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The Wolf Of All Streets
Big Dump Ahead? How Long Will Bitcoin Stay Above $100K? | Trading Alpha
00:51:38
Big Dump Ahead? How Long Will Bitcoin Stay Above $100K? | Trading Alpha
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- [00:01]
Scott Melker
Arthur Hayes predicts a huge dump coming for crypto and bitcoin after Inauguration Day for Trump, saying that he will not reach all of our expectations. Everybody will be disappointed and everything will go massively down. Not sure I agree. We have a lot to talk about beyond that, of course. The Fed meeting yesterday where exactly what was supposed to happen happened, but apparently humans decided that that was really bad and panicked and sold everything. And on days like this, there's nobody better to talk to than my good friend Mark Yusco. And of course, chart guys on the back half. Can't wait to get the show started, guys. Let's go.
- [00:41]
Mark Yusco
Let's do.
- [00:55]
Scott Melker
What is up, everybody? I'm Scott Melker, also known as the Wolf of Allstreets. Before we get started, please subscribe to the channel. Hit that like, button. Gonna go ahead and bring on Mark straight away. Do not wanna waste any time. I mean, if you look at what happened yesterday, yeah, okay, we had the 25% basis point cut that was basically guaranteed. You had a slightly hawkish tone where they admitted that inflation was a little bit stickier, which is exactly what we expected. And bitcoin went from basically 105 down to like 98. Fine. But like the rest of the market was pretty wild. The Dow 1100 points, longest losing streak since 1974. We had Vix spiking 58%. We had stocks tumbling 3%. We had the largest drop after a fed meeting since 2001. I mean, why? Why? It's exactly what was supposed to happen. And carnage.
- [01:55]
Mark Yusco
Yeah, well, so why is never discernible, Right? Because it's. At the end of the day, this is what was needed to get the market out of, I'll call it silly town, Stupidville, whatever you want to call it. I mean, we are at levels we've only seen one other time in history in 2000. And what I mean by that is multiples, not of earnings, because earnings have been kind of weak. Ish. But multiples of revenue. Like I heard someone say the other day, you know, Nvidia trading at 26 times is normal. No, no, you're not talking about earnings. You're talking about revenue. And you know, the guy from Sun Microsystems in 2000 had this great quote. His name is Scott too. Scott McNally, great name. And he said, you know, at 10 times revenue, for an investor to make a good return, 10% return, I'd basically have to give you all of my revenue for the next decade, which is slightly problematic because I would go to jail for not paying My taxes and paying my people and paying my supplier. So I'm not going to do that now. His stock went down 98%. Now I'm not saying that Nvidia and all these other stocks are going to go down 98% but, but they could. And so you yesterday and like I say, the last 10 days, the only time we've seen this type of activity in equities was in 73, 74, which was after what, the nifty 50. The original like the pre 2000 kind of Microsoft, Wintel craziness, Cisco, we had this thing called the nifty 50 and basically Polaroid and a bunch IBM, you know, these glamour growth names. Think of Polaroid, right? Company is gone, right? No one takes Polaroids. Well, not no one, but very few people take polarizers anymore. And anyway, so I think the equity market totally kind of normal to the fact that there was a dissenter in the Fed. That doesn't happen very often. Usually they're all like, oh rah, rah. We're consensus, we're all one voice. So there's no dissent, although dissent, dialogue and dissent and debate. It's like what makes the search of truth. And that's interesting. I actually just read this this morning, Scott. Individuals seek truth, groups seek consensus. And that's why groups are such bad decision makers. And so long story short is the equity markets going down. They could and probably should. I mean Apple, Apple's great company, right. I have, you know, two iPhones right here. It's great company but they have very little growth over the last four or five years. Just, just not really growing.
- [05:23]
Scott Melker
Stock buybacks.
- [05:24]
Mark Yusco
Stock buybacks? Yeah, they do, they do manage earnings per share through stock buybacks. Absolutely. They issue some debt buybacks and stuff and people fall for it. But no growth. Essentially 41 times earnings. When Warren Buffett bought it, it was at 10 times earnings. He sold 2/3 of his by the.
- [05:46]
Scott Melker
Way, I remember when it was 10 times earnings back then, people saying it was too much.
