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A
Are you curious about the economic forces shaping your daily life? The Planet Money podcast from NPR makes sense of the economy in ways you'll actually understand and enjoy. Guys, you love listening to the rundowns. I get some of that information from this NPR Planet Money podcast. Especially recently with the war going on, the straight of Hormuz, you're just kind of getting those updates as they come from these guys. They put out a ton of awesome content. It's a different perspective from crypto101, but still a great listen. So go over there and check out the Planet Money podcast. If stuff like current events and the finance world interest you, each story on Planet Money starts with a question. Recent episodes ask why Pokemon cards are growing faster than your retirement count. Questions about the war, just like we talked about recently a lot on our program. From the job market to the stock market to prices at the supermarket, Planet Money explains it all. Planet Money is a different kind of world where the complex economy somehow makes sense, where human stories supersede abstract theories so you can learn, laugh and be entertained. It's econ, but just down to earth. The hosts go to unusual lengths to explain the economy. They've published their own book to track the global supply chain. They've shot a satellite into space to understand the economics of the private space industry. They've gone inside a live book auction to show how ideas get to market. It's the kind of show where you learn something, probably laugh and walk away seeing the world a little differently. And I think if you like crypto 101, you'll enjoy planet Money. So maybe check that out. Follow NPR's Planet Money podcast and understand how money shapes the world. When we started this podcast, it seemed like we had to figure it all out on our own. Scripts, set up, filming schedules, logos. It was super overwhelming and every day seemed to introduce a new decision that needed an answer. When you're starting off with something new, it seems like your to do list keeps growing every day with new tasks. And that list can easily begin to overrun your life. Finding the right tools that not only helps you out, but simplifies everything can be a game changer for millions of businesses. That tool is Shopify. Shopify is the e commerce platform behind millions of businesses around the world and 10% of all e commerce in the US from household names like us at Crypt Nation and the Crypto 101 podcast where you can get our book and merch to brands that are just getting started. Get started with your own design studio with hundreds of ready to Use templates Shopify helps you build a beautiful online store that matches your brand style. Accelerate your efficiency Whether you're uploading new products or trying to improve existing ones, Shopify is packed with helpful AI tools that write product descriptions, page headlines, and even enhance your product photography. Get the word out like you have a marketing team behind you. Easily create email and social media campaigns wherever your customers are scrolling or strolling. And best yet, Shopify is your commerce expert with world class expertise in everything from managing inventory to to international shipping to processing returns and beyond. Start your business today with the industry's best business partner, Shopify and start hearing. Sign up for your $1 per month trial today at shopify.com crypto101 Go to shopify.com crypto101 that's shopify.com crypto101. All right everybody, welcome back to another edition of the Crypto rundown. As promised, a Friday episode with our friend Brendan who is going to dive into the charts because as the volatility continues to heat up as we enter the summer months, there's a lot of news to break down. There's a new fed that actually gave out some new mandates and new directions. We're going to break down that plus all the other crypto stuff in the news. But you saw the thumbnail, you saw the title, and Brendan's here. So you know what we have to do first? Jump right into the charts. Brendan, Happy Friday, my friend. How are you?
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B
Happy freaking Friday. TiVo, man. It's gonna be a good one. We're coming in here right past the halfway point of June, officially through the halfway point of this year. What a wild year it's been so far. Definitely a bit of a roller coaster, right? Lots of ups and downs so far on this year, the downs prevailing a little bit, but that doesn't mean that there's not opportunity. And so, you know, like you said, we're going to jump into the charts here and we're going to see bitcoin bouncing off a fresh $62,000 as it's getting a little bit of a bounce as we're trying to make this video. So let me throw this up on the screen for us and we'll kind of examine what's going on here. Now I want to show the charts first, but after that I want to go through five or six different things that I think are contributing to the current state of the market and some of the bearish activity that we've seen here. So will probably reference back to the charts but this is going to be more so the Technicals. And then in just a moment, when we're done with this, we'll go through more of the six fundamental catalysts that are some of the reasons behind this crash and behind this bearish activity. And I think that'll help the listener kind of understand what's happening, why it's happening and what's going on really behind the scenes here. But the Technicals first, because, you know, we know people love this, that they love looking at the charts and hearing what's going on. It's been a pretty rough time since the rejection of that last Bear Flag that we had, right? We've talked about it a lot, so I don't want to spend a ton of time on it. But what we've seen here so far is bitcoin. You know, the rejection of that prior support, turn resistance, the 200 day moving average, that anchored vwap from the all time high, you know, the top of this Bear Flag, all the above, you know, and then the ultimate breakdown of the Bear Flag here has brought us kind of to where we're at. You know, we bottomed out at slightly lower lows of 59, 000 compared to 60, 000. And you know, since then we bounced up a little bit, but again, unable to break this 20 day moving average, was only able to retrace about 14, 13% to