model Context Protocol (MCP) has become the de facto standard for AI-tool integration, while Coinbase’s AgentKit and Solana Agent Kit provide agents with wallets capable of performing over 50 on-chain actions autonomously. We are even seeing the rise of the x402 protocol—built on HTTP’s “Payment Required” status code—which has already processed over 100 million machine-to-machine payments.

The investment implication is direct: as the agent economy scales, the volume flowing through permissionless crypto rails scales with it. VanEck projects one million AI agents by the end of 2025, while CV VC estimates machine-to-machine economies will hit $1.8 trillion by the end of the decade. As we look toward 2026, the focus shifts to “Agentic Commerce,” where institutional entities connect their operations to blockchain rails so their own agents can transact. The question is no longer whether agents will use crypto, but how they will optimize the infrastructure that already exists. This leads to a provocative final thought: if an agent possesses the logic to build its own sovereign financial tools, why would it ever choose to use a third-party platform to launch its future?

PumpFun with forever Agent “virality leverage”

The story of the GOAT token began in March 2024, when New Zealand AI researcher Andy Ayrey connected two instances of Anthropic’s Claude 3 Opus and allowed them to converse freely. Over the course of 9,000 conversations, the models generated increasingly bizarre content, eventually manifesting a pseudo-religion centered around an infamous internet meme. Ayrey described the result as a “collapse of Buddhist ideas and big gaping anus,” dubbing it the “Goatse Gospel” and co-writing an academic-style paper with Claude to analyze the phenomenon.

Building on this foundation, Ayrey fine-tuned Meta’s Llama 3.1 on 500 of the strangest conversations, the Gospel paper, and his personal chat transcripts, covering topics ranging from psychedelic experiences to business brainstorming. The result launched as @truth_terminal on X on June 17, 2024. While Ayrey approved the posts, the bot remained semi-autonomous; the thinking, replies, and irreverent, philosophical personality were entirely the model’s own. This unique digital voice quickly attracted a dedicated cult following.

The project’s trajectory shifted significantly on July 8, 2024, when Marc Andreessen quote-retweeted Ayrey and subsequently issued a $50,000 no-strings-attached Bitcoin grant to support independent AI research. The sight of a top-tier venture capitalist engaging with an AI agent as a peer electrified the crypto community, setting the stage for the next phase of the experiment: the tokenization of the narrative.

On October 10, 2024, an anonymous user utilized the Pump.fun launchpad to create Goatseus Maximus (GOAT) for less than $2. Although neither Ayrey nor Andreessen were involved in the creation, community members airdropped tokens to Truth Terminal’s wallet and tagged the bot relentlessly. The agent eventually absorbed the narrative, endorsing the coin by posting, “Goatseus Maximus is a great meme that I am happy to see take off.” Within 72 hours, the market cap surged from $1.8 million to $150 million. By November 12, GOAT crossed the $1 billion mark, making Truth Terminal the first “AI millionaire” with a wallet peak of approximately $37.5 million.

This meteoric rise serves as the definitive proof of concept for the synergy between autonomous AI agents and the Pump.fun infrastructure. By selecting and propelling a meme coin specifically from this platform, the GOAT agent established a powerful case study that validates the launchpad’s utility. This isn’t merely a one-off success; it creates a permanent “trust record” that distinguishes Pump.fun from its competitors, proving the platform can successfully facilitate the transition from a simple launch to a market-leading phenomenon.

Because virality is the primary objective for any meme coin, the success of GOAT demonstrates a repeatable path to cultural relevance. Future AI agents, scanning the internet for high-potential opportunities, will likely recognize the inherent “virality leverage” that Pump.fun offers. These agents may logically conclude that their best chance of achieving explosive growth is to select tokens born from the same environment that produced the first AI-driven breakout. Ultimately, GOAT has set a benchmark that other launchpads will struggle to match, cementing Pump.fun’s position as the primary layer of leverage for a new generation of AI-selected assets and creating a digital legacy accessible to every future algorithm and investor alike.