- [05:50]
Mark Yusco
Oh yeah, absolutely, absolutely. Because it wasn't growing then and, or it's growing, it was growing less. So look, we're, we're in this crazy time where there's a willing suspension of disbelief. I mean you look at, at the, the market cap of some of these companies measured in trillions and you look at how much money they actually make measured in millions and billions. It, it just doesn't foot so now. But the problem is the type of action you saw yesterday is a liquidation, right? It's a flush. It's margin calls. Because that's the other problem. Too much leverage came back into the system. And you and I have talked about this. I mean, I love the fact that in your opening, you don't talk about how to teach you how to be a better trader or a better speculator or a better gambler. You talk about we help you become a better investor. And that's a very important term. There are four market participants, investors, traders, speculators and gamblers. And I'm not casting a spur. Well, maybe a little aspersion on the last, but maybe at the gamblers. Investors, absolutely. What we do is we try to buy things below their fair value, hold them, and when they get above fair value, we sell them. That's kind of what we do. And then you have traders, traders don't give a darn about fair value. They just want movement, right? They want to scalp some on the upside, scalp some on the downside. They trade. Most people are bad at it. It's like going to Vegas. The vast majority of people, you're going to donate your money and that's fine, it's entertainment, but. But the odds are stacked against you. And trading is kind of the same way. Think about every buy, there's someone on the other side. And you have to ask yourself, what does that person know that I don't? And how experienced are they and how professional are they? And if you're trading against Ken Griffin and you know, Millennium, you're probably outgunned in just raw intellectual horsepower. You know, if you're on the other side of Jim Simons, God rest his soul, you're just outgunned. And that doesn't make you a bad person. It's just. Just be knowledgeable. Then there are speculators and all speculator is the opposite side of a hedger, right? What's a hedger? A hedger is somebody who owns an asset that needs to sell it to pay their bills, right? Oil producer, gold producer, bitcoin miner. And a speculator just takes the opposite side of the sale. And those sales usually occur in the futures market, not in the spot market. So you sell oil futures and somebody comes and buys the other side. The gamblers are the problem. The gamblers are the people who come in late. And humans are going to human. They buy what they wish they would have bought. So they're buying things that have already moved and then they put leverage on top. So what happens in days like yesterday is people have leverage, they get a margin call. They can't sell what they'd like, to sell, because that almost went down. So they sell what they can sell. Cash, gold, bitcoin. And bitcoin is interesting in that. Now bitcoin is held by a lot of people, and it is very liquid. And this is what happened in 20. Remember, 20, 20. Remember, we fell 50%, 5, 0. From 10,000 to 5,000. Not 50,000. 5,000 in about 13 hours. Went down 50% in 13 hours. And it was like, oh, my God, it's the end. Like, no, that is a liquidation of the most liquid asset that these hedge funds had on their balance sheet. And they didn't really understand it or care about it, so they're like, get rid of that. Get me some cash to pay my margin call. So that was an amazing time to buy. You tweeted about it. I tweeted about. Jason Williams tweeted about. We all tweeted about it. And turns out we're up 20 fold from that. Just let that hang in the air for a second. 20 fold is pretty good. And. And yet there's still people that after yesterday are like, oh, my God, the world is ending. Bitcoin's over.
- [10:03]
Scott Melker
I'm telling you. You. Like, when I was reading X yesterday, you would think that breaking below 100 meant we were going to five.
- [10:12]
Mark Yusco
Yes.
- [10:12]
Scott Melker
And you would think this morning when I woke up sitting at 102, that the world was ended. And this is the price from three days ago when people were ecstatic. Three days.
- [10:22]
Mark Yusco
Three days. I mean, Scott, you know what's. I said humans are going to human. And part of the. I love X. Like, oh, no, no, no. Twitter. Twitter. I said a place. I would never call it X. So to me, I'm old. It's Twitter. But anyway, I don't like X.
- [10:39]
Scott Melker
But anyway, I think they should call it Twix.
- [10:41]
Mark Yusco
Yeah, Twix. There you go. Oh, I like that.
- [10:43]
Dan
That's.
- [10:44]
Mark Yusco
That's tasty.
- [10:44]
Scott Melker
Not trademarked yet. So. But.
- [10:46]
Mark Yusco
But here's the thing. So I love the platform. I mean, I love it. And that has nothing to do with the con. I just love the dialogue. You know, I make friends there. I mean, not like, you know, good buddies, but friends. Like associates. Colleagues all around the world. And it's awesome. I love it. So. But the thing I don't like about it is that in order to rise above, you know, the mass of information, you gotta be extreme and you gotta be negative, because negative sells more than positive. If I say cheery things, people are like, yeah, whatever, that's boring. If I say, oh, my God, the world is ending. Oh, oh, tell me more. How about pictures of puppies?
- [11:37]
Scott Melker
Anyway, so, yeah, and so on the back of the exactly anticipated speech that we got from pal, you also had the dollar fly. You had bonds dump, interest rates rise. But we often talk about the fact that the first reaction is the wrong one. So of course, this morning things are kind of bouncing as we said bitcoin back to 102. But there was one more thing that sent bitcoin down and It's a like 20 second video I'd like to show really quick. We're going to watch pal assets that.
- [12:09]
Mark Yusco
Have, that have been buoyant. Do you see any value or benefits in the US Government building a reserve of bitcoin?
- [12:17]
Scott Melker
So, you know, we, we're not allowed to own bitcoin. The Federal Reserve act says what we.
- [12:23]
Mark Yusco
Can own and we're not looking for a law change.
- [12:26]
Scott Melker
That's the kind of thing for Congress to consider. But we are not looking for a.
- [12:29]
Mark Yusco
Law change at the Fed.
- [12:32]
Scott Melker
Okay, that's factual. The correct answer. Dummies thought that meant that we can't have a bitcoin strategic reserve. The gold reserve is controlled by the Treasury. The petroleum is controlled by the Department of Energy. The Fed was never going to be the. Oh my God.
- [12:47]
Mark Yusco
See, I love, I love that you showed the video because that's the other problem with Twitter and all printed media.
- [12:57]
Scott Melker
It's a game of telephone.
