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The Wolf Of All Streets
Arthur Hayes: Bitcoin Will Crash Before It Skyrockets To $250K!
00:36:33
Arthur Hayes: Bitcoin Will Crash Before It Skyrockets To $250K!
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- [00:00]
A
I'm Scott Melker, host of the Wolf of Allstreets podcast, here with Arthur Hayes, CIO of Maelstrom, to talk about the crypto market, politics and everything that's driving prices right now. You set the world on fire once again with some price predictions, right, we got 250,000 by the end of the cycle, but we got to go to 70s first, right?
- [00:22]
B
At least my prediction could be wrong. I hope I'm wrong.
- [00:26]
A
I hope you're right about the 250, maybe wrong about the 75. But that said, with a, with a long timeframe in mind, who wouldn't want to buy Bitcoin at 75,000 if it's headed to 250?
- [00:38]
B
Yeah, for sure.
- [00:40]
A
So what's the premise? Why do you think that we were likely headed down before we see the cycle kick in and head to the bull market highs?
- [00:49]
B
So I released an essay about two days ago and if you want to read a 5,000 page description of what I'm going to describe in 15 minutes, go right ahead. It's a little bit more detailed, but, but essentially my premise is that post the Trump election in the United States, bitcoin has traded ahead of the fundamentals in terms of global liquidity. So Trump gets elected, he has this whole platform of how he's going to, you know, make America great again, print a bunch of money, get companies to invest in America, productive capacity, do lots of things in the crypto space, tax space, everything. It's going to be amazing in Trump world and everybody else around the world to compete with America is going to have to print money as well to help their own domestic industries like in China and all those other countries. And unfortunately it seems like the liquidity situation is disappointing. So moving over to the U.S. obviously the 10 year treasury has been on a tear, well priced down, yield up since the Fed started cutting rates in September of last year. And if you'll remember, it was quite interesting that the Fed started cutting rates right in the fall, right before an election cycle, probably to help Harris win. Obviously she didn't. As soon as Trump gets elected, Powell's like, oh, I'm not resigning. There's been various former Fed governors, William Dudley, to be specific, who wrote a very provocative op ed in Bloomberg a few years ago saying how the Fed should actively use its power of influencing quantity of money and price to make sure that Donald Trump doesn't get elected. And he was the president of the New York Fed, the most powerful Fed, Governor Barr, the chairperson for many years. So he definitely still has some influence. And at a recent press conference in November, right after the Trump election, Powell was asked, oh, has anything changed because of the election? And he stated that, oh, we're looking at some new super secret economic variables that might influence the trajectory of our path. Which is code words of saying, oh, well, maybe we slow down, maybe we start raising rates because of the election. So I think as much as Powell tries to play the I'm not a political person game, he's very political. Him and Trump don't like each other. Trump obviously is lambasting him over Bloomberg and the news wire saying, cut the money. I need cheap money and lots of money to revitalize American industry. And Powell saying, oh no, I'm here to fight inflation. So obviously inflation is still above their target. So if they were going strictly by their own self imposed measures, they shouldn't be cutting rates at all and raising them. On the other hand, you have a federal deficit that's exploding higher. And I know people like to cite the Department of Government Efficiency, the Meme Department. That isn't a department at all. It's literally just an advisory position that Trump created for his boy Elon. An actual department requires U.S. congressional approval and that hasn't happened yet. Not to say it won't, but Doge is literally just an advisory body. It has no power. Yes, Elon can memeify profiling government spending as much as he wants, but that's not new news. I don't think politicians particularly care. And if you're going to get reelected in 2026, are you going to go against your seniors and the defense industry and cut their spending, which is the major, you know, 70% of government spending in the US is healthcare and defense. Those aren't getting cut, in my opinion. So, you know, the deficit isn't going anywhere. You have an antagonistic Fed, you have a Treasury maturity profile that's completely fucked up because the US has to roll over something like $6 trillion of short term debt at higher rates this year because Yellen wanted to juice the markets for Biden and Harris during their term. And so you have all this coming together and you have a debt ceiling issue where whether it's today or tomorrow, I don't know when the day is. The US Government cannot net issue any new debt to fund the government. And so Trump has a choice, I believe