Podcast Summary: The Wolf Of All Streets

Ep: $117K Bitcoin! Are Fed Cuts The Catalyst For A Massive Breakout?

Host: Scott Melker

Guests: Santiago Santos (CEO, Inversion), Chris (Texas West Capital)

Date: September 17, 2025

Episode Overview

This episode explores the explosive rise of Bitcoin to $117,000, discussing the backdrop of the U.S. Federal Reserve’s highly-anticipated rate cut (25 basis points). Scott Melker and guests Santiago Santos and Chris dive into the implications of Fed policy for crypto, the intersection of macroeconomic forces and digital assets, the risks and structure of “Bitcoin treasury companies,” and the future of on-chain private equity. The episode is rich with trading insights, skepticism about new financial constructs, and thoughtful analysis of market sentiment as the bull run continues.

Major Themes and Discussion Points

1. Fed Rate Cut: Macro Impact on Bitcoin and Markets

• Bitcoin’s Surge & Rate Cut Hype

  • Bitcoin hits $117,000 as markets brace for a 25 bps Fed rate cut.
  • Market anticipation is universal; the cut itself is "100% priced in."
  • Ongoing debate: Is the cut the next bull run catalyst, or is a top forming?

• Macro/Micro Dynamics

  • Santi: "It's almost impossible not to think about crypto in the lens of monetary policy…rates and Fed policy really matter because at the end of the day, crypto is a risk on asset class." [01:55]
  • Historical precedent: Whenever the Fed cuts rates within 2% of S&P all-time highs, stocks have finished higher over subsequent 12 months (20/20 times) [02:33].

• Uncertainty & Sentiment

  • Scott: “If he did 50 [bps], the market would panic because it would be like Powell signaling something was more broken than the market anticipates.” [02:46]
  • Santi: Predicts Powell will remain ambiguous, refusing to signal a clear direction on further rate cuts ("data dependent" messaging) [05:17].
  • “The first reaction is usually wrong… if gun to my head I would say the market would be a short today.” – Scott [06:09]

2. Market Risks: Bubble Metrics & Hype Cycles

• Overheating Economy & Bad Data

  • US economy running hot (Atlanta Fed: 3.4% Q3 GDP).
  • Yet, troubling metrics:
    • Stock market valuation at all-time highs (exceeding dot-com/Great Depression run-up)
    • Bank securities unrealized losses at $395B
    • Housing unaffordability, surging student loan delinquencies
    • "Everything's good, but when you lift up the hood, it's pretty ugly out there." – Scott [07:00]

• Tech-heavy Markets & the "Magnificent Seven"

  • Nvidia’s centrality to both AI and market structure: “Jensen Huang might be equally as important as Jerome Powell these days, you know.” – Scott [03:51]
  • Onerous concentration in tech brings dot-com era comparisons, risk of investor overexposure [04:08].

• AI Spending Hype

  • Santi: Questions sustainability—"Market will lose patience if AI capex doesn’t show up as improved profitability soon." [09:27]
  • Example: Companies spend billions hoping for transformation; market reacted negatively when Deepseek’s budget was revealed as much lower than peers [09:24].

3. Bitcoin Treasury Companies and ETFs: Risks & Rewards

• Rise of "Bitcoin Treasury Companies"

  • Trend reminiscent of SPAC/SPV mania—widely marketed, high risk in structure.
  • Scott: “I said, this is the next bubble…not that it would kill bitcoin, but bad for the shareholders.” [10:01]

• Structural Warnings

  • Santi: Most treasury companies/DATs (Decentralized Autonomous Trusts) lack MicroStrategy’s unique advantage, have poor structure, or are built around illiquid/locked tokens:
    • “Brother in Christ, don’t overthink it…Keep it clean, buy the ETF or buy spot and chill, go do something else.” [13:05]
  • MicroStrategy has set a ceiling on how much premium is justifiable versus NAV [13:20].

• Premiums, Discounts, and "Leverage" Attraction

  • Scott: “MicroStrategy owns 600+K Bitcoin, trades at a 1.4 premium to NAV—don’t buy anything higher.” [13:20]
  • Cyclical nature means investor behavior (retail chasing returns) may be punished brutally in a bear market [15:29].
  • “The closer you are to the end of the cycle, the less exposure you want to have to financial engineering…they unwind in an ugly way.” – Santi [16:20]
  • Example: GBTC traded at a 50% discount to its NAV at one point [16:33].