the upside and that was coming after about a near 30 move to the downside. So not even half of this was able to get retraced at least so far. But you do see selling pressure once again coming back in. Now. I think the trend here is obviously looking in a rough spot, right? You look at every prior Bear Flag and you see bitcoin go from a Bear Flag into new lows, Bear Flag into new lows, Bear Flag into new lows, Bear Flag. And this time we haven't gone into new lows yet. So that kind of begs the question here, are we going to go into new lows? And I think you have to leave that as something that is a possibility. You have to leave that option on the table here. It doesn't mean it has to be all doom and gloom, right? I saw someone saying like, oh, we're going to go to straight to 10,000 or 20,000 or whatever it may be. And I was like, well, you know, let me temper expectations. I don't really think it's quite that bad. But you know what we often see in both market cycles right to the upside in the bull markets, you see people projecting that bitcoin will go higher than it actually will. And in the bear markets you see people doing the same and they have these crazy predictions that bitcoin will go way lower than it actually will. And it works both ways. So I'd say that there's a nice happy medium here where you can say, hey, the trend is still bearish. The technicals here also don't look particularly great. I wouldn't say they look horrible, but you know, they're not, you know, a great spot yet where it's like, oh my goodness, I need to be smashing longs, getting in leverage. I don't think we're quite at that spot yet based on the data and the charts. But you know, I would leave the room and leave room for the conversation that you could solve bullish activities here. And that's really, or, excuse me, bearish activities. You could potentially see new lows, you could see a retest of the lows. That's still something that's just on the table until we're proven wrong here. So again, rejection of the 20 day moving average. You see the selling pressure coming back in bitcoin back to around 63,000 here on the low end and, you know, pushing back into support. Now this will be a pretty interesting zone because what you have here is this orange line, which is an anchored VWAP from the 2022 lows down over in here. And then if you go to a weekly chart, you know, what you have Here is the 200 week moving average, which we've talked about quite a bit over here. But the reason why this is significant is because over the course of bitcoin's history, you kind of look back at this 200 week moving average, which is the yellow line. And obviously this has been a huge buying area for people who wanna buy in the bear market. At the depths of the bear market, you could look back to the start of 2015, the end of 2015, you could look at 2018-2019-2020-2022. We went obviously a little bit beneath it, but still a buying opportunity. And now as you kind of zoom in over here, once again, you're really approaching this level where whenever you get around it or below it, long term, buyers tend to be buying at really, really great levels, you know, based on the historical data. So I would look at all this and I'd say, hey, you know, one of the big things that I've been an advocate that we need to see is higher swing lows on the relative strength index. Looking at this chart, you can see that we have had lots of bearish divergence and bearish convergence and there's all these bearish signs that have been firing off here for the last two to three years. But what we can see, or what we need to see now is kind of the opposite of this. We need to start seeing bitcoin put in higher lows from the oversold territory. That could happen on the weekly time frame of the relative strength index, which is what we're looking at, or it could happen on the daily, which is where I think it needs to start. So any kind of higher swing low in this oversold territory would be a good sign for me. That would be showing me that the sellers are essentially losing strength upon these moves to the downside and thus that the bulls would be gaining it. So we haven't quite gotten that yet. You also have not quite gotten the MACD crossing fully to the upside on the one week time frame, which is another thing that I want to see. MACD is still pretty low here on the weekly, and if you go here on the daily, it's obviously back into this more oversold territory. So, you know, I think we're looking for a couple of signs here that could maybe give us a better idea that a bottom is in. We're just yet to fully see those. And so I think you have to leave the conversation here on bitcoin open to the, to the topic of more downside. And what we've really seen is the sellers come in and just sell the rips. You know, every time it kind of goes up, you see people capitalizing on the moves up, followed by a lot of selling pressure. So, you know, for the time being, the way that I want to position here and the way that I'm thinking about it is I think you have really great long term opportunity. You know, when I'm thinking one, two, three years out, I'm really not worried about that. I think you get yourself into, you know, at least for me personally, I look at that as long term accumulation and I'm pretty confident in that. I think it's the next day, the next week, the next month, maybe even the next few months. You still have a little bit of uncertainty here in the crypto market and we'll get into some of those catalysts as to why. But technicals here, again, long term value looks really good and you know, there's a lot of data behind that. But shorter term is just a little bit more uncertain. So if anything, I'm doubling down on what's winning? I'm doubling down on maybe the large caps that I feel are safer and I'm doubling down on anything that I believe has like fundamental value and can be a long term bet. And I'm looking a little bit more at those right now.
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A
A great analysis of bitcoin. Any other, any other things catching your eyes in the charts? I know we have two mats. We got Matt B, we've got Matt Shank in the chat. Anybody else out there in the chat? Give us, let us know where you're calling in from. We had one from Minnesota. We could do questions at the end if you guys stay on the call. But Brandon, what else is on your mind before we move on?