he can either have a crisis happen today or in the near future, three to six months. In terms of an antagonistic Fed, a Treasury maturity profile that is not commensurate with affordability for the government and its programs and the inability of the banking system to buy more of this debt. And the trigger for sort of a little mini financial crisis could be okay. I'm not going to tell Besant, the new U.S. treasury secretary, that he should not run down the checking account of the government to help forestall the government shutdown. Let's have this debt ceiling fight today. Every time there's a debt ceiling fight, everyone gets all up in arms. People get afraid that the US Government's not going to pay out on its bonds. It's ridiculous. Of course they're going to raise it. It's just a political game. And it depends on which particular congressperson or senator gets their piece of pork for their district. And so once they work all that stuff out, it'll get raised. The question is, what happens in the interim? Do we get a liquidity flush out? Get the Fed seeing religion again? You need to print money. You need to allow the banks to put as many Treasuries on their balance sheet as possible to help Trump invest and enact their campaign promises. Stop being an asshole. The financial system, Pax Americana, the empire was going to crumble unless you give us the free money. So that's sort of my premise on the American side of things, of why I think it's politically expedient for Trump to have the bad thing happen right now when he can blame it on Biden and Harris. Why have it happened in six months time, earlier than your problem?
- [06:38]
A
No question. If there's going to be a recession, a correction, whatever it is, the earlier in the presidency the better, because obviously it'll be long forgotten by the time people are casting votes. So basically, though, the premise here is that Bitcoin will dip as a function of stock market correcting and everything else that's happening in the macro situation. I mean, we haven't had a meaningful stock market correction as long as I can remember. So if that doesn't happen, you would assume that Bitcoin would continue up. This also sort of speaks to a conversation about that you alluded to, which is that the Fed cut rates and rates and interest rates ended up rising, which means obviously the market is saying that the Fed was wrong, they shouldn't have probably cut in the first place if unemployment was low and the stock market was at record highs. So are they trapped? And does what the Fed do matter as much anymore? Or is it really about bessant in the treasury now? Are we in a period of fiscal domination here where it's really about the Debt ceiling and bonds.
- [07:38]
B
I think, yeah, the Fed is absolutely trapped, but they still have some operational things they can do to make it better. The biggest thing, and if you've been reading the mainstream financial press, you've seen let's talk about a supplemental leverage ratio and Basel 3, which is basically, hey, the US caused this financial crisis in 2008 because the banks are a bunch of idiots, maybe criminals, whatever. And the global banking regulators got together and said, okay, let's have the banks put more capital on their balance sheet against the things that they buy. That kind of makes a little bit of sense. However, when you have the federal deficit marketable treasury debt has almost doubled in the last five years. The banks can no longer warehouse as much of this debt as they used to. They can't facilitate the operations of a Treasury market at almost $40 trillion of public marketable debt. What they need is the ability to buy Treasuries with infinite leverage, which they can do if the SLR exemption is granted, and this is granted during COVID for a year and the banks were able to Hoover up a bunch of Treasuries. They obviously got fucked because then Powell raised rates and a bunch of them went bankrupt and they had to enact the bank term funding program. But in any case, this is a completely unilateral Fed decision. They can decide to suspend this particular provision of Basel III and the banks can buy as many Treasuries as they want with infinite leverage and presto, you have a buyer with infinite resources to fund Besant and Trump's plans. It literally is just a decision by the Fed. The Fed can also stop quantitative tightening, which is also constraining banks balance sheets and the amount of Treasuries that they can hold and it can restart quantitative easing. These are all things that the banking system is calling for. They release a quarterly report to the treasury called the Treasury Borrower Advisory Committee. Report comes out, the next one comes out in early February and they hammer home the points of all these things that I'm saying. Our balance sheets are full. We can't buy Treasuries. We can't help you deal with all these government programs. Please change these minutiae in the banking regulations so that we can perform our function and make America great again. But again, this is all up to the Fed. And I think he, Trump needs to bring Powell on side with a little bit of crisis.