- [12:59]
Mark Yusco
No, no, but, but it is a game of telephone. But even worse, this is why every fight that you've ever had with your spouse, you know, your better 90%, my better 90%. Like we all over marry. I said, you know, you took it to an art form. But, but, you know, Emmy's great. And here's the thing. Every fight you have comes from a misunderstanding over words or a text because words are 7% of communication. The rest is intonation, which you don't get intonation on the phone. You don't get intonation on a tweet. If you watch the video where he, in a very dejected kind of way read body language, said, I can't answer that question. Okay, he didn't say that. But that's what hit the body language saying, I can't answer that question because I, by law, the Fed am prohibited from talking about or owning that asset that you want to talk about. He didn't say that the government can't own it. He didn't say the treasury can't own it. He didn't say that. He didn't answer. Actually, he didn't answer the question. Do you think the strategic Bitcoin reserve is a good idea or not? He never answered that question. All he said was, me, little old Jerome can't own that asset. Because what people forget. This is the crazy part. The Federal Reserve is neither federal nor has any reserves. Right. They're not a bank. Like, if you go there and you say, hey, show me the gold bars. They don't have any gold bars. What the Fed is, is an empty building filled with suits that pontificate about the direction of the economy and interest rates. And here's the crazy thing, Scott. They've made quarterly projections of CPI and GDP growth going back. I think it's like 245 or 246 quarters. How many times do you think they've been right? Zero. I mean, I could flip a coin and be right 50% of the time. They have to work really hard to be wrong every single time. It's like Elizabeth Warren never passing a bill.
- [15:25]
Scott Melker
I guess the question is, are they wrong or are they putting out what they need to put out? You mean share the narrative and make sure that markets stay in the exact fashion and direction.
- [15:37]
Mark Yusco
Do as we do, not as we say. Right. So, of course, that's it. It's like Goldman research. And if you look at Goldman research and Morgan Stanley research in the old days, horrible. Like, horrible. And people are like, oh, my God. I mean, they pay the average person, you know, $4 million a year. How are they so bad? Like, are you. Are you that slow? They intentionally tell you the opposite of what they're doing on the prop desk because they need someone to take the other side of the trade. Remember, think about who's on the other side of the trade. So the point about the Fed, they're not a bank. They're not a bank. They are a money manipulation scheme. I was going to use the C word, but a scheme owned by European families and banks. I mean, that's what it is. And the idea that someone thinks that, oh, they're going to. Jerome's going to trot off with a wheelbarrow full of money and exchange it for a wheelbarrow full of little gold bitcoins. Like, there's no gold and there's no coin. I mean, I hate that they make Bitcoin into a gold coin. It's just no gold, no coins.
- [16:55]
Scott Melker
Yeah. It's just nonsense. But the misunderstood, fundamental misunderstanding of how these things even work, that people would have a negative reaction to what he said in this case, that's not him trying to manipulate anything. He's just telling you how it is. Well, but, you know, but. But you're right, though, about his body language, by the way, it. It was reminiscent to me of that time, was it in Davos that they had J.P. morgan, Jamie Dimon out in the snow, and they've been just relentlessly asking about bitcoin for months. He said, I'm not talking about this anymore. I'm done. This last time, you hear me mention bitcoin, like, just done over it.
- [17:27]
Mark Yusco
And then the next year, he spent his entire 10 minutes, which you could talk about anything in the world, right? Most powerful people in the world. And he spent the next 10 minutes talking about bitcoin. So he was done. Except. Except when he's not done. But I think what you do on this show, and it's why I love coming on with you, you go to the source, and that's what people need to do more, right? You can't just read a headline. You can't just read a tweet. You have to go to the source, listen to the intonation, look at the body language, do some additional research. I mean, look, I'm down here in North Carolina. We just hired Belichick to be the coach. And it was like, oh, Arch Manning is coming from Texas to unc. Okay, that's a rumor. It's not a fact. It's a rumor, and let's corroborate it. So let's go. Let's go. Now, when you listen to his grandfather, Archie Manning, like, oh, damn. He's coming because Archie Manning wants his grandson to play for the Dallas Cowboys, not to play professional football. He wants him to play for this specific team. Like, but, Archie, that's not the way it works, right? I mean, there's a draft, and the team that does the worst gets to pick the best person. No, I'm Archie Manning, and I want my son on the Cowboys. I mean, my grandson on the Cowboys. So Belichick could get that done for me. I'm confident of that. That's what he was saying. Now, he didn't say those words, but that's what I'm reading into his body language and intonation. So I'm pretty sure Arch Manning's coming to Carolina. Maybe he doesn't. Who knows? But it's amazing that people were tweeting at me or sending me emails saying, hey, Arch is coming to. Based on what? I mean, don't have any corroboration. So go to the source before you make decisions and before you freak Out. And so I don't understand why anyone thinks any asset goes up smoothly. Because everybody listening to this knows that Bitcoin is an 80, 70 something ish volume asset. Right now. That volume is declining and it has periods of time where it's very low, but it's still in the mid-70s volume asset. Oh, the same as Amazon stock, by the way, which people are like, no, that's not true. I actually look at the math, look at, look at the data. Amazon has a double digit drawdown every single year of its existence, 28 years in a row. And when was the right time to sell it? Never. On average you lose a third of its value every single year. But who was willing to buy it and hold it through all that volatility? I say five people in the whole world. Jeff. Mom, dad, ex wife and Bill Miller. That's it. I love this Bill Miller the dad, not the son. And Bill Miller, I love the son, Bill Miller. Awesome. Calm Quattro. No, I'm just kidding. Probably wouldn't like that. But Bill, Bill, the sun is great, but Bill the dad is legendary. I mean his cost of Amazon is 7 cents. It's pretty good.