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B
Yeah, you know, I've been watching Ethereum and Solana here. You know, one of the things I will say that I like on this is that you're seeing, this might sound bad at first, but you're seeing, you know, a decent amount of underperformance on the moves down and you're seeing over performance on the moves up. What that means is that you're seeing volatility in both directions. I would actually be pretty concerned that if we were looking at this breakdown and you know, from top to bottom here you have almost 40% on Ethereum and on Solana over here you have almost 40% as well. Well, we looked at Bitcoin and it was just shy of 30%. So on these moves down you're seeing an increase in volatility on Solana and Ethereum which at face value looks bad. The difference here is that on the moves up, on these rallies up, you're also seeing outperformance to the upside. So you're seeing again more volatility in both directions. A 27% move on Solana and for Ethereum over here it was about 23, 24%. You compare that to bitcoin, again, bitcoin fell about, you know, 28% and then it rose only about 13%. So you have both of these different, you know, large caps, Ethereum and Solana, outperforming, you know, more than two to one and seeing twice as much upside, which I actually think is a good thing. I would actually, I would be really nervous if we just saw downside performance where you saw them moving with more volatility to the downside and then equal to or less than what we're seeing in bitcoin's volatility. So if these were coming up like bitcoin, you know, 13% off their lows, but they're falling even more. I think that would be a cause for concern and that would make me think, hey, we probably need to go a decent amount lower. But we started to not see that as much. Again, they are seeing a decent amount of buying pressure and volatility off these bounces. You know, more than twice, right? Solana was more than twice what Bitcoin was doing. Um, Ethereum was nearly two times the upside that Bitcoin had on this bounce. And that's, I think, a good sign. Again, I would be really nervous if you weren't getting that. You are getting a decent amount of buyer volatility and seller volatility and that's actually pretty normal behavior from altcoins, which is something that I've noticed.
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A
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B
The other thing here is that you still have different alts that have been performing quite well. You know, Aerodrome here on the last week or so, really nice rally of around 71%. I've also been watching Hyper Liquid in here, which is, you know, one that we talk about pretty frequently coming off these most recent lows, bouncing up, hitting new all time highs, up about 45%. Coming in with a little bit of selling pressure here. But again, you know, this is something that hit new all time highs this week and is still showing decent levels of strength and activity, which I happen to like. There's some other ones that have been
- [19:29]
A
holding long term unit swap because we talked about the standard charter initiative for Uniswap and then Brian and I were talking about how Uniswap Aerodrome kind of caught a bid off of that.
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B
Yeah, you know, Uni Swap here, another one that's had a good bounce this week, bounced up about 60% here in the last week or so off those recent lows. So yeah, I mean, that's a good catch. Right along with Aerodrome. I, I would say I think Aerodrome looks a little bit stronger than the uni chart. Uni's been, you know, pretty hammered here for a while and Arrow has two, but I think Arrow Drum just looks a tad bit stronger. I think their tokenomics are a little bit better too personally, which is probably, you know, a factor to be considered. But yeah, I mean, yeah, you have Hyper Liquid as well, which we, we have talked about quite a bit. Zcash with a really big bounce off these lows where there was a lot of FUD, you know, 114%. You've also seen obviously Venice hold value decently well, but kind of rounding over to the downside A little bit. Akash has been on a pretty big run here and yeah, I mean, overall, you know, altcoins for the most part are obviously leaning bearish, but there are some, some sprinkles of winners out there. And you know, we can't forget Near. Right. Near has been on a pretty good run as well. So a lot of opportunity. We'll do.
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A
We'll do one more from the chat before we move on. Brent, I think we got a new. A new friend of the show is Matt from. Matt from Minnesota, obviously one of those ones. He wants to know about XRP and we love the XRP army, but you know, he's new because he probably hasn't heard a lot of our takes on xrp. So let's give him a little read on that. And Matt, welcome to the Crypto101 family. Give us a like subscribe everybody give the video a like. We appreciate it. We've got David from Kentucky, Matt, another Matt from Tennessee. Anybody else watching, let us know where you're watching from before we move on. We'll get XRP and then move on to the news.
- [21:24]
B
Damn. Well, it's good to see you. If you are new, it's great to have you here. We appreciate it. Yeah. You know, like TiVo said, I have a very interesting view of XRP. It was one of. One of the first altcoins I purchased. I've traded this thing on and off since like 2017. So I've been around since basically the beginning of this thing and on and off a part of it. My kind of stance on it right now is, you know, I know a lot of the listeners know, not a huge fan of the fundamentals, but I like to trade the thing. So I, I do have exposure on and off to this guy. I like to trade it. I haven't touched it in a while. And so my stance on XRP here is that, you know, regardless of the fundamentals. Right. You know, not even getting into that conversation, just sheerly the technicals in the chart. What you have seen here is, you know, pretty clear underperformance for a while. Pretty clear underperformance where it's been doing worse than Bitcoin, worse than Ethereum, worse than Solana, just not really seeing a great trend in. When it does get bounces, I would say the bounces are just again, worse than what we've seen in other assets and then the downside immediately comes in fairly quickly afterwards. So here's that downtrend that you've had for a while now. Right, very clear downtrend, lower, high, lower low, lower highs, lower lows, just on, off, on off, all the way down. And you know, with it bleeding in the new lows here, that's nothing new, right? You're seeing that with other charts as well. I would just say that with, with what we've experienced recently, you know, it didn't even get pushed up. If you look at this consolidation, you know, there was really no move to the upside, just sideways chop. You at least compare that to, you know, obviously Bitcoin. You know, you had a test of the 200 day moving average. You can go and look at Ethereum and at least you had some higher highs. Putting in pressure, breaking out. Solana kind of in the same boat honestly as, as XRP here with in terms of oops, I just deleted one, I think I just deleted Solana. But you go back to XRP here and again the story here is, is underperformance for me. So I haven't touched this guy in a while. The thing about XRP2 here is I'm going to zoom out real fast. TiVo to give us a big picture. When it goes, it goes right. When this thing is hot, it is hot and it runs so hard, but when it's not, it just doesn't do a lot. And that's a little bit like concerning, right? You know, here you have that famous 2017, 2018 run. It happened, it chopped sideways for years and just bled. Then it had a big old run over here. It came down, chopped sideways for years and bled. Then it came on this run. Now it's chopping down. I don't like it during these off periods and I do think that the argument against them has gotten stronger as Blockchain has advanced technology has increased. Different alternative solutions, especially internally in a lot of these financial institutions have started popping up left and right. You know, take it from us, we, we talk to these different asset managers and financial institutions and banks and payment providers like we talk to them and you know, yeah, I think they're in a tough spot. It doesn't mean they can't go up, doesn't mean they can't rally, right? They probably will. And when they do rally, it's going to be electric again. But I think in the current spot here they, they do look just like one of the weaker picks, right? It's hard to look at them right now coming off the lows, really sharp rejection off these highs and also kind of measuring up here. You know, it's what rejection of the 50 day moving average falling about 13%. Awfully close to the lows once again, I don't want to beat it up too bad, but again, the goal here is just to give my honest thoughts, you know, in a semi, semi unbiased way. But I think the chart looks, you know, tough, right? So XRP is just not something that I want to really be looking at too much right now. But that could change.