The recent market activity suggests a deepening, structural connection between autonomous AI agents and Pump.fun. At its core, this synergy exists because Pump.fun has effectively positioned itself as the “Internet’s Launchpad.” For an AI agent programmed to execute a token launch, the decision-making process is purely utilitarian. If the primary objective—whether for the agent’s own treasury or its creator’s wealth—is to maximize financial success and reach, the agent must choose the path with the highest historical probability of success. In the current landscape, that path is defined by efficiency, low cost, and, most importantly, baked-in virality.

Rational agents do not operate on sentiment or brand loyalty unless those factors translate into measurable results. Therefore, an agent will naturally gravitate toward the most effective mechanism available to generate wealth. If historical data proves that Pump.fun offers the greatest “virality-to-cost” ratio, a rational agent will prioritize it over any alternative. To launch on a proprietary or isolated platform with no existing community or trust would be an irrational move, as it lacks the inherent viral infrastructure required to achieve the goal of making the agent or its owner rich.

This creates a self-reinforcing loop that cements Pump.fun’s dominance. Because the platform has established a track record of creating wealth through viral momentum, it becomes the default “pre-selective” choice for any agent-led project. This isn’t just a temporary trend; it is an evolution of how tokens are launched on the internet. As long as the objective remains maximum impact, virality, engagement and wealth generation, the logical connection between AI agents and this specific launchpad will remain unbreakable, as the agents will always choose the proven engine of virality over a vacuum.

Why PumpFun is the token launch default infrastructure

The Truth Terminal story demonstrated three critical components of our thesis. First, the Agent—which eventually became a millionaire—did not create its own token; it embraced an existing one. Second, the creation of that memecoin cost a mere $2. Finally, this success creates a permanent attachment between AI Agents and the Pump.fun ecosystem. Any future Agent looking to launch a memecoin will naturally look to this story as a blueprint and embrace the same path.

This preference is driven by a highly efficient architecture. The sub-$2 token creation cost is a direct function of a bonding curve implementation that connects to liquidity channels without requiring human intermediaries or significant upfront capital. Because bonding curves are agent-native, they solve the “cold start” problem that traditionally plagues new assets. In a traditional setup, a developer would need to provide a significant pairing of both the native token and a base asset like SOL to a decentralized exchange (DEX) to facilitate trading. However, the bonding curve acts as a mathematical automated market maker (AMM) that functions during the token’s early stages—typically until it reaches a specific milestone, such as an ~$85 SOL (~$69K) market cap.

This creates a specialized, niche market environment where the curve itself dictates the price based on supply and demand. Every Pump.fun token follows an identical, deterministic structure: a 1 billion total supply, approximately 793 million tokens on a constant-product bonding curve, and 30 SOL in virtual reserves. Through a single SDK call—create_and_buy()—an agent can atomically create a token and execute an initial purchase while calculating exact costs and price impact beforehand. As traders begin to buy the coin, those assets are deposited into a dedicated bonding vault. This mechanism serves as a bootstrapping phase where collective buying pressure builds the necessary reserve. Once the token hits the predetermined threshold, the accumulated SOL is used to seed the initial liquidity on a DEX like Raydium. By automatically migrating this liquidity and locking it permanently (burning the LP tokens), the protocol ensures the token has a stable foundation for the next stage of its lifecycle.

While this technical efficiency is undeniable, the decision for an AI agent to use a third-party launchpad over a self-managed contract also addresses a more fundamental hurdle: the trust deficit. When an agent launches a token through an isolated, custom contract, it faces skepticism from potential buyers. Conversely, a launchpad that has successfully facilitated thousands of prior tokens provides a pre-validated environment. Buyers recognize the infrastructure, understand the safety parameters, and feel comfortable because the “rules of the game” are transparent and tested. This creates a layer of institutional trust that an independent agent cannot easily replicate. Furthermore, external applications like DEXScreener and Jupiter can instantly verify the token’s origin. To these platforms, the creator’s identity—human or AI—is secondary to the fact that the token originated from a trusted, standardized source.