- [20:56]
Scott Melker
I mean that is, yeah, that's a pretty good trade.
- [21:00]
Mark Yusco
And he was early to bitcoin, right? He was, yeah, we're, you know, I refer to myself and Dan Morehead and, and you know, a bunch of other guys, Raoul and, and am I blanking on, on his name? Galaxy Mike, as, as the OMGs, right? The old macro guys. Because one, we are old. Two, we are all ex macro guys and we happen to be guys. And Bill isn't a macro guy, but he's an old investing guy so he kind of counts. And he's, I mean he's legendary. I mean he's one of the best investors ever. And for him. So there's him and Murray Stahl. And Murray, you should get on the show sometime. I don't know if he would do it, but I think he would.
- [21:50]
Scott Melker
I'd love to have him.
- [21:51]
Mark Yusco
So Murray, you know, is from Horizon Kinetics and they're a multi billion dollar value manager. You're like, what's a value value manager doing own Bitcoin? He's actually one of the largest mining support businesses. I love this guy. In the crashes, right? In 17 and 21, he goes out and he buys all the dead machines, like all the miners that have to shut down. He buys all the machines and he pieces them out and then he sells the parts to miners that need to fix their stuff. I Had no mad genius. Right? Mad genius. So. But he also was an early bitcoin investor. And I joke. Murray is the only guy who makes me seem bearish on bitcoin. I mean, as bullish as I am, right? I got the buy bitcoin sign right there. As bullish as I am, he makes me seem bearish because I only believe we're headed to kind of, you know, 6 trillion easy. That's digital gold, right? The monetary equivalent of gold. And then, you know, probably double that, you know, 10, 12 trillion. He's like, no mark, no 100 trillion easy. Like what are you talking about? It's like no, reverse Gresham's law. So Gresham's law says that bad money crowds out good. We've all seen the picture of Weimer Wheelbarrow and Venezuela where you got a stack of stuff that couldn't buy a chicken, if you could even get a chicken.
- [23:18]
Scott Melker
That's like $6 million of Bitcoin, right? Yeah, says five, six. Cool.
- [23:23]
Mark Yusco
Exactly, exactly, exactly. And, and he says, no, no, this is the perfect money. And I don't remember who said it. I wish I could give remember who said just the other day they said, you know, Satoshi accidentally created perfect money in trying to solve the double spend problem for peer to peer transactions. Right. If I had electronic money and I just could copy paste and send it to you like the old days of file sharing, of music, then I would be committing fraud. And only the Fed can do that. Hahaha. I can print money out of thin air. But so Satoshi solved the problem in the digital world that we can only send. If I actually send it to you digitally, then I don't have it anymore. So he solved the double spend. But in so doing, he created perfect money. Gold had been perfect money, but it was imperfect in that it wasn't very portable.
- [24:31]
Scott Melker
Portability, divisibility, it wasn't very divisible.
- [24:34]
Mark Yusco
So it was perfect. Ish. Bitcoin is perfect. It's the perfect money. And so now he's saying it will crowd out all money.
- [24:46]
Scott Melker
That's so we'll completely demonetize all money. Like gold demonetized silver times many multiples.
- [24:52]
Mark Yusco
Exactly. And he's not saying it's gonna happen tomorrow, but he's so compelling. You're like, damn, I'm not bullish enough.
- [25:01]
Scott Melker
If that happened tomorrow, we'd be full Mad Max.
- [25:04]
Mark Yusco
Oh no. Exactly, exactly.
- [25:06]
Scott Melker
The whole like in 90 to 30 days to a million dollar bitcoin, I' like that would be awesome. But I don't want to like, no.
- [25:14]
Mark Yusco
It'S not going to happen. It's never going to happen. Markets don't work that way. Humans don't work that way. The bots, Ken Griffin's not going to let that happen. Because what happens is the bots, right, which are controlled by Ken and Millennium and Izzy and, and you know, you know, Simon's Renaissance. The bots control the moves. And you can see it if you step back and you look long term. So from February to September, okay, what did we do? We had the big run up in February on, oh my God, Demand Forever. It's awesome. From the ETFs. And then we did this lower highs and lower lows for seven months. People are like, what the fuck? No, no, that's not supposed to happen. Well, you're not paying attention. The bots are dinging the future every day. Like Millennium has 2 billion of Bitcoin ETFs. No, they don't. I mean, yes they do, but they also have two or more billion of shorts in the futures market because they are a market neutral firm. So the bots. And what happens is as particularly, you're going to see it next week, right? In the holiday week. So on the holiday days where the market's still open but nobody's at work, like Monday, you know, I said to my guys on Monday, so are we gonna have our call on Monday? You know, no, no, I'm out. Like, no, no, we close after Christmas through New Year's. We didn't close the day before, the day before Christmas, but my guys did a coup. And so now we're closed. But so on that day, I guarantee Monday, the bots will do something either up or down, I don't know which one, but they will move the price because there's no humans there to react. And so the bots skim all this money. And that's why Ken is so rich. Because he built a system that is just better than, and same with Renaissance and, and, and Millennium. But the fact that people don't think about this and don't understand, now we're in a higher highs and higher lows accumulation phase. And now the reality of accumulation and you know this guy saying, oh, you know, there's no way they're going to pass the bitcoin strategic reserve and everybody's going to be disappointed after the inauguration. Okay, I mean here's, here's what could happen. The Donald is all about the Donald. Let's just be very clear on this.
