Winklevoss-backed analyst pushes to kill Zcash's $128M dev fund as hosts call AI selloff "maximum fear"

Zcash's dev fund fight reaches a compromise

Max Desalle of Winklevoss Capital laid out the structure of Zcash's development fund: 20% of block rewards are split between coin-holder-directed retroactive grants (12%) and the Zcash Community Grants committee, ZCG (8%), which he said currently holds roughly 92,000 ZEC, about $121 million plus cash. He argued ZCG has repeatedly misallocated funds, citing a $450,000 grant for shielded assets (ZSAs) approved months after coin holders voted 90.6% against the concept in February, and a grant called Zexi that he called inefficient.

Desalle said he personally favors eliminating ZCG entirely in favor of free-market funding, comparing it to how Linux development is funded by private companies with a stake in the outcome. However, he said he supports a compromise proposal from Zcash co-founders Sean Bowe and Zooko that redirects ZCG's future issuance into a new, currently unowned fund, and has ZCG "donate back" over half its existing treasury.

Desalle expects the proposal to pass given broad support, with implementation via a network upgrade (NU8) expected in a few months, alongside the Tachyon protocol upgrade he said should be code-complete by year end, targeting much higher throughput. He said multisig custody solutions for shielded ZEC are being built by teams called ZLE and Visor on top of an existing protocol called Frost, but are not yet live, and in the meantime recommended self-custody with seed phrases split across locations.

Hosts frame an AI-equity rotation into crypto, led by Bitcoin

The hosts discussed a divergence in equities: the S&P 500 index has been declining while the equal-weight S&P (RSP) has been rising, as AI-linked names such as hyperscalers, memory stocks and semiconductors sell off while the other roughly 450 stocks in the index are flatter. They cited a Tom Lee tweet calling this dispersion a "bottoming phenomenon."

One host argued that if capital rotates out of AI equities, it is unlikely to flow broadly into all of crypto at once, and instead expects Bitcoin to lead, consistent with prior cycles, even though early-cycle leaders had been Zcash and Near. "This time is not different. Bitcoin will most likely lead this rally," he said, adding he expects the process to play out over "weeks to maybe a month or two," needing to clear both the midterms and the Anthropic IPO as catalysts.

Hacks spread beyond Binance

The hosts opened by discussing the fallout from what they called the largest crypto theft in history, the Binance hack, now reported in mainstream outlets including the New York Post at $6.3 billion, with FBI and Secret Service involvement. They noted further incidents in the days after: a Brazilian exchange, Marcato Bitcoin, hacked for about $40 million, and an unnamed EU exchange hacked for about $106 million. Relay Protocol on Binance reportedly paused operations in response.

They also referenced unrelated cyberattacks on refrigeration systems at supermarkets in Sweden, Belgium and Luxembourg (units allegedly set to 50°C) and a reported power blackout affecting La Palma, framing these as signs of broader digital instability that could keep investors cautious about where to hold assets, from exchanges to hardware wallets to multisig setups.

Jim Iuorio sees a near-term Nasdaq flush, not a full rotation

Jim Iuorio of TJM Institutional Services said he began buying bonds in the second week of October at a 5.35% ten-year yield, partly on a strong auction and partly on signs of stress in AI-related lending, and added to the position as yields fell toward 4.88%, where he said he is "not buying any more." He compared the current AI trade to the 2001 dot-com bust, noting AI companies are generating real revenue unlike then, but warned that positioning has become "so one-sided that any little thing reverses the trade," pointing to Micron's 300% rally in eight weeks as a sign of froth.

He put the odds of a serious Nasdaq "flush" at 60%, versus completing a smoother rotation into defensive sectors (healthcare, staples, financials) at 40%, noting the top seven S&P companies reached roughly 35% of market cap versus a prior historical high of 26%. He said he is short Nasdaq against long S&P, a trade he has held for about two weeks and plans to add to, and has cut roughly 80% of his AI exposure while retaining some upside participation.

"If people are heading to the exits, they're heading for the exits in earnest. And they don't care what bid they have to hit to get there." — Jim Iuorio

Iuorio also flagged concern about AI-related lending concentration around Nvidia, calling the circularity of multi-trillion-dollar financing commitments a bigger risk than equity valuations. He said he would start buying gold around $3,500 if it flushes alongside the Nasdaq, expects the Fed to effectively act as a backstop via bond-buying (he noted the Fed is buying roughly $40 billion a month despite a hawkish stance), and separately said he expects oil to fall toward $50 by 2027 as new supply from Venezuela and the UAE comes online.

Midterms and the Anthropic IPO seen as near-term catalysts

Hosts cited prediction-market odds showing a 72% chance of a Democratic sweep in the midterms, a 95% chance of winning the House and a 73% chance of taking the Senate, with results expected Wednesday. Iuorio said he sees the midterms as a secondary factor compared with the AI "wobble," arguing markets are relatively comfortable with a divided, "dysfunctional" government, though he noted Republicans are generally seen as more business- and AI-friendly.

Both hosts and Iuorio flagged the Anthropic IPO, expected around November 16, and Nvidia earnings around the same window, as major unknowns. Iuorio said Nvidia's earnings themselves are not in doubt ("Nvidia is going to kick ass") but market reaction is, while Anthropic's IPO pricing is harder to judge given no prior trading history, comparing it to SpaceX's IPO dynamics.

Where the hosts and guest diverge

The hosts speculated that hard assets like Bitcoin and gold could bottom and reverse faster than equities once any "emergency response" from the Fed materializes, with one host saying he would welcome a short-term 20% drawdown in Bitcoin if it forced a quicker Fed reaction. Iuorio did not explicitly endorse that framing, focusing instead on his base case of a Nasdaq-specific flush rather than predicting Fed easing timing beyond expecting a shift "by mid-2027."

No speaker gave a firm price target for Bitcoin; one host said he doesn't expect new lows but allowed for a possible move into "the 60s," while Iuorio declined to extend his analysis to crypto prices directly, keeping his comments centered on equities, bonds, oil and gold.