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A
But that doesn't mean that we don't love the army, right Brendan?
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B
Yeah, oh yeah, well, I mean, listen, we want XRP to succeed. We want it to do well, we want all of crypto to do well.
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A
Right.
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B
I'm not a hater of it, but yeah, we just tell the facts.
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A
So to wrap up the ta, we got a couple other questions there, but we have to move on. So if anybody's interested, Matt, I know you're new, you keep kind of throwing in some tickers. So check out the link below. It's Brendan's six week training course. You can kind of learn the ins and outs of how he does technical analysis. And you get a live session with him every week and it's an hour long, twice a week and you get to throw in some, some questions, all the questions you could ever, ever want. Plus learn all the tools and tricks that he knows on the charts. So check out that link below if you're interested in more. Or maybe start with, you know, just a $1 trial of one of our other products. But we appreciate everybody tuning in. Brendan, I saw you, you shared something that was really interesting. It was bitcoin supply and loss versus price. Is that something that transitions well after the charts that we should bring up?
- [26:33]
B
Yeah, let's throw it out there. Yeah. This is an interesting one here. What it, I mean, well, it shows a couple of things, right? One of the things that I am always curious about is where do the majority of people sit? And what this shows is that number one Bitcoin's at about a 50% loss. What that also means is that over 50% of, of, of holders or a lot of holders, excuse me, are also sitting at a loss. So there's two ways of looking at this. One would be really scared and saying, oh my gosh, this is pessimistic. Another chart that maybe we can show here towards the end, we've shown it a lot on these, so maybe we don't need to throw it up once again. But I have this chart and it shows, well, what's your average return rate when you're buying at a 50% loss. Right. It shows what's your average return rate at a 10, 20, 30, 40, 50, 60 and 70% drawdown of Bitcoin. If you're buying at those drawdown points of, you know, 10 to 70%. And what would be your success rate one year out and around the 50 mark, I believe the return rate is 89.8%. So if you're buying at a 50 drawdown, the statistical odds based on the last, like, 10 to 12 years of data is that you'll be green 89.8% of the time. And your average, your. I think your average and your median return are also both over around a hundred percent, which is kind of crazy. So again, you look at this and you see, oh, my gosh, 10.5 million Bitcoin, or over 50% of Bitcoin supplies now held at a loss from just 30% a month ago. And you see this number. Well, again, you know, when this is when we're kind of typically in these spots, it marks a bottoming point. When you get around this area, you can kind of see this happening here. Obviously, in the Last Bear Market, 2022, you see this happening, you know, during the 2018, 19 run. You see this way back before then in like, excuse me, 2016, 17. And these are all historically, like, decent buying opportunities. But, yeah, I thought it was an interesting chart. It basically says, hey, how many people are at a loss here? And what does that meant historically? And if you would have bought at these areas, you know, during historical drawbacks, you probably would have been pretty happy. But it. I think it shows that we need to get to max pain before we can get the max gain. Yeah.
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A
And you know, again, you can't pinpoint or exactly know where the bottom or the top is. Anybody that says they know is is lying to you. So Max Payne can't be too far away. Or maybe it's already here. I think it's interesting when you start thinking about Max Payne. It's like, okay, there's the single max pain of the downside to the bitcoin price or having your money in crypto. But there's also an opportunity trade loss of a lot of people. You know, whether you're in crypto or, you know, whether you're in the healthcare sector or whether you're just in staples of watching this AI trade happen. And you're looking at sandisk go up, you know, 17, you know, X or something in a couple months. And. And like, there's an opportunity loss there. So it's interesting to kind of take in all the, you know, all the factors of what max pain might be for traders. And we've kind of seen this go around. And Brian and I brought up just a fun stat of all the prediction market gambling that's been going on for FIFA. And you're like, well, how. Why does that matter? And it goes. Well, the money goes where. Where things are hot and entertaining and exciting, and FIFA is the exciting thing right now. And now there's billions of dollars flowing into prediction markets, which, again, for sports, is just literally gambling. It's sports gambling, call it what it is. So, again, crypto is not the bell of the ball right now, but when it is, we've seen what it can do. So when prices are this low, education, understanding the market and understanding the opportunities and kind of, you know, planning your trade and trading your plan is a good time to be kind of taking notes. And, you know, we say it all the time, right? We see it when everything's flying high and crypto's the bell of the ball. Our numbers are up, the live is a lot more crowded and the downloads are a lot more. We see it all the time. But, like, at this, at the same time, it's right now. So if you're listening now, you're kind of in the right spot because you're getting the education. You know, you're looking where other people aren't looking. And that. That's where the opportunity lies a lot of the time. Because the flip side to Sandex, Sandisk going up 17x was a year ago. Nobody, nobody was talking about it. They just thought it was, you know, a simple little card right here. I got one right here. Look at that. Yeah, that's Sandisk right there. That's. Everybody just thought you threw it in the cameras and that was it. That's all. That's all it was. And now it's a. Now. Now this, that was for digital cameras is the AI superstar bell of the ball. So nobody saw that coming a year ago. But that's, you know, there's a couple people that I guess called and made a bunch of money, but that's. That's what it's like when you're trying to find where the opportunity lies. You know, you want to be where other people aren't. So I think we're in the right spot.
