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The Wolf Of All Streets
Bitcoin Crash Alert: Could $70K Be the Next Painful Stop?
00:43:55
Bitcoin Crash Alert: Could $70K Be the Next Painful Stop?
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- [00:01]
Scott Melker
Are we having fun yet? Bitcoin crashed as low as $76,500 yesterday before getting a nice bounce. But obviously nobody thinks that this is over because they're very panicky and always fearful and think we're going to 70,000 or lower. Is this all a result of expectations being too high for Trump and the crypto market? Is this because of tariffs? Is this because of market uncertainty? Is it all macro? We have so much to unpack. The good news is that we brought in Jeff park from Bitwise today to make us all feel really stupid. So I'm looking forward to feeling like a kindergartener who's confused by an advanced math professor in college alongside my friends Andrew and Tillman. Let's do it.
- [00:54]
Jeff Park
Let's dope.
- [01:07]
Scott Melker
Let's do what is up, everybody? I'm Scott Melker, also known as the Wolf of all streets. Before we get started, please subscribe to the channel and hit that like button. We have a lot to talk about and most of it is price action and why none of us are having fun staying poor. We were promised a Trump stock market that would go up 40% a day. The Bitcoin would be $150,000 in the first hundred days or else would be a failed presidency. Instead, we're getting some sort of austerity from Doge, threats of tariffs, unthreats of tariffs, rethreats of tariffs, bigger tariffs, smaller tariffs, and generally insanity and market uncertainty. Is there a plan behind it or is Trump just throwing things at the wall to see what sticks? Tillman's not here yet, but we got Andrew and Jeff park from Bitwise. Jeff, you were not in the background when I said that we were a bunch of kindergarteners that were going to basically listen to a college professor give us a lecture on the economy as you being the college professor, us being the kindergarteners. I won't play the 40 year old virgin clip again this time. But listen, just talk first about this price action here, right? I mean, we take a quick look at CoinMarketCap, we've got Bitcoin around 81,181. Interestingly, that's only a 2% drop now on the daily chart. About 0.5% on the hour, but it had a nice bounce after going down to 76.5. Then you take a look at Ethereum and Doge. I mean, these things are down 10% in the last 24 hours. We're seeing a serious cleansing of the crypto market alongside obviously one of the worst days we've seen in Legacy markets. I mean the Nasdaq was down roughly 4% yesterday. That's not a joke. You're talking about $1.5 trillion in market cap erased there. What do you make of it?
- [03:11]
Jeff Park
It's brutal. I'm sad to see it as all of you guys are in the price action we've been hoping through this year. The thing that I feel is really different this cycle versus the priors really ultimately comes down to the fact that we have a lot of institutional investor type capital in the way that the ETFs represent potentially that have entered the market. I think about this a lot where a lot of the bitcoin price action can sometimes be just determined by profit taking behavior. And the reality is these ETFs are still up a bunch since launch. It's up a lot. It's still up almost like close to 80, 90% since inception of its launch. What that means is from a cost basis perspective, there's a lot of people who are healthily in the money, but it's going to hit that IRR CAGR type number in which they're going to have a benchmark for where they feel like they got enough juice out of it, right? So if you think bitcoin CAGR should be 35%, maybe within two years time frame around 70, that's the number in which people are going to reallocate out of bitcoin to something else. They're going to feel like there's going to be a better cost of capital for. This is like a fundamental tension that all institutional investors ultimately have when they want to have best ideas of their portfolios on an opportunistic basis. And when you have the equities market sell off like this, what really is happening underneath the hood is that investors are realizing the cost of, of capital in owning bitcoin has gone up because there's actually a lot of other things you might want to own at these levels of dislocation, which has nothing to do with what you think about bitcoin at all at this point. It's a question of, hey, like I loved Tesla when it was up 100%, now it's down 50. Maybe I want Tesla instead of bitcoin and those trade offs are going to be made. And so it's not surprising that equity weakness of course is correlated to crypto weakness from those perspectives. And in that sense I do believe right now it is all macro. The only thing that really is driving bitcoin day to day at some level is the price action in which volatility of non crypto assets is actually detracting away from Bitcoin's volatility. And frankly, it's a tension economy now that we're post the SBR episode.