- [09:59]
A
In other words, the Fed needs cover to cut and that cover comes with a stock market correction and Bitcoin flying down into the 70,000 I mean, they care about, say, hey, we had to cut, man, we got our correction. Unemployment will go tick up magically a couple, you know, a couple basis points before they, you know, revise that data three months and don't tell you about it. And we get our cuts, right?
- [10:22]
B
Basically, yeah.
- [10:23]
A
So it's all about liquidity. I mean, the bottom line of that entire thing is that bitcoin, in your opinion, is trading based on global liquidity or certainly what's happening with the, with the Fed and the treasury in the United States and how much free money is in the system?
- [10:37]
B
Yeah, and I guess, and I also would add that China was supposedly reflating their economy, is going to be printing trillions of yuan to help their property market and asset markets as well, were going to allow their currency to weaken. That's what happened from September of last year up until early January this year. And for whatever reason, there's lots of speculation as to why, I don't know why Xi Jinping put the stops on that. The PBOC is no longer injecting buying government bonds, and they now are strengthening the currency, which is negative for fiat liquidity globally. So they give the number two, or number one largest emitter of fiat liquidity stopping in his tracks before they negotiate with Trump in terms of what the economic situation between us and China is going to look like. And then the last piece would be the bank of Japan has raised rates 25 basis points at their religious meeting last week. Again, yen is the premier funding currency of all financial assets. And so if you raise the price of yen money and the currency appreciates, people have to sell stuff. What do they sell? They sell us tech stocks and they sell us Treasuries. So the largest three economic blocks in countries with regards to fiat liquidity are all either slowing down the pace of addition of liquidity, raising, raising the price of money, or outright contracting the amount of money in circulation. So I think for a very short period of time, we have a perfect storm of, okay, Bitcoin went from 70,000 to 110 in two and a half months based on Trump. Maybe he delivers these things in the back end. But right now, where is the money? And so that's why I think that we can have a meaningful correction, shake out some people, cause people to not believe in this bull market. And then that's when we get the free money, the printed money. Money printed go burr and we resume the bull market and go much higher.
- [12:31]
A
Yeah, I continued saying leading up to the election that bitcoin was basically priced to perfection for Trump to deliver every single thing that he had promised and that any delay on those or any strange wording in the bills, which we've seen, right, an executive order that many expected would be a bitcoin strategic reserve ended up being a digital asset stockpile which set the world on fire because it's purposely vague, I think. So now we need to see these promises coming through for bitcoin to continue up, I think in the short term or to see a catalyst. So on the flip side, I heard an interesting take from Jeff park at Bitwise in a conversation I had with him this morning. We were talking about Deep Seek and the situation with AI. Obviously we saw this knee jerk reaction in United States stock market when Deep Seq apparently developed a better AI model for $6 million than we did for hundreds of billions of dollars. It was an interesting take though. He said that effectively he thought that China was exporting their deflation to the United States and that that could become largely problematic for us. I mean, what do you think of that premise in the context of Xi Jinping not coming through with all of the liquidity, as you discussed? Do you think that potentially having this sort of deflationary technology coming and the repricing of our tech, could that be the catalyst that sort of starts this Correction?