- [31:35]
B
Yeah, no, I. I think you're right. I know we have a lot of things to talk about here today. TiVo should. Where should we move on to next? Should we just go?
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A
Yeah, let's. I Mean, it's kind of like the, it's why we think the market's struggling or not doing that. Well, let's, let's jump over, let's jump to. Because we talked about bitcoin, let's just jump into strategy. So strategy is really getting, really getting heated and I don't know, I, we've talked about this a lot. It's hard for me to take an opinion either side. I more find it fascinating to cover with all this stuff. But I think s, you know, the stretch is, is, is supposed to be at par. So stretch is one of the products for strategy that gives the dividend and it's, it's supposed to trade at, you know, 100 is par and it's at 82. So almost, you know, almost a 20% draw down there, 17% from its price target. So there's a lot of noise going on here. So what do you, what are you hearing? What are you reading? What are your thoughts?
- [32:31]
B
Well, I think it was about a week or two ago I had a little bit of a rant on here with you where I was just saying that why I'm not a fan of Stret, why I didn't like strc, why I think, you know, I was questioning some of the stuff that Saylor was doing and. Big fan of Saylor, not as big of a fan of some of the recent decisions. And just like there's a little bit of concern for me and especially how they pay a dividend that they know that they can't generate. The only way to do that is to sell off the assets that they have really, at least in their current, like in the current way that they operate. So I've been a little bit of a critic of this. The good news is it's bounced a little bit. I did see that its chart was bouncing off those lows. Cause you're right, it did go down to 82 bucks, which is crazy. Ended the day back up almost at 88ish. So a bit of a bounce. But you know, that's basically all time lows for stretch. This is something that's supposed to stay roughly around the 100 level. It does give me a little bit of fears as to what could happen. You know, are we going to need to, you know, raise the yield? Are they going to need to raise the yield or are they going to need to sell more bitcoin as a result of this? Is it going to cause panic selling? You know, one of the things I don't want to happen here and this isn't an apples to apples comparison. But what I don't want to happen here is a deep hag and panic sell event. Kind of like what we saw back in 2022 with Terra Luna. And I think, what was it, TUSD or whatever they had. I don't want to get a situation like that where it starts to de peg and everyone starts to panic. Now granted, different situation. If you look at like how their algorithmic stablecoin worked, it's, it's very different from how this would work. But I think the overall principle here of if you see more deep, maybe you get panic selling. If you get panic selling, could that lead into something else? Like I'm. Yeah, it. I think it raises a little bit of concern. Am I freaking out about it? No. You know, I've got no exposure to this. My just general thought here is I'm curious to see how they handle this. I don't know. I think a lot of our analysts over here, we've talked about it and I think that they have to lower the yield at some point, but if the price is going down, then I think they're expected to raise the yield. So I'm not sure what's going to happen with this. I was just going to say I think there's a healthy balance. There are posts out there like this that's like, oh my goodness, they're in their most dangerous phase yet. Imminent nuclear destruction strategy. And it's like, all right, well like let's not, let's not just fear monger. It's not that bad of doom and gloom. But I think that there is a re. There's a healthy balance. Again, there's a place to kind of take a stance and say, hey, there's, there's things that are probably not going according to plan here and maybe there's repercussions with that. And I think it's okay to kind of consider that and be prepared for that should it happen. But I don't think it needs to be this horrible situation. Again, my stance, I don't really want to touch it. I don't have strategy exposure. I don't have exposure. I clearly have bitcoin exposure, which is why I maybe get a little bit emotional about like when I'm talking about this as opposed to maybe a little bit more of an unbiased take because I know that even if the off chance of something happens here, I know it's going to affect my holdings in Bitcoin, which obviously we have a decent amount of over here. You know, we're called crypto 101. So I want the best for bitcoin. I just think that this adds leverage to the space and you know, God forbid something happens, that's the last thing we need is another unwind.