- [05:33]
Scott Melker
Yeah, Bloomberg agrees. I just wanted to show this. It's one of the articles that I had. Here you go. Traders search for havens. As usual, stock sell off rattles nerves. People are just looking for greener pastures. Right. And maybe this is the time when people actually go full Mike McGlone, as we say on Mondays, and start actually buying bonds. Maybe they believe that Trump is going to force Powell's hand and continue to force rates down until we get cuts and things just collapse in that direction. I think there's this tension between whether it's Trump's madness, like, you know, him just saying what assuages his ego on any given day, like 10:25, no tariffs, like, you know, basically just puppeteer with everybody on the strings and that there could actually be a master plan here, which is that Powell said, I'm not cutting rates until the data says so, and Trump's going to give him the data.
- [06:27]
Jeff Park
Yeah, yeah, no, that's totally right. I think we're all learning day by day and what Trump's ultimate coherent vision is in the terrafor that he has launched. And I would say recently, the thing that has become a little bit more clear for me, and I'm curious what you guys think, is that it's actually not as coordinated as one could have thought a well, strategically thought out plan might be. It truly does at times feel like it is. Let's see what sticks and create volatility for the sake of creating volatility. And the moment for me that became more clear was when Trump actually threatened Japan. Last week, Trump accused Japan of manipulating the dollar yen without, I think, maybe even truly explaining the phenomenon of why the dollar yen behaves the way it does in relative value versus US risk assets. And threatened that he would put tariffs on Japan if they manipulate their currency like China. And by the way, China and Japan are very different in the ways that the FX markets exist. So you kind of have to imagine there's literally no upside that comes from that behavior. We can talk about the upside of tariffs to Canada and Mexico and definitely China, but Japan is one of those things where it's almost hard to see what you would extract out of that, given the financial relationship. To me, it became a little bit of a moment to recognizing man. He really actually doesn't maybe have a totally cohesive plan. He May not even really have like an end game of the protectionist world that people are imagining that could unearth in global alliances. And really, it's just quite simple. He just wants to create as much volatility as possible. And that's actually a very. If that's the case, like bad market for Bitcoin for all the reasons we described, because there will be value elsewhere in those scenarios.
- [08:24]
Scott Melker
Yeah, Andrew, I want you to jump in. But, you know, a lot of people have noted that it'd be one thing to be doing tariffs, it'd be another thing to be doing Doge. To be doing Doge and tariffs is a lot for the market to absorb. Right. Because Doge people can call it what they want. I believe it's a form of austerity, by the way. I believe it's something that has to be done. Like, I do think that we need to cut government waste and we need to have transparency. But you also have the understanding that you can't necessarily campaign and saying in the first hundred days everything is going to go up, it's going to be the best market ever, while also proposing something that has to send the market down. So I think it's just a lot of confusion. And we know markets hate uncertainty. So this isn't even necessarily being critical of his policy. This is the time to rip the band aid off if it's going to happen, because it's the only time it can happen and not affect any elections. So if there's a massive plan, this is when it has to be done.
- [09:17]
Andrew
Yeah. At minimum, you know, returning to 2019 levels. Is it, Is it as it pertains to both spending and then the size and scale of government and certain size and scale of employees at different, you know, different levels of government. Yeah, that's a reasonable way to look at adjustments to the growth of government spending of government. Now, you know, everybody on this panel today would agree that there's probably a better way to message that, a better way to go about doing it. That's a, that's a little more muted, a little more action and a little less bluster. But that's just not who Trump is. Never has been, never will be. At the same time, volatility is here, volatility is here probably to stay. So the best investors are unemotional about adjustments and changes and then how the markets react. They stay completely on top of and as in front of as they possibly can, that volatility and do not care about the whys, the hows or the what's they're adjusting to make money based on the adjustment to the markets and the adjustments to the landscape. They don't see Trump as something to have an opinion about. They see Trump as something that has come into the markets, made an adjustment, a wave has hit. And what are the ripples of that wave? Where do those ripples go and how do they benefit? So, you know, Jeff put out a tweet yesterday associated with, you know, adjusting processes and time frames and thoughts and then action associated with where we're at with volatility and specific to Bitcoin and specific to, again, risk assets. How do you act as a unemotional investor focused on returns to benefit from where we are right now? And, you know, the, you know, to me, the money line had to do with, you know, Bitcoin, ETF options and where we're headed, you know, with those options associated with, you know, a commodity that has a. A cap supply that. That's never existed before. That dynamic has never existed before. And so, you know, what does that, what does that opportunity mean for potential investors who are doing their best to be unemotional and to benefit from where we're at? To me, that's that. That. That's the nature of the best investors, is being unemotional, seeing the field for what it is, and then making plays on that field as it lies. Right.