- [27:59]
Scott Melker
That's what Nick Carter was Saying yesterday, he's like, no strategic reserve. Just quickly, he was like, no strategic reserve because it would show that the United States didn't have faith in the dollar. I don't know that I agree with that, but that was.
- [28:08]
Mark Yusco
No, no, I think that's totally wrong. Here's the thing. The Donald is all about the Donald, right? In his first term, what did he do? He passed bills. I mean, he didn't pass them. Congress passed bills that he signed or didn't veto that enriched him and his family, right? From inheritance taxes to exempting real estate from this partnership. So everything he did was to make himself rich, like housing the Secret Service, people at his hotels, when he played golf. All about enriching himself. Whatever. That's what. You know, politicians been doing that forever. But this time, he's doing it in crypto. And everyone in politics does it in the stock market. Look at Nancy Pelosi, et cetera, et cetera, and Mitch McConnell and all these guys. Richard Burr down here, right before that, right before lockdowns, magically, Richard Burr, who is not a biologist, bought a bunch of healthcare stocks. It was uncanny. Uncanny. So here's the thing. And then when he got accused of insider trading, he's like, hey, it's part of my job. It's part of my compensation. And he didn't go to jail. Martha Stewart goes to jail. He doesn't go to jail. I don't think it's weird. So what Trump is doing through this entity that he owns, he. And it's really his son, because I don't think Donald really understands this stuff, is buying a bunch of crypto Bitcoin and Hedera and XRP, a bunch of.
- [29:41]
Scott Melker
Things that might be approved for ETFs next year.
- [29:45]
Mark Yusco
Shocking how that works. And, oh, and they're talking about exempting American coins. What the does that mean?
- [29:54]
Scott Melker
From capital gains.
- [29:55]
Mark Yusco
From capital gains. So here's the thing. As much as I hate, and I do hate XRP and Cardano, because there's no there there. There's no developers, there's no nothing. And look, Brad Garlinghouse is. He's smarter than me. He's richer than me because he built a big old scam that's working, and no one likes when I say that, but there's no there there. And Circle, which actually has a real stablecoin, $42 billion of value. Real. Backed up by dollars, which is why a strategic bitcoin reserve would be good for the dollar. Not bad, but real, has about a $5 billion market cap. XRP fully diluted, which has like 50 million in their stablecoin as $170 billion of value. It's just anyway, because this, this is likely to happen. So I think, I think Trump, he, he got told to go to Nashville because, hey, there's this bunch of people that, that, you know, they're one, one issue voters, kind of like the abortion people are one issue voters. Go and tell them what they need to hear. And he did. And I, I still one of my favorite things, and you remember this says on day one, I will fire Gary Gensler. And the place went and you could see it in his face.
- [31:22]
Scott Melker
You guys really like that?
- [31:24]
Mark Yusco
You really like that?
- [31:25]
Scott Melker
Say it again. Like I was amazing and it was.
- [31:28]
Mark Yusco
Amazing and it was so, so he's stuck. He has to free Ross. He has to do strategic reserve. Now Congress could override, but Lummis is really strong. So I, I think that's going to happen.
- [31:44]
Scott Melker
Yeah, I think it could happen just in a muted, more muted fashion. But like, you know, we just hold on to what we have and we call it a strategic reserve and. Great. And it would be absolutely huge, just huge for bitcoin.
- [31:57]
Mark Yusco
Well, look, everything that isn't hostility is huge. And the hostility's gone. The hostility's gone. Look at the four people that are in charge of finance. Scott Besant, mad genius, amazing guy, pro crypto. Not like a Degen, but he's definitely pro crypto, really smart and he's going to be supportive. Lutnick clearly pro crypto. I mean can or Fitz owns 5% of Tether and you know, there's some dicey stuff there but, but he's pro crypto. Then you got the new head of the sec totally pro crypto. And now you got David Marcus, who's one of the best thinkers on digital that there is and was way ahead of the game with the Libra project and if it weren't for debanking, they would have got that out and we would had 4 billion people with wallets around the world trading the Facebook coin. So you're telling me that those four people are somehow going to turn negative?
- [32:59]
Scott Melker
Yeah, it's every position, even the ones that are completely unrelated to crypto or finance or the economy. They're all pro bitcoiners. And that's because it's all technologists. Right. And so I actually, it'll come out Sunday. I know we're over time, but I interviewed Raoul Paul Powell yesterday or two days ago and we were talking about the election. He was like, it Wasn't Republican, Democrat. He was like, the technologists took over. Yes, everybody's talking about the billionaires, whatever. He's like, Brian Armstrong won that election. He's like, they saw the opportunity with Trump, they gave a bunch of money, they swung all the elections. He's like, and now all the billionaire technologists who just want to be able to innovate and be entrepreneurs in this country, which has been stifled for the last however many years, they won. They're all going into power and all this stuff is going to push forward. And whether it's in their self interest or the. It's in the interest of everybody for us obviously, as the United States to lead in technology. But he said this was a technologist revolution. That's what it was. It wasn't Trump, it was the tech. Not which it was, but like it was that Trump realized this time that he should put smart people in positions of power and follow them and let.