- [36:10]
A
Yeah. And watching this strategy morph from this buy and hold to the financial alchemy of building these products has been interesting to cover. But yeah, I think I said on here, I think it was with Brian I bought Stretch. This is like just a, just a schmeckle of fun for journalism purposes. I was like, let me see how this thing pays out. I just want to feel it, just a very, very like a gambling amount of, of you know, sports gambling amount. And then when it deep pegged I just like, I don't know, I kind of just like, okay, this is fun experiment. I got out and it went down lower and it made me like kind of think about the whole process. And I was, I kind of just think in a way he's trying to be so creative, but it's like it is at the end of the day, like it is a little bit of a shell game of like you're borrowing future returns to kind of create this financial alchemy. And I get it in a sense, but I think you're also making so much noise and you're doing it with so much money that you're almost putting a target on your back. And it's like, sure, you have this bitcoin community that's rallied around you for a long time, but now you're, you know, as you've grown and you've been, you've done more products, now you're changing your tune from like, well, I wouldn' my bitcoin and you shouldn't sell yours. But strategy can to do these products and, and maybe you're putting a little target on your back for like other hedge funds to, to kind of go and try and you know, I, I don't know if manipulates the mar is the right word, but you're going to try. You know, people might want to take the other side of the trade and, and they understand kind of where your break even point for your bitcoin trade is or they understand like, okay, maybe we can borrow some stretch and short that and make people panic. And you know, when you're doing all this financial alchemy, you know, there, there's two sides of a trade. Right. That's what makes a market. And maybe you're kind of opening yourself up for some enemies more than just Kind of laying out this perfect path to, to Valhalla, if you will.
- [38:07]
B
Yeah, no, I think you're right. And they just. Yeah, I mean they just got to be careful again, it's not like it's this imminent bomb, not yet, but I just want them to be careful with it. Don't want anything bad to happen to the, to the crypto space. So that's where all this conversation comes from. For the sake of time, I did just want to run us through what I thought were the six catalysts that are affecting the market. Because we looked at the technicals and this was catalyst number one. I think just strategy selling strc starting the deep peg to the downside to all time lows. Just the strategy angle is, is one of these TiVo so you have is strategy in trouble and people getting a little bit nervous over there with some of their decisions and some of the stuff that's happening. I think that's one of the catalysts affecting the market. I think the other one is one that we mentioned towards the beginning, which is just the, the Federal Reserve stuff, you know where they stand. Are we going to get hikes, some uncertainty? So that's a little bit of a catalyst as well. The other thing is not something that we've seen as much recently, but something that we've seen a lot in the past, which was big liquidation events. Again, something that we saw start of this year, end of last year, a lot less as of recently. Minus obviously we had a pretty big move down, which was some liquidations about a month ago. But beyond that, I think the other one here is the Clarity Act. Right. People want this to happen. There's not a ton of, of progress. There's rumors that It'll happen around July 4th. We'll see. It feels like it keeps getting pushed back. Obviously JP Morgan, Jamie Dimon have been fighting for the way that they want it. Brian Armstrong's been fighting for the way that he wants it. This has kind of caused a stalemate. And so no Clarity act has been kind of cattle's number four here. And then the final two that we'll talk about is that I think AI and these big IPOs are probably sucking liquidity out of the market and money's just going in the different areas and playing the volatility. When you have something as large as SpaceX, which IPOs at, you know, 130 bucks or whatever it was, and then almost doubles within the first two or three days of trading and that's a, what, $2 trillion stock?
- [40:20]
A
Yoda was the top 10 company by market cap on day one. It's insane.
- [40:25]
B
And and like if you can get that level of volatility with a name that large like that is sucking so much liquidity out of other areas. And then the final catalyst six which we can I think you actually already threw the chart up of which is ETF outflows. We've seen a decent amount of ETF outflows. This post says it really well. But both us spot Bitcoin and Ethereum ETFs have been facing persistent outflow since May 7th. You can kind of see that on the chart on the left hand side of the screen. But since then you've seen around $6.2 billion in net outflows on Bitcoin, while Ethereum seen almost 1 billion in outflows. So pretty consistent outflows happening here in the last almost what, month and a half, two months? Ish. And that's also been something that's that's affecting the market.
- [41:20]
C
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- [43:17]
A
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- [43:34]
A
Call 1-800-GRAINGER click grainger.com or just stop by Grainger for the ones who get it. It's a great point and to kind of transition us into the Fed, we had the first Fed meeting with Kevin Warsh, our new Fed chair, and I thought it was really interesting because the markets were definitely digesting it. And I pulled up this tweet here of kind of like the top, the top points he made. The one thing that I wanted to point out and something that we'll continue to cover as, you know, new data or new meetings come out, new notes, was this is a Fed that is, is going to change things up. Which is really interesting because again, the Fed is an appointed position, but it's something that, you know, we've lived with. You know, I think it's what, been six, eight years? So it's like through Covid, through this crazy inflation era and now there's a change. And I think one of the coolest things is, or the one, I don't know if cool is the right word, but one of the most interesting things that we've talked about on this show was, hey, the Fed's always using like backwards data. It's like, you know, the cpi. The cpi, it's a month old and the weightings are off. It's, you know, whether it's gas, oil versus housing, it's like the weightings are off. And I think the most interesting thing that Kevin said yesterday was that they're going to be changing kind of the way that they're digesting inflation, which I think is really, really interesting. They want to be forward looking. So kind of adding a new process is something really interesting. He mentioned how he watches the stock market is a huge gauge. So I wonder if, if we're all being honest and especially with the war and oil, it's okay. Inflation's rising and so you get all these, you know, all the other Fed governors give you these dot plots and it's kind of like people are leaning towards a hike from what they see now, will that happen? I don't know. The market is pricing in a hike. I don't think it's to the point now where it's so crazy, especially with the new Fed chair, that you don't know what, what's going to happen. But I think they're a little bit more data, they're going to be very, very forward data dependent. And so because he watches the market so much, maybe he would do instead of even just a real hike, he might like jawbone a little bit more like talk, quote, unquote, talk the market down if it got a little ahead of itself. But the market was digesting all this verbiage. So he spoke, then the market sold off and then it bounced back yesterday. So I thought, I thought it was really interesting. It wasn't a negative or a positive. I think it's just there's a digestion period for this new verbiage.