- [12:01]
Scott Melker
A lot of people are pointing. I agree with that. I just want to say. Sorry, Jeff, a lot of people are pointing obviously to the national debt as a reason that he might be doing all this, to force rates down. Listen, I think he wants to force rates down just because it'll make assets go up and rich people get richer. And that's the benchmark of a great presidency in his mind. But Obviously, there's also $7 trillion of debt that's maturing in the next year that everybody been talking about that. I think I'm looking it up. Average rate, I think of financing on that debt right now, about 2% to 2.5% weighted. Obviously, taking $7 trillion of national debt and taking the interest rate from 2.5 to 4.2, not great for our debt spiral. So that would be a serious master plan if that's what's behind it. Many pointing to it, I have my doubts, but I do think that's important that rates are lower whenever that is refinanced.
- [12:56]
Jeff Park
Absolutely. Absolutely, I agree with this. And even then, I would caveat an asterisk, which is there's one thing that even Trump cannot control, and that is Japanese rates. And what we're seeing in the past few weeks is Japan is having a very tough time placing their JGB bond auctions. Their 10 years did not succeed in placing out their optimal rates. The five years that they rolled the week after also did not settle at the prices that they would want for. This is a problem because if Japan cannot place their JGBs in rates that then are funneled into the US economy in the way that it allows cheap borrowing, then the actual Ponzi of the global carry system itself unravels. And so this is actually something that nothing can be done even by Trump alone in creating US turmoil. And it's singularly the most important thing that macro investors are watching because of that exact nature of it all. And I really do look at Bitcoin on the other side of this as the most optimistic trade that one can have. If you do believe the unwind of the global carry system represents a new monetary order in which people will rebound their expectations on a price specia mechanism, going back to hard assets as supporting a valuation metric for floating FX rates, that Bitcoin would serve a central role for it. So the long term picture of Bitcoin has never been stronger actually. It's just that the path to get there is now becoming extremely volatile because people are waking up to this reckoning. And I think the SBR is a little bit of this moment where you could have almost imagined a beautiful bridge to make that happen. But of course it would have always been practically challenging in the way that Bitcoin always takes a long time for people to really wrap their head around and take that risk. And it's especially hard to take that risk if you're doing it at a public capacity. This is the other thing that I've mentioned. I've been pitching Bitcoin for years and it's one thing to pitch to high net worth and family offices because they're selfish and they're motivated to make money off their own capital. So if they believe it, they'll buy it. It's another thing to pitch to public officials where basically you are making them the decision maker in a very public and transparent way of an investment decision for which you may not have a lot of control for ultimately right the price of Bitcoin, but receive all the backlashes in the event that things don't go well. So this is what I call classically your short of put like you're literally exposed to unlimited downside in making that choice, but you get very little upside participation. Because even if Bitcoin does go up. It's not like the public officials participate on a profit share, right? They're managing public programs. And so if you think about what the strategic reserve ultimately represents, I mean that's as a public vehicle, as you could ever imagine, from the executive order in which there's discretionary decisions made by individuals. And you have to really think about that incentive alignment. It's very hard to get those kinds of entities to buy bitcoin and it's especially hard to get them to buy bitcoin when it's high or trending higher. And so it is one where I think people have a lot of expectations for what it might do in the future. I know people are focusing on the wording to say that there's actually more actions to follow, but I do think that people should have adjustments not just based on these wardings and legal docs, but really human psychology. But at the end of the day, psychology will explain most behaviors of how institutional investors come into bitcoin. And it's very challenging as a public well.