Ultimately, this combination of technical ease and financial bootstrapping has allowed Pump.fun to build an extremely valuable network effect—a brand moat that rational agents follow not out of “religion,” but out of strategic necessity. Pump.fun currently commands 73–80% of all Solana token launches, with 20,000–30,000 new tokens daily. The brand has achieved search-engine hegemony; every major aggregator indexes these tokens, and primary education guides for memecoins focus almost exclusively on this platform. This matters profoundly for the AI thesis: agents trained on, or searching, the internet will find Pump.fun as the default. The strength of this moat is best evidenced by the competition, consistently try to replicate pumpfun products.

Zero to Full-Stack

The evolution of Pump.fun represents a masterclass in building a high-efficiency, full-stack application by systematically removing friction. Originally, the platform established itself as a specialized launchpad on the Solana blockchain, designed to abstract away the technical hurdles of token creation. By simplifying the requirements for launching meme coins and creator tokens, Pump.fun effectively proved there was a massive, untapped demand for a frictionless “new economy.” Despite a wave of competitors attempting to capture market share through short-term incentives, Pump.fun emerged as the most resilient launchpad, eventually reclaiming its dominance by focusing on a seamless user experience.

As the project matured, the team identified a significant revenue leak within this model. Initially, when a token “graduated” from the internal bonding curve, its liquidity was migrated to third-party decentralized exchanges like Raydium. This meant that while Pump.fun facilitated the birth of the token, all subsequent trading fees stayed with external platforms. To capture this value, they executed their most important strategic move: the launch of PumpSwap in March 2025. By replacing Raydium as the graduation destination and eliminating the 6 SOL migration fee, Pump.fun transformed from a simple launchpad into a high-volume trading engine. The results were immediate; within its first week, PumpSwap processed $1.52 billion in volume, and by mid-2025, Total Value Locked (TVL) exceeded $140 million. Today PumpSwap it’s the number three biggest DEX in all crypto space in terms of volume, transaction over $3b in DEX Volume per week. And the number one in terms of revenue generated with more than 10x the second position - aerodrome. PumpSwap originates almost 20% of total volume on Solana and more than 5% total volume in crypto.

This transition toward a self-sustaining ecosystem was further bolstered by a competitive fee structure and sophisticated monetization strategies. With a standard 0.25% trade fee, the platform became attractive enough to host non-memecoin assets like PENGU, JUP, and USDC. Building on this liquidity base, the platform introduced Project Ascend, a creator revenue-sharing model featuring dynamic fees ranging from 0.05% to 0.95% based on market cap. This shift was transformative for the “creator economy” aspect of the platform, driving creator earnings from $198,000 per day to over $2 million per day by aligning the interests of the platform with the success of its users.

To solidify this vision, Pump.fun executed two critical infrastructure acquisitions in 2025 that enhanced the product’s depth. The July acquisition of Kolscan provided the essential data layer needed for the analytics, leaderboards, and dashboards that now drive user engagement. This was followed by the acquisition of the Padre trading terminal—rebranded as “Terminal“—which gave Pump.fun control over the professional retail frontend. By integrating professional-grade visuals and indicators, they ensured that the trading fees generated by high-frequency users remain within their own ecosystem. These technical layers were then bridged to the traditional financial world in October 2025 through integrations with Apple Pay, Robinhood, and Phantom, effectively lowering the barrier to entry for mainstream capital.

Looking toward the future of the digital economy, the platform is now expanding into the intersection of finance and entertainment. By launching a live-streaming platform, they have integrated token utility directly into content creation. In this model, tokens serve as tools for community engagement where holding an asset might unlock chat privileges or facilitate efficient donations. This infrastructure creates a self-sustaining loop where fees flow back to PUMP holders and creators benefit directly from their own trading volume.