• Select Winners & Unicorns

  • Santi and Scott agree that MicroStrategy and unique regional plays (MetaPlanet in Japan) are exceptions, not the rule [18:40].

4. On-Chain Private Equity: Santiago’s Vision

• Inversion’s Mission

  • Building private equity on-chain by acquiring real "unsexy" traditional businesses and improving efficiency via stablecoin/payments rails [19:49-22:45].
  • "The technology has come a long way...Traditional businesses can be made vastly more efficient with this technology." – Santi [19:49]

• Real-World Impact & Efficiency

  • Example: Swapping out traditional payment rails for stablecoins can take operating margins from 5% to 7-9%—a 20-40% profitability boost [22:58].
  • “If we do this right, the industry will grow orders of magnitude...” [25:18]
  • The mission is to onboard hundreds of millions by making the crypto rails invisible to end users (they use stablecoins/Crypto in the background, not up front) [25:49].

5. Investment Advice & Trading Philosophy

• Don’t Overthink It

  • Scott: "If we all believe in bitcoin, companies that make money should just buy some and call it a day. Just like we should as individuals." [28:20]
  • Santi: “Don’t overthink it.” [28:42]

• Trading Around Fed Events

  • Chris: Most retail traders lose money trying to position for big news; best to stay out or reduce size during event volatility [30:45].
  • “Often the first move is the fake out…let things happen.” [32:11]
  • Bitcoin breaking above $117,440 signals new all-time highs are likely; any near-term pullback is likely a setup for further upside [32:34-35:35].

• General Market Outlook

  • Trading setups shared for Giga, Arrow, FLR tokens—most look constructive, reflecting belief the macro uptrend is intact [39:07-43:02].
  • “Whatever happens today, knee jerk reaction ultimately isn’t going to change the overall trend.” – Chris [41:04]

Notable Quotes & Moments

• The Reality of Crypto’s Reflexivity:

  • Santi: "I want to get to a state where these blockchain systems are working and humming on the background, and it's totally uncorrelated and independent from crypto asset prices..." [26:24]

• On the Nature of Bull Cycles:

  • Scott: “I was pitched like 25 of these things within the first two hours of walking in the door. And I said, this is the next bubble, right?” [10:01]

• On the End Game for Bitcoin:

  • Scott: “Take some of your money, buy bitcoin, hold it for a really long time, it'll improve your life, it'll improve your portfolio and that's it.” [28:20]

• On the Power of Simple Tech Improvements:

  • Santi: “If you use a stablecoin, you understand that it is vastly better than a wire transfer.” [20:35]

Key Timestamps

• [01:55] – Macro policy vs. crypto: correlation of Bitcoin and global liquidity
• [03:50] – The impact of AI/growth tech (Nvidia) on markets
• [05:17] – Expected Fed messaging: “Ambiguous, data-dependent”
• [06:09] – Market already priced in, risk of “sell the news” on rate cut
• [07:00] – Valuations, recession risk, and unhealthy market undercurrents
• [09:24] – Will market lose patience with AI hype?
• [10:01] – Rise of “bitcoin treasury companies” and bubble warnings
• [13:05] – “Just buy the ETF or buy spot and chill” – Santi
• [16:20] – The risk of holding complex vehicles late in the cycle
• [19:49] – Santi’s on-chain private equity vision
• [22:58] – Real-world profit gains from stablecoin adoption
• [26:24] – Vision for blockchain as invisible infrastructure
• [30:45] – Chris: Why not to trade big around Fed events
• [32:34] – Scenario analysis for various Fed decision outcomes
• [39:07] – Live trading ideas: Giga, Arrow, FLR

Final Takeaways

• The Bitcoin rally is heavily intertwined with macro policy, with the 25 bps cut widely anticipated—next moves depend on Fed guidance.
• Most new crypto-derivative investment vehicles are structurally riskier than they appear; favor simplicity and transparency.
• Patience, long-term vision, and not overleveraging to news events are key to survival.
• The future lies in leveraging crypto rails to make real-world businesses radically more efficient, onboarding millions without them ever knowing they’re using blockchain.

Where to Find the Guests

• Santiago Santos: @SantiagoRoel or @inversion_cap (Twitter/X) | Co-host: Empire podcast
• Chris (Texas West Capital): @TXWestCapital (Twitter/X) | members.texaswestcapital.com

For Reference

• “Don’t overthink it. Buy Bitcoin, hold, relax.”
• The Fed cut is the headline—watch the subtext and market reaction closely.
• Be wary of complexity and crowding at cycle tops; focus on long-term fundamentals.