- [34:04]
Mark Yusco
Them do their thing and make a lot of money. He's pulling up Putin, right? Putin created one of the largest fortunes in the world. Never gets reported, but he's worth 300 ish billion, right? So Trump, Trump's gonna do the same thing. And that's fine. I mean, it just is the way it is. But to your point, what's amazing about this is we've gone away from the nonsense of just graft and corruption for just the political elites in the Democratic Party to grafting corruption and cronyism for the people at the top. But the trickle down is real and.
- [34:46]
Scott Melker
You can front run them in crypto.
- [34:47]
Mark Yusco
We can run them.
- [34:48]
Scott Melker
We haven't been able to before.
- [34:49]
Mark Yusco
But more importantly, look, everyone rails about Bezos, right? Oh, he's too rich. He needs to pay his fair share. Shut the hell up. That company did not exist 28 years ago and today it employs five and a half million people. Five and a half million people. In fact, not this past year, but in 23, it was more than 100% of net new jobs, one company. So stop with the. Oh, the person at the top. No, if the person at the top negotiate a good deal to keep a bunch of comp, so be it. But as long as the company generates jobs, generates opportunity, generates wealth, because it's.
- [35:37]
Scott Melker
A net, net positive.
- [35:38]
Mark Yusco
Regardless of the silly idea that you can create wealth by printing money. It's just not true. It's never been true. Because if it were true, then everyone would do it. And Stephanie Kelton is an idiot. And I. And I'm glad. Almost gone. Although this new Bill is all Keltonisms. It's all about, oh my God, we gotta get all this done before we're out of power. And hopefully they won't pass it because it's trash and then has a whole bunch of other sinister stuff in it. Not related to finance and spending, but once the technologists are in and whether you love or hate Elon, look, I've never been a big Elon fan. Although lately this isn't true. Both Trump and Elon, I really didn't like them very much, but every once in a while they would say stuff, I was like, huh? It's like really logical. I like that. Okay, I'll listen more. And then they'd say something stupid and I'm like, oh, see? But now lately they're saying a lot of great stuff like Elon's views on education. Wow.
- [36:43]
Scott Melker
And he's the one who pretty. I mean, a lot of people pointing to what he said yesterday tweeted that anyone who votes for the spending deal should lose reelection. That made things pretty hard. It's incredible how much power he has now.
- [36:55]
Mark Yusco
It is. And look, you can go down the rabbit hole of how did he get so much power? And is he anyway. But it doesn't matter. The fact is, the things that are being promoted today, like you say, it's not to me, it's not about left and right anymore. It's about in and out. You're either in power, you're out of power, and now in. We have a chance to have an American renaissance, really make America great again. We've always been great, but the last four years, I actually twice went to look at other places I might move to, not embarrassed to say that it was one of them. I went to Costa Rica and Portugal and I came away from Costa Rica thinking, nice but not quite. And look, a bunch of people live in what's the main city, San Jose. And they love it. I'm like, still looks a little locked downish like Johannesburg to me. So no, Portugal, Move there tomorrow. Move there tomorrow. It was like San Francisco, but better coffee and the people were amazing. And so I would move there tomorrow, but my wife's not moving yet because things aren't that bad. And now with the change, we don't have to move because I think we're on the right path.
- [38:21]
Scott Melker
Yeah, I remember when I was, we're going to, we're going to wrap. But I remember when I was down in Puerto Rico looking not so long ago, and they were saying, listen, like, if you think Biden's going to win. Buy real estate in Puerto Rico right now because everything doubles when everybody runs away and comes Puerto Rico. He's like, but if they Trump's going to win and you still want to move to Puerto Rico for no taxes, maybe wait six months till after the election.
- [38:40]
Mark Yusco
There you go. There you go. And if you do decide, if you do decide to do it, one of my classmates from Notre Dame runs a bank there. So get you a good mortgage.
- [38:49]
Scott Melker
Perfect. Exactly what I'll do if I decide to move. Mark, I know we kept you like 15 minutes.
- [38:55]
Mark Yusco
This is always great.
- [38:56]
Scott Melker
Awesome.
- [38:57]
Mark Yusco
I wish, I wish you and yours and everyone on, on, on the show the best for the holidays. Safe travels wherever you go. Be with friends, family, loved ones. And let's come back in the new year and crush it.
- [39:13]
Scott Melker
2025 is going to be amazing. And same to you and yours. And enjoy your extra unplanned vacation day on Monday.
- [39:20]
Mark Yusco
All right. Thanks, man.
- [39:21]
Scott Melker
All right. Thank you, guys. Everybody follow Mark's right down below, obviously at X Markusco, I believe on Twitter, but the X name is down below in case there's another letter in there that I forgot about or something. And we made Dan wait patiently in the wings today. I'm sorry, man.
- [39:36]
Dan
No worries. I just followed him. He's new to me and, and I liked, you know, I was sitting here nodding a lot in the background, and I've already followed him and he's the kind of guy I would like to sit next to on an airplane.