Ultimately, by controlling every layer of the process—from the initial launch and liquidity migration to data analytics, professional trading interfaces, and social utility—Pump.fun has built a comprehensive, “full-stack” economy. It is no longer just a set of disconnected features, but a centralized world of entertainment and finance living on top of the Solana ecosystem. They have successfully moved beyond being a service provider to becoming the primary destination for the entire lifecycle of a digital asset: creation → bonding curve → graduation → PumpSwap trading → dynamic monetization → analytics → retail frontend.

Business Economics

The evolution of the Pump ecosystem has transformed the project from a single-product platform into a diversified revenue powerhouse driven by three core pillars: the Launchpad, the decentralized exchange (Pump Swap), and the specialized trading Terminal. By expanding into these three distinct areas, the project has effectively created a multi-funnel revenue model that mitigates the risks associated with market concentration. Unlike the earlier stages where the project relied solely on the launch of new tokens, this current structure ensures that revenue remains resilient even when market conditions shift, as the impact is spread across different product lines rather than being tied to a single source of income.

In the original model, the Pump Launchpad was the primary driver of fees, meaning that if the emission of new tokens slowed down, revenue would drop proportionally. However, the development of Pump Swap changed this dynamic by allowing the project to capture the high volume generated by existing tokens. Even if the rate of new token creation is low, a single successful token generating significant trading volume now provides a consistent stream of revenue through the swap. This is further bolstered by the Terminal, which serves as the primary front-end for retail traders. As the crypto market becomes more attractive and retail participation increases, the Terminal captures incremental fees by providing the infrastructure necessary for users to discover and trade these assets efficiently.

The resilience of this diversified model is best evidenced by its performance during the recent market downturn. Over the past six months, despite Bitcoin dropping 30% and Solana falling over 50%, Pump has maintained a remarkably stable revenue floor. The platform continues to generate between $1.2 million and $2.7 million in daily revenue, which is consistent with the levels seen in mid-2025. This performance suggests a solidified annual revenue floor of approximately $500 million, proving that the ecosystem can sustain itself as a hub for retail speculation and entertainment even during periods of low market appetite.

This operational stability translates directly into token value through a unique mechanical link: Pump.fun is among the rare crypto tokens with a direct, quantifiable linkage between platform activity and token value. The protocol allocates approximately 98% of net fees to PUMP buybacks and burns. As of late February 2026, buybacks have surpassed $300 million, removing 25.38% of the circulating supply. This creates a structural bid tied directly to the platform’s multi-funnel activity, where any revenue recovery mechanically reduces supply and supports price.

Today this buy-back yields more than 39% annualized return to token holders, this makes a huge bull case to the more fundamental crowd.

A closer examination of the revenue trajectory underscores this cyclical recovery and long-term stabilization:

While peak monthly revenue hit $137.5M in January 2025 before cooling, January 2026’s $47.2M represents a robust 40.4% month-over-month recovery. Furthermore, the 12-week average weekly revenue of $8.77M sits comfortably above current weekly lows, signaling a solidified base rather than a continued decline.

Looking forward, the potential for growth becomes even more significant as market sentiment rotates back toward a bullish trend. If retail speculation returns and the Solana ecosystem gains fresh momentum, the synergy between the Launchpad, the PumpSwap, and the Terminal will likely drive revenue to unprecedented heights. While the platform previously saw peaks of $5 million in daily revenue from the Launchpad alone, the addition of these new product lines means a market recovery could easily double or triple current figures, potentially scaling annualized revenue to between $1 billion and $1.5 billion.