- [13:49]
B
I think Deepsea came out on the 20th of January. I didn't really hear anything about it until this weekend. You hear all the essays, people start freaking out and then you get Nvidia down 17% on Monday, people in turmoil. And so I think the. And obviously there's two camps. There's one camp that says, oh, this is just fake China shit, just China just doing China things. It's fake propaganda, blah blah blah. And to counter that, I listened to an interesting short webinar yesterday from Gov called Research. They're out of Hong Kong, very good China research team. And one of the partners made a very interesting point. When China does propaganda and sort of corporate sort of unreals, it's usually the Tencents, Alibabas, Baidu's the standard guys who receive lots of government funding or it's the university to Tsinghua or somewhere like that. The premier Chinese research institutions who receive again lots of money to research this kind of stuff. Or it'd be sort of a local government funded startup that's, you know, either doing, trying to build new chips or something else. But Deep Seq was created by a hedge fund bro in Hangzhou and I don't know, obviously most of your listeners are from America. I've lived half my life in greater China. The Chinese government does not like hedge funds and they don't like financial markets to the extent that it impinges on their ability to have social harmony amongst the rest of the people. So Xi Jinping or those in the Chinese Communist Party would not pick a bunch of hedge fund guys as the conduit for how they're going to develop the AI that's going to defeat America. So I take this, take that as a granted. I think it's legit. I think they actually did build this thing very, very cheaply. They didn't have a lot of government support because they're not the type of people who would get government support. Now I'm sure now they're going to get lots of support once they've done it, but that's not the point. And so if you think about it, whether it's five or even if they did it for $100 million is still so much less than the hundreds of billions that Microsoft and all these sorts of companies have spent on nuclear reactors, natural gas, power plants. You have Miyoshi sun and all these guys putting up half a trillion into Stargate. So Even if you 10x or 100x the amount of money that it costs them to build this model, it still completely destroys this narrative that the more you spend, the better your AI is. And therefore because we have the most capital, then we will have the best AI. So I think that's the mental thing that people are wrestling with. And so if you say, oh, this is just fake China shit, then why Is Nvidia down 17%? Obviously people already had this inkling of a thought in their mind, which is, hey, should I be buying this company at like 10 to 20 times earnings? They have a 90% profit margin. Even if, how normal is that? Surely in any industry in the world that shit doesn't last, even if China is lying through their teeth or whoever the deep sea Finder is. So I think that people already know the answer to the question, which is if it's not China, it's somebody else. They were questioning the if I spend more, I get a better product. And I know a lot of people been throwing out Jovan's paradox, which is use more of the resource as it becomes cheaper. But that doesn't mean that a tech company gets to have a 90% gross profit margin. So I think people are confusing their metaphors here. And I think this is sort of a wake up call for why do I own these really, really expensive Stocks in this really, really expensive country market the United States. Maybe I should diversify. And what you saw on the wipeout on Monday was something like 300 companies in the S and P were up on the day. Small cap, mid cap companies, which is this rotation from, okay, big tech, which has these sub, you know, really abnormal profit margins in all these little companies that are kind of fucked. Well, maybe the little guy, whether it's Chinese or American or European, whatever, has a chance now if I don't need to spend, you know, $100 billion to build AI, I could spend 5 million. I can use, you know, Deep SEQ or another variant of this open source model because they open source the weights and all these other things. And so I think that that's going to cause a. We're just at the beginning of this. If this is really a thing, it's not over in one day. It sort of percolates in people's minds. You have them cope harder on. Oh no, it's just China shit. Oh no. Yeah, they'll just order more chips. Jovan's paradox, that's just coping. I think we start trading down. I think this could be a catalyst for a mental shift in terms of how people think about open source versus closed source, big tech versus value stocks and start this rotation into a different sort of company that's being successful whether it's in the United States or abroad.