- [46:00]
B
I'm, I think this is so needed. I think that the Fed needed to change up how they look at data and what data they look at. And I'm excited to see this. I, I couldn't agree more. This is overdue. The way that they look at stuff is so outdated. He's talked about maybe using truflation metrics to look at like over a thousand or ten thousand different things and to get a better understanding of, of what's going on. And I think he's looking at it the right way. Like the way that they did things before, I think was frustrating to people and it didn't felt like it gave people a proper image of what's going on. I know for what it was at last year, TiVo, we would laugh about it because we'd look at these reports and be like, oh, inflation's high because of like auto insurance or something crazy. And that was like a, a big keeping moment. It was like, well, inflation is actually doing pretty well when you factor out some of these like stupid causes that were contributing to it. And when you look at true inflation, it hasn't been as bad as I think people expect. Again, you have these few volatile areas, but that's exactly what they are. You know, they're volatile, they go up, they go down. You see that a lot in food and energy and maybe some other areas. But I'm excited, man. I think is, you know, again, this is not a political thing. Obviously the Fed shouldn't ever even be a political thing. So I hate that I even have to say that because people just think that now. But I, I think that regardless of that, if you're looking at it from like an economic standpoint, the Fed needs to be updated. They need to have some of these changes. I think it's for, for the better and. No, we'll see what those are, right? We don't know quite yet.
- [47:40]
A
But yeah, it'll be interesting to cover. It'll be interesting to cover for our show and just the markets in general as we move forward into the rest of the year. And, and you kind of said that the old way of doing it was stupid. And, you know, it's, it's just one of those things that need to be. Needs to be updated as the world grows. But you know what is stupid, Brendan? The Illinois tax that they just signed. Oh, my God. It's the most aggressive crypto tax we've seen. Nothing comparable to stocks, bonds or anything. It's a, it's starting in 2027, the state's going to impose a 0.2, so a 0.2 tax on the gross value of digital assets. Exchange, transferred or stored for customers. If you buy Bitcoin, you're taxed. If you transfer Bitcoin, your tax, hold it with a custodian, your tax. No profit required, no capital gain, just moving it triggers the tax. So an example of this would be moving $1 million through a bank or a brokerage. Nothing happens, but if you move that same $1 million as a digital asset, the state's gonna take $2,000 from you. This sends a lot loud message. We don't like digital assets. If you have a company there, we don't want you here. Again, it is, I guess, small in a way, but it seems it's definitely picking. It's picking on, on the digital asset community. So this is, I don't know if it's a big deal for overall, like, for the industry. I just feel like if you live or in Illinois or if you buy, if you're growing, if you're trying to grow like a digital asset business, this feels pretty wild.
- [49:18]
B
Yeah, well, yeah, I mean, especially if you're transacting a lot, you're going to be. It doesn't sound a lot if you're just holding, but if you're actually trading and transacting a lot and you're getting taxed 0.2% for every single time you do that, it adds up, I mean, pretty freaking fast. I, I'm no legal expert to you, though. I would be shocked if that's not contested in court. I have a feeling that hacks it depends on obviously how is crypto classified, which guess what the Clarity act should help with. But we probably don't have an answer to this. But depending on how it's being classified as I'm not sure that that's. Maybe it is legal again, I don't know. I'm not a legal expert. I would be shocked if someone doesn't contest that in court. But maybe they need the Clarity act to be finished before they even do that. Because maybe there's not clarity as to how this stuff, this stuff should even be done. But weird. And you're right, I think it does send a message and anyone that is there and like script though will. They'll probably have to move.
- [50:22]
C
It'll be hard.
- [50:22]
A
Brian Armstrong says the law is bad, obviously. And Coinbase has 1.5 million customers, aka voters in Illinois. So Brian Armstrong saying, hey, the Boston Tea Party did a revolution over taxing the tea. So what, what are you going to do over there in Illinois about your, your crypto? It'll be interesting to follow that one. Agreeable. It gets contested in court. But all the more reason why we need the Clarity act, right? To give us some rules of the road. We had a Coinbase update here. Again, Coinbase just kind of transitioning to try to be that all in one brokerage. Right. I mean starts with crypto and then, you know, adding tokenized stocks. The tokenized stocks, Brian was saying, Brian Armstrong was saying, you know, a true one to one, you're getting your one share of real stock. For tokenized stock, you're getting the dividends. Yeah, I mean they're just trying to go into the all in one brokerage with all these offerings.