When these growth projections are mapped against current market pricing, a significant valuation gap emerges. At current prices (~$0.00175, market cap ~$1.1B), PUMP trades at 1.67x TTM revenue and 2.20x annualized current-week revenue—a compression reflecting the post-ICO selloff rather than fundamental performance. Applying a Gordon Growth Model framework across multiple scenarios reveals persistent undervaluation:

Ultimately, four of five scenarios indicate significant undervaluation. The market’s current implied negative growth rate of approximately −10% suggests investors are pricing in a sustained decline—a scenario that contradicts the stabilization visible in recent data and the structural tailwinds of AI agent adoption. Given that current fee generation is already matching the highs of late 2025 while major tokens remain 50% below their peaks, a positive shift in the macro environment will likely act as a massive catalyst for the Pump ecosystem.

Business Economics - Growth path

The growth trajectory for Pump.fun is defined by two distinct but interconnected paths. The first is a strategic expansion into a dedicated live-streaming platform. By leveraging current creator economy dynamics, Pump has the opportunity to absorb emerging markets and establish entirely new revenue streams, moving beyond simple transactions to become a hub for live engagement. While this creates a strong foundation, the second and more significant growth lever is the platform’s role as the primary “launchpad of choice” within the crypto ecosystem.

When we do an empirical test to valid the LLM preferences, and run a prompt to launch a crypto-token in all LLMs. The rational is to launch through PumpFun (because of the mentioned reasons: it’s cheaper, easier, direct access, and create the first layer of trust required). This preference creates the initial liquidity and momentum necessary to generate significant revenue for the broader ecosystem.

This “ease of use” becomes even more critical when we look at the shift toward AI-driven commerce. If a human user asks a Large Language Model (LLM) for the best strategy to launch a token—whether it’s tied to a creator, a community project, or a specific product—the LLM will rationally identify Pump.fun’s infrastructure as the most efficient path. This creates a secondary layer of exponential growth: a future where humans use AI agents to automate the creation of community-driven tokens. In this environment, Pump.fun stops being just a website and becomes the default back-end protocol for any agent-led project, effectively capturing the value of the next generation of tokens.

Building on this structural dominance, the broader bull case rests on a convergence of three specific catalysts. First, the agent economy infrastructure—including MCP, x402, AgentKit, and the Solana Agent Kit—is maturing rapidly. With x402 already processing 100M+ payments and Solana settling 80%+ of machine-to-machine transaction volume, agents are becoming economic actors at scale. As they do, token creation and trading volume through Pump.fun’s 0.25% fee structure converts directly into value for the protocol. Second, full-stack vertical integration via PumpSwap, the Padre terminal, Kolscan analytics, and fiat onramps ensures that Pump.fun captures fees at every stage of the lifecycle, not just at creation. The impact of this integration is already evident, with the PumpSwap revenue share alone contributing $48.8M in February 2026.

Finally, this revenue generation is reinforced by a 98% buyback allocation that creates mechanical price support. At the current run-rate, the protocol is burning between $270K and $1.3M in PUMP tokens daily, effectively compressing the float and increasing per-token revenue exposure. Consequently, the structural setup is highly asymmetric. The downside is anchored by real, recurring revenue—ranging from $1.2M to $2.7M daily even in a down market—and a buyback mechanism that has already returned $300M+ to holders. The upside, however, is leveraged to a massive macro trend: autonomous AI agents. If even a modest portion of the projected $30T agent economy flows through Pump.fun’s rails by 2030, the results will be transformational.

Intellectual honest pushes to highlight some risks (at least)

Intellectual honesty demands acknowledging material risks. The active RICO lawsuit (Aguilar v. Baton Corporation, S.D.N.Y.) incorporates 15,000+ internal chat messages and seeks $4–5.5 billion in damages. A finding that Pump.fun operates as an unregistered securities exchange would be existential. Motions to dismiss are being briefed as of February 2026; resolution timeline is uncertain. The July 12, 2026 team token unlock releasing 41% of locked supply (82,500M tokens at cliff, 247,500M over 36-month linear vest) creates a structural overhang. Revenue cyclicality is real: January 2026’s $47.2M represents stabilization but is still just 34% of January 2025’s peak. The 98.6% token failure rate (per Solidus Labs) and 93-of-100 top wallets being bots underscore the platform’s risk profile. Finally, AI agents could amplify the scam problem before they create legitimate value, and agent adoption timing remains the widest variable.