- [16:36]
Andrew
And to Jeff's point, it's what I mentioned last week, Scott, trying to move a strategic bitcoin reserve in a more controlled and via the architecture of the way the government actually works, congressional approval, trying to do that through those means speaks directly to Jeff's point. Like you have a two person Republican controlled, two seat Republican controlled House. What is the upside, so to speak, to voting for a strategic bitcoin reserve that is actively buying bitcoin and has been given the stamp of approval by Congress and then the Senate and then two years from now you're having elections and where is bitcoin at that point? Is it markedly higher? Is it markedly lower? That's a risk that a two person Republican Senate is probably looking at and saying, I don't know if I, you know, how am I selling that on the trail when I'm trying to get reelected in 18 months? You know, what, what's the downside risk? And looking at the chart of bitcoin and knowing what it does in cycles and saying pretty good chance that this thing may be a little bit lower in 18 months than it is today. Again, not, not understanding the processes and, and having all that stuff associated with bitcoin price movement, you know, there's going to be folks that aren't going to sign on and rush to go do that type of legislation because there is downside risk. Now take that proverbial downside risk and move it to states, move it to, you know, education boards and you know all the things that are happening across the country. There is, again, from a legislative standpoint, there's, there's more risk involved than we as bitcoiners see. And Jeff does a good job of explaining that. But when you've got a two person advantage, you know, in the, in the House, makes it very, very difficult to push something through. And Cynthia Loomis is seeing this right now. Very, very difficult.
- [18:40]
Scott Melker
Yeah, she looks exasperated. Yeah, she talks about this at this point. She thought it was going to be a layup. And she's like, I don't even think.
- [18:48]
Jeff Park
Yeah, it never is. It never is. It never is. Because it's not the rational choice. When you involve humans in the ways that they have accountability in their decisions, it's not always seeking for the maximization of the right choice. There's a lot of other motives that come into play. Look, at the end of the day, I actually think that you can believe that bitcoin is challenged in the short term, but as a result, the long term opportunity is even more incredible. And I know sometimes this creates a little bit of mental incongruence like Jeff, how can you be bearish on bitcoin but also bullish on bitcoin? That makes no sense. But literally, if you think tariffs are ultimately creating all these volatilities in the ways in which that there is going to be further liquidity to come to market, which I think we all do believe that is the end game with what Trump wants to accomplish with 10 year rates and with JGBS and with China's liquidity issues right now, we are going to go past all time highs. It is almost a guaranteed outcome. And now what you have is actually this coiled spring because price is lower. And that's why to me, the most amazing trade right now that I'm trying to enthuse to people is to take the chance of buying very long dated, very out of the money calls. Because these are the things that you don't have to be super specific about in entry levels. Right. Because it's so out of the money anyway that the delta isn't moving so much on the basis of whether it's 77,000 or $81,000 today. But it's almost like your dollar cost averaging, the perpetual strip of like a two year option because of the fact that you make a decision once and you can actually then not have to think about it and try to be cute about executing all the lowest bids in this crazy market. Most investors cannot do this. Most retail investors and even professional Investors are not day traders. And so if you want to capture the convexity of what you think could be in a two year time frame of Bitcoin's ultimate destination, this is a gift. You have the chance to buy these things when Bitcoin's at 70k, then 100k and you can get two times the leverage now that you could have gotten two months ago. So it's entirely possible to be bullish and also express that we can be a little skeptical in the near term that this might be the better positioning.
- [21:10]
Scott Melker
I set bids in the 70s, I think in like November when we broke the set and I failed yesterday at 77, but I had also failed at 79 and 82 to be fair. But we broke that all time high from earlier in the year and price went flying. And just even from a technical perspective I was like, I want to be there if this thing gets retested as support. Not that it has to, but I want to be there. Right. So I still have bids actually down like 74 and kind of that area from those previous. Hopefully they don't fill at this point. To be quite honest, I would just rather go up from here. But to your point, Mike McGlone yesterday once again said it was the first time he said this. He said, I think the top is in for bitcoin. And either James or, or Dave was like, you mean for now? He's like, no, like the forever top basically or the like multi year generational top. Like crap.com bubble. 17 years to come back.
- [22:06]
Jeff Park
Interesting. What was this two sentence summary of that view? I missed it. So I'm curious.
- [22:11]
Scott Melker
I mean he's long thought that we're in the midst of the great reset, right. And that this is just things tilting back and it's just about to get disgusting and that bitcoin is in his opinion the tip of the risk spear and therefore will lead everything down and continue to. And he was making the art. I love Mike. He was making the argument that last week we were all talking about SBR and bullish and things can only go up and that was the biggest sell signal ever. And I said to him, well, hearing that we're never going to get a higher bitcoin price to me is the biggest like bottom signal ever.
