An honor to be at the Hyperliquid forum. You guys have made my [ __ ] P&L a year this year, and I'm sure all the people who work for me are going to be happy with their bonus. Um, so, money printer go [ __ ] burr. What are we buying? This is obviously a trading-focused situation. You all are here to make [ __ ] money. We're not here to talk about anything else. So, let's do it.
So, at the end of the day, what guides Maelstrom and my... So, I run the directional book at the fund. I don't really get involved with some of the VC stuff. I'm a [ __ ] DJ and punter. I like things that have a narrative, a new narrative, not the same [ __ ] narrative that I heard on CNBC 15,000 [ __ ] times. I want something that's new and raw, coming from the grassroots, bubbling up from social media, the Discord, the Telegram chats. That's why I hire 24-year-olds, cuz that's the [ __ ] job, figure out what the new [ __ ] is, cuz I ain't doing that.
You combine that with a good chart. What's a good chart? A chart that looks [ __ ] busted, like a piece of [ __ ] [ __ ]. Like, I want this token to be down like 99 [ __ ] percent. Because at the end of the day, when I combine a new emerging narrative with something that's been busted out, I can deploy a small amount of capital but generate X's and, you know, at a nominal level, much more return for less risk.
So, why the Hyperliquid forum? I'm actually not talking about Hyper the token, but there is a sort of overarching theme that I'd like to impart upon you guys. I'm assuming you're very influential in the ecosystem. And that message is: don't settle. So, obviously I think Bloomberg just listed Hyperliquid as a page. You can now pay $24,000 a year and ingest public API data. I know I'm one of the puppets who do that as well. Um, but yeah, Bloomberg is cool, and it's a great validation of what you're doing. And obviously US President Trump got up there and talked about how Hyperliquid should come to the United States. I say this with a very large piece of caution: don't forget what made you special.
Obviously, the US and the developed world's regulated market are big markets. There's hundreds of millions of very wealthy degens who want to lose all of their money trading perps, right? I get it. Very exciting. But if you have to compromise the product that made Hyperliquid the success that it is, then they're just another shitty [ __ ] exchange, just in the United States or Europe or whatever the [ __ ] um people are going into.
So, the leverage. High leverage. Retail muppets want high leverage. If you have to downgrade the leverage, what's the [ __ ] point? Limited liability, right? One of the greatest things about trading in crypto is that I know exactly how much money I'm going to lose, whatever my initial margin is. We as the exchanges cannot come after you for bad bets. That goes into sort of the socialized loss bucket. Right? These margining systems that have emerged out of the crypto ecosystem are part and parcel to what has made BitMEX, Binance, now Hyperliquid, extremely successful. If you have to give up any one of these three things to enter a new market, you are compromising. Your product is no better than the CME, the NYSE, Euronext, and any of these other dog [ __ ] exchanges, and you'll get the same results, average. And I don't think any of you guys are here for average.
You're here to make [ __ ] money. So, again, don't settle. If that is what has to happen for Hyperliquid to enter a new market, don't [ __ ] do it. Continue to be the rockstar that exists in this unregulated space and on Bloomberg and all over the place. So, that's my Hyperliquid soapbox. Now, let's get to it and into my champion. What are the shitcoins that are going to power our returns going into the end of the year and next year? So, we have Ethereum, the narrative of RWA tokenization. We have Ethena, sort of the basis-yield synthetic dollar stablecoin. We have Uniswap, the execution layer for tokenized securities. And then, finally, the new project that I'm launching, the Flap Network, agentic payments, money for your AI agent.
So the macro is very favorable. I know a lot of people think that when you raise rates, you actually reduce money printing, but actually in a highly indebted economy — this has been written about by various economists, most recently studying Brazil in the 1980s — is that when you raise rates in a highly indebted economy where a predominant amount of the debt stock is at the short end, you actually increase inflation because you just add more money to the banks and wealthy individuals.
So for every 25 basis points of the Federal Reserve rates, I estimate about $25 billion of excess liquidity. That comes from paying banks on their reserves at the Fed. That comes from paying higher interest rates on T-bills, which must be rolled at a maximum every year. And secondly, the balance sheet. Yes, the Fed has kind of paused reserve manager purchases, which is truly light over the past few months. However, we take a look at the banking system, the new regulations that started April 1st in SLR have allowed the banking system to continue to supercharge their asset growth. The bank balance sheet is up by $200 billion in the last two and a half months. So if you combine the Fed and the banking system, plus when you raise rates to combat inflation, you actually create more inflation, the macro environment is very favorable for us to pick the right shitcoin and hopefully make some bags.
So again, here's the shitty chart. This is the Ethereum long-term chart since 2018. As you can see, like a piece of [ __ ], it did not eclipse its 2021 all-time high. Ethereum Foundation is selling [ __ ] cryptos. Vitalik's running around the world. Everybody's [ __ ] on them. They have [ __ ] at ETH Denver. Who can go to Denver? Anyways, um, so like, we all hate ETH.
But the [ __ ] TradFi muppets like ETH. Robinhood chain, right? So if you think about it, if you're a TradFi muppet, what's your job? Make a salary, lose money for your client. But lose money like everyone else is losing money. So, if you have to build innovative DeFi, you got to choose a chain. Now, you don't want to be the first one out there. You choose this, I don't know, Berachain. It's down 99%. Maybe it doesn't even [ __ ] work. You need to choose something that's not going to have you lose your job. So, if it's good enough for Robinhood to run their, you know, tokenized equities on, it's good enough for you at BlackRock, Fidelity, Schwab, wherever the [ __ ], right? So, this is all about that gives institutional muppets the license to use Ethereum because one of their brethren is using it, too.