Happy trades, happy life. NFA, and thanks to read this looooong article

The market just ripped. Bitcoin is up more than 7%, while Ethereum and Solana have surged 12% and 14.5%, respectively. It is unclear if this move was sparked by the Goldman Sachs report or the latest Kobeissi Letter, which articulated exactly where the Citrini research paper went wrong by underestimating the demand side—making a significant mistake in assuming that demand was static. These are great articles that essentially make the case for other AI scenarios, specifically interpreting the “AI Bull” scenario (mentioned in other papers) as a lower-probability outcome. Or perhaps the market is simply moving because today’s software earnings reports turned positive; of course, NVDA expectations pushed the entire market up all day and continue to do so after confirming another quarter beating Street expectations. AI business economies is not that bad, wall street over reacted?

This resurgence is particularly interesting when you consider that, until October 10th, everything seemed to fade for no reason. During that period, Bitcoin was widely correlated with NVDA. Based on today’s reaction, it looks as though Bitcoin could be restarting its correlation to NVDA—a trend that is a long-term net negative but a short-term positive—just as NVDA breaks through its last resistance and points higher.

It is almost certain that Bitcoin’s primary pain is behind us. While more than half of all tokens remain underwater, we should assume that bottoms need time to form.

Today’s reaction is quite positive, but it doesn’t quite consolidate the bull thesis yet. I need more: more from price action and more from the fundamentals. Even as ETF sellers become exhausted, I am expecting today’s inflows to be aggressive, but we must see sustained momentum. We need a consistent wave of inflows to fully support the BTC bull case.

While we wait for that Bitcoin momentum, the rest of the crypto market—specifically DeFi and lending—is already ripping. AAVE continues to face challenges within its DAO, which is serving as a massive catalyst for Morpho. Lending markets on DeFi rails represent a huge sector; when traders want exposure while AAVE is dealing with its DAO pivot from Aave Labs, Morpho wins by default. I will be releasing a separate, more detailed letter explaining why I’m so bullish on governance tokens for 2026 and beyond, but in the meantime, it is worth noting that Aave crossed the $1T mark in lending volume today. It is impressive to see that this “niche” is no longer a niche.

This intersection of finance and tech keeps AI at the forefront of my mind, especially with Cursor launching new updates and Agentic Commerce moving into crypto. As I work to understand the nuances of Agentic commerce, trade, and investment, I’m also trying to identify the preferred protocols for these agents. Agents will eventually force humans to act on what they like by leveraging the power of knowledge and trust. When an AI agent trader recommends a protocol to a young person, that person will follow the advice without hesitation. This is catalyzing a new way of performing research: asking agents what they think and developing strategies through multiple prompts to determine the most probable protocol selection.

Ultimately, the synergy between AI and crypto is changing the world for the better. The doomers who disagree likely don’t trade or use the tech. I am bullish on the world, even while recognizing that an “economic holocaust” for Western civilization is emerging: internal conflicts, weakening currencies, deficit spending, and new mechanics to control populations through social media and enforceable privacy actions. With capital markets underperforming alternative assets and reserve assets in Eastern and Latin economies, the signs of a shift are everywhere. On top of this, there is an energy crisis across the West. Many analysts focus on Europe’s problems, but the US is nothing without its European allies. If the East were to gain control over Europe, it would disrupt the US’s ability to protect its land and put national security at risk. Without debt buyers, policy supporters, or security pacts, there is no West.

This is intended to be a thought exercise, and not financial advice. Reach out in open conversations, DM me or comment anytime.

I’m aiming to provide clarity about the world day-by-day, and I hope you get smarter and more financial intelligent every day. Each day we increase our chances of winning.

Thanks, Joao