- [22:49]
Andrew
Yeah, it's, it's, I mean that, that view has been parroted about every four years for the last 12 years. So you know, it's, it's a, it's not that crazy of you from traditional financial minds, you know, tradfi minds look at bitcoin and look at the cycles of bitcoin and they simply do not see what we see as folks that are believers in the asset and the way that the asset acts and reacts and makes its moves. For example, just in a micro way. Does anybody. I was surprised to wake up and us be at 81. Why? What happened? Nothing happened. There's absolutely no. Was there news at 3am That I was unaware of that pushed Bitcoin from 76, 77 to 81? No. So therein is kind of that went to bed.
- [23:50]
Scott Melker
Futures for stocks were terrible. I don't know.
- [23:52]
Andrew
Yeah, that, that's kind of the point is that, you know, Mike has to ignore some really significant macro stuff associated with bitcoin. Mike is basically taking the other side of Larry Fink. I mean, I don't know if he's comfortable doing that, but Larry thinks we're going to 5 to 700k. He's general again. And every time I say that out loud on a show or just to myself, I'm kind of taken aback. Larry does not make price predictions, man.
- [24:28]
Jeff Park
Is Mike an equities investor or macro investor?
- [24:30]
Scott Melker
Mike is the head of commodities at Bloomberg.
- [24:33]
Jeff Park
Oh, interesting. Got it.
- [24:35]
Scott Melker
And I mean, ran money for decades and was on the trading floor, as everybody in the audience knows that story. But he's been like, you know, he's been long bearish. I mean, I had this argument with someone yesterday, similar but, but different on X, who was. I was basically arguing for dollar cost averaging. Prices are going much higher. And they were saying, look at the chart and try to predict and we're crashing and you'll buy at 50. All those same things. And my point was like, as an investor, I think bitcoin goes much higher. And he said, you know, hey, well, why is Warren Buffett in so much cash? Then when I said that, the point I made, sorry to be less eloquent, I said the richest people in the world have never looked at a chart, have never even heard of technical analysis. They've just bought stuff over time and let it go up. Right. Like it's not that complicated. And that works better for bitcoin than anything else. And he basically made the argument that we should all be using technical analysis to trade. And look, Buffett's in cash. Isn't he a genius? And I said, Buffett is a genius, but he also missed the entire like.com run and has been going to cash while the stock market has made a historic run here and missed this entire thing. If stocks drop 30% more Buffett might be right.
- [25:50]
Jeff Park
Yeah, yeah, yeah.
- [25:51]
Scott Melker
Raised all that cash. It's just like, I don't see the arguments. Everybody's so concerned with the short term and you just buy this thing. Just buy.
- [25:59]
Jeff Park
Yeah. And you know what? Rich people love Bitcoin. Not because they're depending on the value of bitcoin itself as a way to sustain their lifestyle, but because the volatility of bitcoin is so high that even harvesting some of that yield is so lucrative as a base asset that it could fund your own lifestyle. It's basically like a dividend. And look at how abysmal rates generally are and dividends are even with value stocks. And literally with bitcoin you can actually own a chunk, never sell it, and do some clever financial engineering around it by engaging in call selling or cash covered puts and generate double digit yield that will literally fund your retirement lifestyle. And so these folks are not even worried about the price of bitcoin in a way that they're saying they need to sell it. No, you hold it because the yield on these things itself is so cash flow positive. And once people realize this, which is that volatility is the reason why bitcoin generates these yields and is maybe one of the most orthogonal source of yields away from everything else we know in global macro. There's value there. I'd have to imagine someone like Mike can see through that.
- [27:12]
Scott Melker
I would take that a step further. Jeff and Andrew, I know you love to talk about this, but for those who don't understand how to utilize the option market to make yields, what's coming and already exists, if you use a company like Abra that Bill Barheit runs or something is you can just take your bitcoin and take a 30% loan. LTV Very safe. You need Bitcoin to drop 60, 70% just to even start getting liquidated. And as long as that variable rate is floating between 7, 10, 11%, which it does. If bitcoin over a long period of time performs better than 7 to 10% a year, which it has since inception, that's a loan you literally live off of. If you, if you had a $10 million in Bitcoin and you're rich and you take a $3 million loan, you literally never pay back. Ever.