And as we can see, TVL is pumping. People are trading dumbass memes paired with stock. I don't even understand how it works, but they're doing it. Doesn't [ __ ] matter. And this is the narrative that's going to power Ethereum. It is the security layer for institutional DeFi. And this is my short-term price target, 5,000. I think it could go much higher. I'm sure if, I don't know if Tom Lee's speaking at this, they'll tell you 10 or 20,000 or some [ __ ] number.
Next dog [ __ ] chart. Uh, Ethena. And I was a founding advisor of this [ __ ]. Um, what happened? Shitty tokenomics, which I can pretty much say pretty classically defined a lot of token space. They had lots of VCs like myself who have to sell their DPI for our investors, myself, and so we just keep dumping. [ __ ] goes down 95%. In addition, the thing that made Ethena special, which is the basis yield, evaporated as Bitcoin was down-only and it went sideways. Volatility collapsed. And as you can see, the thing went to like a dollar fifty and bottomed at about seven cents.
What's changed? So, you know, after vesting, the treasury buybacks in August, we get this 20,000 sell-off pump in Bitcoin. Uh, synthetic dollar rates spike. Now immediately above treasuries, which makes sense now to actually hold USDC and stake it, because you have to be compensated for the smart contract and exchange risk that you're taking by doing that. And as a result, USDe in circulation bottomed and now is heading upwards. And this is why Ethena has come something like 4x off of the lows. I put it at about a dollar in terms of where our internal price target of where we want to see Ethena before we really start exiting our position.
Next, Uniswap. I think Uniswap is one of the best primitives ever invented in crypto. Constant product, automated market makers, great product. Obviously, this thing ripped in 2021 with it something like that, almost $20. But again, the tokenomics were to [ __ ] right? Uniswap makes a lot of money as a protocol. But not until recently, none of that money made its way back into our pocket as token holders. Pair that with increased competition — this is an open protocol, other people copy this new swapping mechanism — and we have the recipe for, you know, dying down 90% on this chart.
So, again, what's changed? I'm creaming in my pants. Wu-Tang Clan, cash, money rules everything around me. If you have a token project, I want to see product-market fit, real clients spending real money, which is not your token. And then the most important part, which most tokens refuse to do, is you take that fund money and you hand it back to me as a token holder. Now, Uniswap started doing that with a buyback, and lo and behold, that's very popular. You could also do some sort of staking emissions. It doesn't matter. But since they have turned on this mechanism, you know, revenue to token holders and to buybacks has gone up, up and to the right. And as a result, the token has pumped.
Pair that with Uniswap as the execution layer for Robinhood chain, and now you have a double narrative, right? Great cash flow for token holders, and institutional markets can execute their dog [ __ ] trades through Uniswap and pay them more fees. Perfect. This is why I think it's going to take Uniswap to about $20. It's about, I think, eight or nine dollars right now. It was up a little over about two, so there were some people sitting on some pretty hefty gains.
And then finally, the new product that I launched recently, the Flap Network, is all about agentic payments. And the thesis is AI agents need a form of money. And this mining network will be extremely valuable. Here are some charts from Goldman Sachs. They're estimating agentic demand will grow something like 24x over the next few years. This is really driven by compute getting cheaper and cheaper, and the models getting better and better. I'm sure some of you know the Facebook Meta AI app, number one downloaded app in the App Store. You pay $100 a month and Mark Zuckerberg can steal all your data. Um, they put it into an agent. But at the end of the day, it's a convenient way for people to optimize their lives and use these new economic things called AI agents.
But there's no fit-for-purpose currency for this new, uh, economic actor. Tokens, these things that we get charged by OpenAI, by Anthropic, they don't actually equate to anything other than a non-standardized form of billing. I still don't understand what my bill amounts to. They are not actual compute. I define compute as floating-point operations per unit of time. This is the action that every single agent does when they process inference. Fiat, stablecoins and fiat itself are not directly convertible into compute.
They are a bunch of people who decide the supply curve, they can change it whenever they want. They can take away your ability to access the network. Completely centralized, opaque, not fit-for-purpose for an AI agent who doesn't have to use one of these systems. And finally, Bitcoin. Obviously, I love Bitcoin. It's one of my largest holdings. But again, Bitcoin is spending energy to solve prime number puzzles. It's not directly related to compute. So there's an opportunity to create a new payment network for what will be the largest economic force in our known universe.
And so, we define the network value as some of the theoretical maximum, two to the n times some coefficient, right? Some big [ __ ] number. But that's great because we have a north star to look to. This isn't just a play to create a spot market for crypto. This is a way for us to own the network of AIs, which could be the most valuable network ever created. If it isn't Flap, it'll be something else.
So, I gave an AMA a few hours ago at the PARKROYAL. Now, right now we're in awareness building. We will be launching our testnet at the end of October. We have an airdrop, where we're airdropping 25% of the ten-year supply to people who mine, validate, or use the network. And then, the only way to acquire the token is to mine it starting in the genesis block of next year. So, we hope that Flap becomes one of the largest cryptos in very short order because of the momentum of the AI narrative.
So, again, price target: Flap is greater than Bitcoin. So, thank you guys all very much. I hope the token is very profitable for everyone, and we all make a lot of [ __ ] money. Cheers.