- [18:48]
A
We've had this situation quite a few times actually with people sort of positing that if Nvidia got a correction, it would crash the entire market because of its size. But actually, as you sort of alluded to the last few times, we've gotten those 10% plus sort of overnight corrections on Nvidia, that money's just flowed elsewhere. It hasn't left the market right the first time a few months ago, then we saw, I believe Meta and Amazon and Alphabet make new all time highs sort of as a rotation. But now we've multiple times seen that rotation into smaller companies like the Russell and What you said, 300 of those companies being up on the day kind of echoes the crypto cycle where you tend to see Bitcoin make a move and then some of the liquidity flows into altcoins. But it hasn't happened as much yet this time. So I do want to talk about the crypto cycle. We talked about Bitcoin going 75 and then rising to 250. But what we haven't seen yet is, is a meaningful rotation from Bitcoin liquidity down into Ethereum which we would have seen in previous cycles. We've certainly seen Solana do relatively well and we've seen meme coins do well. We have sort of a bitcoin meme coin barbell and everything with utility in the middle getting sort of liquidated into Trump Coin. Right. So I mean, what do you make of where we stand in the cycle? What will be the winners? You know, if we do see Bitcoin at 250, what altcoins, if not all of them are going to outperform.
- [20:08]
B
So I think meme coins are a thing. My next paper is going to be all about why I think the Trump political meme coins, the start of a whole sort of asset class of politicians around the world using meme coins as a way to gain engagement, campaign finance, all those sorts of things. And the, the best thing about meme coins is you don't need to know anything about finance to trade them. It's literally, do I know who this person is? Do I think more people will know who this person is in the future? And if yes, I buy it. If no, then I don't buy it. Right. That's all you need to know. And so it's super easy for people to trade, which is why the Trump coin did so well out of the gate. And so I think that that's a harbinger for the future. Right? There will be a bunch of altcoins that do things right. Obviously, I think one of the standout successes has been Athena this cycle. Obviously I'm a large advisor, so I'm talking my book here. But, but there have been some super successful projects that are, you know, 10 to 20 billion FDV sort of things. The issue is that all that sort of energy and money went into meme coins. You know, we have, you know, Trump went to 80 billion FTV at its high a few days ago. You have, you know, dog with hat went to multiple billions and all these different things. So all that energy is moved over to a space that's easy to trade. You don't have to know anything about it. And yeah, you don't have to read some white paper and listen to a bunch of lies by some person trying to pull the wool over your eyes with using a lot of developer speak. Right? Which is what most of the altcoins are. It's all dog shit. It's just that we didn't have anything else to invest in. We didn't have anything memetic to invest in. Now we do now you're going to have to be that much better as a utility project to garner capital. Because if I'm the random degen, I'm like, okay, well I can trump Coin it, or I can read this 50 page paper and not understand a fucking thing that they're saying. And half the time they're rugging me anyway.
- [22:01]
A
So the memes are more intellectually honest, basically. And we're just basically saying we're a bunch of degenerate gamblers who are here to speculate. And regardless of utility, we just want to speculate on your token.
- [22:12]
B
Right, Exactly.
- [22:13]
A
Give me a narrative. I don't care. But it's all about the number go up. I mean, to your point though, Athena has done exceptionally well. Sui's done well. We've had a number of kind of the new shiny layer ones do well, and Solana has done exceptionally well. Do you think that because you believe memes are here to stay, that Solana will remain the Meme Coin Casino and will do well? I mean, listen, I said I want to own the casino. I don't want to be playing at the table for someone like me, I feel like throwing random Solana at a bunch of memes is probably going to be losing money at the table. But if you just buy Solana, you get to be the casino.
- [22:48]
B
I mean, obviously it's Solana's game to lose at this point. You're going to have other chains like Aptos and other layer ones trying to come up there and say, oh, wow, look at all these transactions, look at all these fees. I need to be in there too. Don't sleep on Ethereum. Maybe they stop selling their fucking coins as a foundation and get their shit together and come up with some sort of answer to this as well, right? It's the same story as Nvidia, right? Ethereum back in 2020 was the Nvidia of today, right? Super successful trades have some ridiculous multiple. And then someone says, oh, I can do that better and cheaper and faster. Maybe it's not decentralized or whatever, right? You can make all these claims about what Solana is or isn't or any of these other layer ones in terms of security and all these sorts of things that Ethereum prides itself on, but at the end of the day, the customer doesn't give a fuck, right? It was fast, it was cheaper, I used it. You had something on there that was there. It wasn't on Ethereum. I used it. And so Solana, hopefully for people who are massively long, that doesn't fall victim to the same thing as Nvidia and Ethereum in terms of a faster beast, cheaper, shinier, bauble on the rise is going to do Meme Coins better, or whatever it is.