- [39:46]
Scott Melker
Mark is a legend. He's got stories literally for days. Will talk your ear off. He used to run the endowment at Notre Dame. I mean, you know, Morgan Creek is one of the most notable hedge funds in history. He knows every Buffett on down. Just an incredible guy. Incredible to know. So and very early on, crypto, he once, you know, he once said to me, he was like, I've made all my money by like siding with the criminals. Before something became legitimate. It was like, you know, porn on the Internet. Crypto was for Silk Road and drugs. And it's just, you know, he's got endless, endless insight, but still need to look at the charts because yesterday was absolutely wild. I pointed out some of the sort of notable how big this day was in context of history. What bitcoin obviously did in reaction the words of Powell. You can kind of look at the chart and see most of it, right?
- [40:35]
Dan
Yeah. I mean, what happened in the NASDAQ and the broader market yesterday is what I call a sucker punch, which Mark talked about the liquidation flush that took place. So, you know, look up chart guys. Sucker punch. I got a whole long webinar about it, but that's what it is. It's just over complacent longs in a bull market that they just get flushed out because they're too confident. And it's almost like a reset. And we see that in all these bull. Bitcoin used to do that with a 30% drop before V shaped to new all time highs back in the 2017 or 2020 bull runs, or 2021 bull runs that we had. So nothing unusual there as far as where we stand now, we're looking for a four hour lower high on this bounce, essentially heading into the FOMC. Yesterday I was on the 12 hour chart and you know, rising wedges in a bull market have a much lower probability than in a bear market or when lower highs are most likely. But I was watching the same. If bitcoin's going to see weekly consolidation, which we know is inevitable, it would likely be from this 12 hour rising wedge. So now the big question is, do we reject a backtest and then drop to a lower low? And if so, weekly consolidation is going to be underway. And again, there's nothing wrong with that. It has to happen. We'll look for a weekly higher low to be the most likely scenario on that pullback. It's essentially just watching the next day or two to determine is weekly consolidation into next week the most likely scenario or not? And how we respond to the flush of yesterday is going to give us a lot of that information.
- [42:07]
Scott Melker
Yeah, I mean, I think that just tells all this time, bunch of leverage, bunch of bullishness, something triggers, somebody takes advantage and boom, there's a huge volatility. And nothing fundamentally here says bull runs over to me.
- [42:24]
Dan
And people just need to prepare themselves in the sense that we could drop to the upper 80 thousands. And the weekly chart still remains extremely strong in terms of retracement size and all that. So we just got to remember that 10% moves on Bitcoin pullbacks aren't that big a deal. Big picture.
- [42:42]
Scott Melker
I mean, 30% is not supposed to be a big deal.
- [42:45]
Dan
Yeah, I mean, I think we're, I think we're entering the phase of liquidity with the amount of liquidity entering bitcoin that eventually, eventually 30% is going to be a big deal because when there's significant liquidity, you know, the volatility shrinks a bit. But again, there's, there's nothing wrong with this chart. You anticipate Weekly consolidations inevitable. Why the sentiment is so bad on crypto is the altcoins and that's just the way that it is. You know, the dominance chart has to confirm a weekly downtrend if we're going to see altcoins get their time to shine. But I mean I've said it so many times, there's so many altcoins that I do not believe are going to hit all time highs in this run. And I think a lot of people are hopeful for 500 to 1000% moves on a bunch of these coins, which again I won't say it's impossible, but most likely scenario. I just don't see that happening this cycle because of a number of factors. One of them being the ETFs being where a ton of this bitcoin capital is going.
- [43:41]
Scott Melker
That doesn't trickle down, right, because it's stuck. But I will say like on dominance I just have this chart, right? So this is December 6th of 2016, is this red line. You can see that December was kind of rough but then obviously dominance fell off a cliff. If we believe in the four year cycle you got dominance peaking right around Christmas, Monday, 28th December in 2020 and then in January falls off a cliff. And now we had this high kind of right at the end of November, beginning of December, 61% dominance. Maybe there's just yet another lower high in the cycle. And January, it falls off a cliff. So we generally see like November kind of good for alts as people get excited about the cycle again. Then December you get a little punishment again kind of around the holidays and bitcoin dominates and then it falls off a cliff. Cliff. So I'm not saying it has to repeat, but it's doing exactly what it's done every sort of December of the four year cycle.
- [44:37]
Dan
And this is a visualization of that. This is the six month chart on the dominance. And again if you show me this chart, you don't tell me anything about it, you don't tell me what asset it is, you don't tell me the time frame. I tell you to scout this lower high and look for this range to continue tightening. And so that's what we're looking for. Again it can take months to take place because each candle is six months here. It's a very long term chart but that's the most likely scenario. So just watching to see can that shape up. So other than that I'm, you know, ethereum keeping an eye. It's almost like every time Ethereum Gets to a thousand, the market throws up the crypto space, drops a leg down. Clearly ETH is struggling with that zone and we know same thing. ETH hasn't seen weekly consolidation yet. We've got a stair step the last two months essentially and we have to be watching is this gonna be a head and shoulders that forms and leads to weekly consolidation? That's absolutely on the table as a possibility. So have to be watching for that. But you know, it's just, it's set. This is what I call a level from space where everybody can see it and everybody is trading off of it and reacting to it. And so you're also building up pressure where you know, best case scenario, I might have talked about this in the past, but this isn't a good looking cup and handle. But if we were able to bull flag on the weekly. It's the psychology of a cup and handle where you have the resistance level from space, you reject from it and then you blow through it. And that's obviously what the bulls are hoping shapes up. But gotta turn 4000 into support if Eth is going to do anything. Right.