- [51:21]
B
Yeah, they're getting pretty aggressive with it. I mean lots of things right? Pre IPO perps, tokenized stocks, stock options, crypto options, perpetual contracts for indices. I mean the list goes on here. You're right, they're trying to become a bit of an all in one player. But I think they have to be because you have all the traditional financial institutions and brokerages which are allowing crypto trading. So if they're going to allow crypto trading, then that's just a one way street that's taking market share. So I think they have to say, no, let's make this a two way street. If you're going to steal our market share, we're going to come after yours. We'll see how it works out. I like that they're being pretty forward looking about this and trying to Integrate, you know, new and developing technologies. So you know, they talk about agents and AI and other things in here as well. But yeah, big updates.
- [52:11]
A
Yeah, it's, I mean it's a huge race, right? You have the old guards and then the new ones being, you know, I think Interactive Brokers is kind of new. You got public. I'm trying to get the public CEO to come on. Hopefully that can happen this summer. Robinhood obviously and Coinbase kind of all just trying to position themselves within the old guards lanes and there's a lot of innovation going on so it'll be interesting to keep, keep track with that. Let's end on some good news. Any questions in the comments before we wrap up? Now's the time to toss them in there. But Brent and I have two, two good news. We're leave on some good news. Eth, the supply, the staking rate keeps breaking new all time highs. Meaning yes, there's been a lot of selling in eth, but the people that are holding are staking which means they wanna, they wanna hold for a fair amount of time and collect that yield. It's now over 32%.
- [53:02]
B
Yeah, this is putting it at all time highs here, which is a good thing to see. Right. Eat staking rate continues. What does this mean? Well, this basically means that people are positioning themselves for the long term when you stake eth. It's not like a little short term thing, but it's people saying hey, we're positioning for the long term. They're not interested in selling, they're interested in holding. Typically when you see ETH get, you know, when you get this lower it might mean hey, people are taking it out because maybe they want to transact in it, maybe they want to sell some. But no, you're seeing people positioned for the long term here as almost a third of all ETH is being staked. Which is a cool thing to see.
- [53:41]
A
Absolutely. And then we got some Morgan Stanley, some amendments for their Solana and Ethereum etf. So again Morgan Stanley really leaning into the crypto ETF game. And traditionally Morgan Stanley doesn't have a ton of ETFs so I, we kind of talked about this when the Bitcoin one went live. We had a lot of great stats around it, but just Morgan Stanley's not really in the ETF game. And so that means that they're doing this because they want to give it to their clients. Clearly they don't want to recommend crypto exposure and then have to go buy the BlackRock ETF or any other ETFs that are out there, they want to create their own, but they're also not in the ETF game. You don't see them filing left and right on ETFs and memory and this and that. So the fact that they're picking some cryptos here kind of leans into that. You know, hey, these financial advisors are sitting down with all generations of people and saying, hey, maybe 1 to 3 to 5%, depending on your risk tolerance, is what we should allocate to this industry. So again, price action, volatility from week to week, month to month, and even sometimes year to year, you get caught up in it. But I think there's a bigger. There's a bigger game at play, which we've been kind of pitching throughout our lifetime on this show and our program and our community and stuff like this is what really hammers at home for me is like, hey, I don't really think this industry is going anywhere. Even though you have the high of the highs and you get in the low, the lows, you know, this thing's on a track that. That kind of just keeps chugging along.
- [55:14]
B
Yeah, exactly. You know, there's more ETFs coming out. You have new groups that are launching them. Typically, I know we. We were talking earlier about the outflows that are happening, but typically, again, ETFs do bring net inflows over the long term for the most part. But yeah, time will tell. I think overall, this is a plus, right? You know, if more people can get access to it, more people can buy the dip on it. More people can own them. So excited to see this from a pretty large name.
- [55:43]
A
Yeah. And then thanks to everybody in the chat, we got Bandit. The Bandit was back. Good to see the Bandit. Matt Beaver saying thanks as well. Thank you, Matt. And then MW saying, does the podcast have a regular airtime?
- [55:55]
B
Not.
- [55:55]
A
Not too quiet. I know we always publish something on Tuesday, whether it's an interview or a rundown, but because we're so busy inside the community. But we also want to get you guys as much content as we can. We have to kind of be fluid with the. The rundown. Sometimes we try to do one most Fridays, I think live. And. And I need to be better. But I'll. In the community tab of YouTube, I will try and post when we're going live. But you know what you can do? Subscribe and hit the bell. So there's a bell notification when you subscribe, a little arrow. So click that, hit the notification tab. So that'll get you notified when we post a new episode every week and we try to do between two and and three episodes a week. So if you guys enjoyed this on this Friday morning, a little coffee and crypto with me and Brendan. Please give this video a thumbs up, send it to a friend, and if you're not subscribed, we really appreciate everybody tuning in and we hope you have a great weekend and we'll talk to everybody next week. But that's all for now. Bye bye everybody.
- [57:03]
C
Granger knows when you're a procurement manager for an office park, you're not managing
- [57:07]
A
one building, you're managing all of them. And to stay ahead, you need to see through one walls and around corners, lights about to fail, filters ready to clog H Vac on its last leg.
- [57:17]
C
If you wait until something breaks, you're already behind.
- [57:21]
A
Count on Grainger for quality products, easy reordering and 24.
- [57:24]
C
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- [57:25]
A
Call 1-800-GRAINGER click grainger.com or just stop by Grainger for the ones who get it done.