- [23:54]
A
The new thing, faster and cheaper is indisputable because the bulk of USDT tether transactions are on Tron. Right. I can't find anyone who likes Tron, but everybody's using it because it's fast and cheap and there's a ton of USDT liquidity on there and it's been the best example of that. And every time I point that out to people, they say that's not true. They can't believe it. Right? Everybody, I think, believes that stablecoins are all moving on Ethereum, but the bulk of them are moving on Tron because it's fast and cheap. And their friend in Venezuela said, I want to send you 10 bucks, dude, download this app.
- [24:28]
B
Yeah, exactly.
- [24:31]
A
It just blows my mind how little, I guess people care in this market, but. But it shouldn't. But that said, do you think that we will have people caring about utility on any of these things in the market that's coming? We have huge narratives that could potentially play out here. Obviously real world assets, rwa. A lot of people pointing to that to potentially be kind of the big mover in this cycle. AI agents or the crossover between AI and crypto. Do you find any of this to be real and meaningful, at least in this cycle? For sure.
- [24:59]
B
I mean, I'm a hater on RWAs, but that's a different sort of situation. At the end of the day, there will be super successful projects in each one of these verticals. It's just not. You just can't be Ripple and Cardano in 2025 do nothing and have a massive valuation. Right. That was then, this is now. There's way more competition. The money can go elsewhere. So I think if you think that, oh, we need to have a 2020 DeFi summer or ICO 27, 2017 again, things change. We have meme coins now, so go with where the market is. Does that mean that useful things are not going to get built? Of course not, Neilstrom. We're funding useful things. Hopefully we pick the next Athena of the next cycle. But at the end of the day, it's going to be harder and harder to pick those things because the retail capital is done with high fdv, low flow VC coins. They want instant liquidity on meme coins and trade their favorite celebrity or politician.
- [25:54]
A
What the celebrity politician has in high FTV and low float is a meme Coin.
- [25:59]
B
We'll see how that, how that resolves itself in 2028.
- [26:04]
A
I had a long conversation with Haseeb Qureshi from Dragonfly about this, and he was very adamant that Trump is not a meme coin. He said, listen, you're betting on, well, his idea. He wouldn't go so far as to say, this is clearly a security, and I don't know where. Where on the sliding scale it is, but he said, listen, people are only buying and selling it because of the name of the person promoting, which is obviously Donald Trump. He said, you know, if it was a true meme coin, 100% of the supply would be on the market. It would be sort of freely floating and there' price discovery. But these guys have taken that VC model you just described, which would normally be ascribed to a security, and held 80% of the supply after sniping 80% of the existing supply when it came out. Listen, I'm not saying they're doing anything wrong necessarily, but this isn't just the classic launch of a meme coin where all the supply is out there and it's fair game to some degree.
- [26:56]
B
Of course not. But at the end of the day, he's Donald Trump and he could do that. The next person who does it, I don't think they'll be able to get away with it. So the community will demand. It'll get lower and lower and lower. Right. Maybe the next person does 50% and then those 30%, and then, you know, by the time some random, you know, Minister of Parliament or legislator wants to launch their own political meme coin, the standard will be fair. Launch, no bags, hell, all this kind of stuff. Right. But the first one gets to get away with murder. Right. It's so good on him. It's a financial game. He's a financial guy and he did what he did.
- [27:32]
A
Yeah. I mean, there was this sentiment that the President did, and I can do it. I don't think that's going to fly in court, according to any of the lawyers that I've spoken to. So I don't think.
- [27:40]
B
I have no idea about the legal side of it. It's. Yeah, I think it's more about what the community is going to demand out of. Oh, it's not political meme coins.