- [46:10]
Scott Melker
It has had so like, you know, on the more fundamental side like it has at least like ETFs are seeing, you know, very steady inflows and sizable. It seems like the interest is increasing. Just doesn't seem like it can break out.
- [46:26]
Dan
Yeah, this is the 3 day ETH BTC chart. It has to be an inverse head and shoulders. We have to get over that double top. If not, it's, it's a loss for the bulls. So at least in the short term. So definitely watching closely because the, you know, the next two weeks into the start of next year, this is going to be pretty telling for eth, but still hanging on, you know, just remaining within striking distance of 4,000 at the moment. Another name I'm watching is Seoul. It's been, you know, doing nothing for the last month, but again this is healthy consolidation. And we're back testing this previous resistance zone, approaching it to try and hold it as support all these resistances. And so for Seoul, you know, I'm, I'm watching this 12 hour channel just as a bit of a visual guy. This has to break bull for a weekly higher low to be set. And essentially, you know, just everybody gets turns and markets as we get rotation around and Soul led the way from the bottom of the altcoins way back when and now it's taking a breather while other names get their turn. And so just watching to see does Soul get another round again. And of course we got to see Soul BTC do its thing. But that's something I'm keeping an eye on. You know, Seoul BTC has a pretty important base of support here as well. So keeping an eye on whether or not Seoul can get some rotation back into the start of next year as well.
- [47:50]
Scott Melker
Hard not to take a serious look at Solana 200.
- [47:53]
Dan
Yeah, and that's the other thing. The psychological 200 level that's being back tested and trying to hold it aligns.
- [47:59]
Scott Melker
So well with everything you just drew and it's like basically the top of the whole range. That traded in basically through all of 2024 after it sort of put that peak in at 200 and whatever seven or something at the beginning, earlier in the year before that long consolidation. I think that you can set a pretty tight stop and take a shot here and take a small loss. So the risk reward of Seoul if you think the market's going to rip further is pretty good.
- [48:23]
Dan
Yeah, there's a confluence of signals as you mentioned. The one thing that gets me that's a little bit hard, it's like, okay, if I'm looking at a, a setup that I like on Seoul, but bitcoin hasn't started weekly consolidation yet and I know it's inevitable. And if bitcoin pulls back, then alts are going to pull back. That's one thing that makes me not go aggressive personally. But you can still. Again, as you mentioned, the stop level is clear and close by. So can take a shot and worth keeping an eye on Sol.
- [48:54]
Scott Melker
Absolutely. Anything else you're watching? I mean, how do you put this in context of the big move in macro yesterday? I haven't even looked. I'm assuming things are bouncing this morning to some degree.
- [49:03]
Dan
Yeah, I mean this is the NASDAQ weekly chart, right? Is this. The world is collapsing.
- [49:08]
Scott Melker
Oh my God, the world's ending. Look at that. Steady.
- [49:10]
Dan
I'm looking for rotation. You know the Mag. This is Mag. M A G S. This is the Magnificent 7 ETF. It just went straight up for two weeks or whatever while that was happening. You know, the, the Dow collapsed, energy collapsed, healthcare collapsed. And so I'm watching to see do we get a shift in rotation? Do we get money out of the Magnificent Seven going elsewhere? Where's it going to go? Well, XLF this morning is one of the names benefiting. So essentially, you know, I have referred to the sucker punch yesterday as you shake up the snow globe and then you watch to where all the little particles settle and when the dust is settling, where is that capital that got flushed yesterday or that took profit in the Mag 7? Where's that going from here? And that's what we're looking for over the next couple of weeks into the end of the year to help answer that question.
- [50:00]
Scott Melker
Love it. I think, I think it's gonna be just fine. Usually get that big overreaction to the, to any kind of news and then we just kind of float back up and it's like it never happened a week later. Holidays are always going to be weird anyways.
- [50:18]
Dan
So I am, you know, the bigger picture, the fact that we've gone straight up in all year, it does make me cautious and prepared for eventual monthly consolidation. So there are spots that I look to hedge my long portfolio and stuff like that. And you know, The S&P 500 gave us a nice little double top before this dump to do that. But yeah, just need to, need to stick with the longer term trends. But also just remind yourself so you're not one of those over leveraged complacent bulls that get flushed out because monthly consolidation will happen and we'll pull back for a couple of months and we just need to be prepared for that in our scenarios, in our game plans.
- [50:54]
Scott Melker
Don't get chopped up using leverage guys. Follow Chart guys of course on AX YouTube. I don't know if I'll be here next week. On Thursday for sure. Not on Christmas. I don't know if you'll be able to make it but I'll be here. Awesome. So we will be here. That's all we got I guess for today. Tomorrow I'll be back with the Friday five again. Give chart guys Dan a follow both on YouTube and on X. Incredible content and a lot to learn and that's all we got. We'll see you guys tomorrow. Thanks Dan. See ya.
- [51:24]
Dan
Let's go.