- [27:47]
A
Did you see that? Right after the inauguration, the preacher who gave the prayer at the inauguration launched a meme coin immediately called Lorenzo.
- [27:57]
B
No. That's awesome.
- [27:59]
A
You have got to see this. He launched it, called Lorenzo, and he said, you know, the community has sent me a Bunch of tokens, and then went on to say, I've locked them in a liquidity pool to make sure that I don't. And it was like, dude, you're not ignorant of how this works, right? It's one of the funniest tweets I've quite literally ever seen on Twitter, so you definitely have to see it. Moving on, though, I want to talk about Ethereum. You kind of alluded to the fact that maybe they'll get their shit together. The foundational, stop dumping. They've sort of had this like people viewing them as a woke project or dysfunctional or it's been replaced by these others. To me that sounds like a buying opportunity. When people tell me that something's going to zero and it's beaten down, but still has, you know, meaningful liquidity and name brand. Do you think the Ethereum can perform well this cycle? For sure.
- [28:42]
B
I mean, it's. The Electric Capital Report still says that they have the most developers. That's the end. That's all I need to say. You still have people building on Ethereum. We still find lots of really intelligent people building new stuff on Ethereum. It's still, what, three or four times the market cap of Solana, So still the number two has name recognition, blah, blah, blah. Right. So I wouldn't count them out. I don't know the politics of the foundation. All I read is what's on Twitter and they're selling coins. That's it. Do I give a fuck about their mission or whatever the fuck? No. Sounds like Vitalik cares about the price, so, you know, maybe he'll do something about it. I don't know, maybe the community will demand something about it. But at the end of the day, even without all that, there's a lot of hate. And when there's a lot of hate, there's a lot of opportunity.
- [29:31]
A
Yeah. Okay, so we're aligned there. Obviously they're the second asset that got a spot etf. So obviously you have institutions looking at them. With Trump coming in and the changeover at the sec, a lot of people speculating that we're going to get a slew of other ETFs. I mean, we've seen a Trump and a Doge ETF filed for. Maybe we don't see those quite yet, but I do think that people are handicapping. The odds of a Solana ETF is relatively high, maybe even an XRP etf. Do you think that these products, as we sort of trickle down and add more, are going to be particularly popular or meaningful for the price of these assets. It hasn't been really for Ethereum yet.
- [30:08]
B
I mean, obviously they don't have as much name recognition as Bitcoin. So while the Ethereum ETF launch has been great, it hasn't nearly been as much of a knockout success as Bitcoin. And obviously the marginal popularity will decline as we go down the stack in terms of the market cap rankings. I think at the end of the day what pushes people to reallocate is money printing. If my government bond portfolio is underperforming, if the economy is rocking and rolling and I'm only getting 3 or 4% on my bonds or in my bank account, then the crypto ETFs look like a good deal. But if that liquidity isn't there, then I'm going to stick with what I know because I talk with lots of high net worth money managers and like, oh, are your clients asking for any of this stuff? And yeah, while in our echo chamber we think that this is really important. No rich people are asking for crypto in a big way, right? So it's still not a thing. And so yes, Bitcoin is a thing, everyone knows what Bitcoin is. But the Solana ETF is not going to be as successful as the Ethereum one is, the Ripple one, as a Cardano one or whatever down the line, unless you sort of get a mental shift. And that takes time because at the end of the day, all these wealth advisors basically plug in a bunch of numbers into a computer, it tells them the historical returns and they say, look, it did well in the past, it'll do well in the future, don't fire me if it goes on in price. And so once you get enough history, then they can sort of reduce their career risk by putting people into these crypto products. And that takes time. And so I think crypto people have been impatient in terms of how long it's going to take for these really to impact the market. But if you think about it, the passive investing movement has added zenith right now. But this ETFs were launched in the mid-90s, in the early 90s, and it's only now, 30 years later that we're really seeing the real effects of this set it and forget it type of passive investing. And so I think we're going to need some time for the salespeople around the world to start getting these things embedded into pension plans, all these sorts of defined contribution things, all these set it and forget it type of investing programs. It takes time. So I Don't think that if one of these launches tomorrow, it's going to have a massive impact on the price of crypto.
- [32:20]
A
The Bitcoin ETFs aren't even there yet, right? I mean, if you look, you talk to financial advisors, you talk to the issuers, they say it's a fraction of people that even have access to them. A right, because, you know, most wirehouses haven't approved them, Vanguard's never approving them, apparently, and a lot of RIAs haven't done the due diligence. So if we can't even get the Bitcoin ETFs passive into those passive allocations, good luck. Doge ETF. So we talked about the dip to 75 and the prediction of 250, but we didn't talk about what sends us to 250 unless it's simply just a whole lot of liquidity. But that's still a much, much, much bigger number than 75. I mean, that's over a 2 1/2x up from those lows. So do you think that there's something unique to the bitcoin news cycle or market that sends it to those highs? Is it just the cycle or is it just high beta to everything else rising?
- [33:15]
B
Well, I think if you listen to what Trump and Besson and, you know, all of his lieutenants want to do, they want to rearrange the world around the U.S. you know, take them at their word, whatever. But that requires a lot of money. Printing it requires destroying the real value of government bonds in the United States. It's the only way they can do what they want to do requires massive amounts of bank credit creation to hand to companies to build things in America because they can't afford to do it, because China just so much better at it, right? So it requires trillions of dollars of money. It can only come via printing it. And they're going to use the ability to have the world's reserve currency to essentially reflate America. That's in America. In China, they need to do almost the same thing, a little bit different, Right? They need to pump up their property market, get the plebs investing in stocks again, get them confident again, get inflation up. They need to print yuan as well. Japan needs to sell a bunch of shit and repatriate yen. And the US doesn't want them to sell the stuff, so the US is going to give them the money so they don't sell anything. Right. Europe wants to decarbonize, but then shut off all their energy from Russia. And shut off products from China and continue having the biggest welfare state in the world. So they need to print money as well. So everybody needs to do the same things to fulfill their goals. And I think the catalyst for getting into gear is, you know, Trump invested, been very clear, we're going to weaken the dollar, we're going to increase credit creation and that's going to create growth. We'll see if that actually happens or not. But at the end of the day they're going to try and they've been very consistent in that message. And if you listen to some of the macro analysts I read Zoltan Pazer and some other guys who a lot of these people listen to, what are the things they're talking about, devaluing the dollar versus gold, terming up, telling friendly countries, hey, you have all these Treasuries that mature in 10 years. We're going to stuff you with a 100 year treasury. You can't sell it. I'll give you dollars for it if you need them. But if you want US markets and US security umbrella, you're going to take your Treasuries and turn them into 100 year bonds, which is a massive devaluation, or you're going to give us your gold and we're going to give you this piece of paper and if you don't like it, go fuck yourself. That's what they're telling people. And so it's going to happen. And these are the sorts of things, these are the massive changes in the economics of the world that will bring crypto the only free market left in the world and to an extent gold to levels that we fiat price levels that we would not find that are unimaginable. And so that's why I think that that's how we get to a million dollar Bitcoin. 250,000 is a stop in the way. It's this realignment of the chessboard and everybody on the board is going to print money to help themselves out.
- [36:03]
A
Sounds exceptionally good for wealthy people who hold hard assets and exceptionally bad for everyone else.
- [36:09]
B
Exactly.
- [36:11]
A
Sad, sad state of affairs. But I guess we can both agree as we conclude here, that just buy some bitcoin, regardless of where you are, that spectrum, and at least you'll have a bit of a hedge against all of this nonsense.
- [36:22]
B
Exactly.
- [36:24]
A
Arthur. Enjoy your skiing. I know that we gotta go and you have better things to do. So I appreciate the conversation as always, man. Have a great day.
- [36:32]
B
Thanks for having me.