- [28:07]
Andrew
Yeah, exactly right.
- [28:08]
Scott Melker
Bitcoin goes up, you never pay a penny of that loan back in your life and it only becomes less risky as the price goes up and you could draw more if you don't believe you'll get an 80% retrace. From wherever you've drawn. And that's simpler.
- [28:26]
Jeff Park
Yeah, I mean this is how Zuckerberg got a 0% mortgage rate pledging his Facebook shares as part of his pool. That was First Republic, I suppose at the time that people were like, how is this possible? And it's because asset rich things can also generate yield in different ways. One thing I should also mention, Scott and Andrea, while we're here together is today's actually the inaugural day of launch of our bitcoin standard corporations ETF. And you'll see the news having come out 30 minutes ago. You guys are the first person I got a chance to share this exciting update which is that look, markets can be crazy and today it's obviously nuts. But one of the beautiful things is there's a lot of dislocations as a result in the equities market, including names like Tesla which happened to own a bunch of bitcoin on their balance sheet, as you know. And what we're trying to accomplish here with the Bitcoin Center Corporation ETF is really enthuse that all the companies that are innovative today, mission aligned about the future, understand the value of bitcoin. And if you're able to invest in an indexed rule of companies who own bitcoin on their balance sheet to the methodology that we've described where they have at least 1,000 bitcoins on their balance sheet. I think this is actually one of the more interesting and clever ways to diversify your bitcoin risk while having that as a core lever to think about driving returns where there's going to be additional second order effects of innovative companies in general that are going to drive returns in different ways. That's not about just the bitcoin price action alone. I'm super pumped and the Bitwise team is super pumped to see how this index is going to develop over time. And already I think we're accessing names in global companies that US investors would have a very hard time being able to participate. And that in itself I think is extremely valuable.
- [30:07]
Scott Melker
I mean, I have a bigger theory for why markets might crash. I don't know if you guys agree, but this is it. The market sell off shouldn't scare investors. Look at them, you know, God love him. But, but seriously, we are seeing a bounce today, I think. I mean I really like bitcoin here to be honest, but I was saying that in the low 80s, but all of my kind of signals are screaming, to be honest, even technical. There's like RSI is massively oversold across the board Tesla, I think, is the most oversold by the way it's ever been. There's bullish divergences, which I love. We've got fear and greed at max pain. We start talking about. I saw, I saw recessions and depressions usually at the bottom, and we're not going to get a recession.
- [31:04]
Andrew
Yeah, I, I saw a clip this morning. Somebody clipped it from, you know, several years ago when Bitcoin was at 8, 000 and Mark Yuska was on CNBC. And they're like, you know, what are you talking about? Are you gonna, you know, bitcoin goes to 5,000. Are you going to be buying more? And he's like, absolutely, yes. And the point that he made that I found most compelling is every year bitcoin makes a lower high. Every single year, since it's existent, bitcoin makes a, a lower high. And, and that's kind of the point here in terms of, you know, bitcoin price action. We can get, we can get, you know, all up in its business on.
- [31:39]
Scott Melker
A, on a higher, lower, lower high. I just want to be clear because.
- [31:43]
Andrew
Yeah. Huh.
- [31:44]
Scott Melker
You said a lower high. You mean a higher low.
- [31:49]
Andrew
Maybe it's, I don't know, lower high, higher low. But the point being is his, his, the point he was making is that, you know, every year bitcoin is, is again making a. Okay, higher low, lower high, higher low, whatever you want, however you want to say it. Yeah. Is that, that his, his point being is that there's, there's, there's all different ways to have a reason to, to buy bitcoin and to continue to buy bitcoin and whether it's technical, whether it's macro, whether it's. Larry Fink says, so there's an immeasurable amount of reasons to do it. You know, again, Bitwise's new product, you know, the, the, the corporations putting bitcoin on their balance sheet is not just a trend, it's a mega trend and it's going to continue. So they're, they're going to have lots of choices to make of companies to put in that index. That index is going to grow and grow and grow and grow and grow. Yeah. So it's, if you're a retail investor, you know, should I get in. What's the level that I should get in? Just get in, you know, just get in and continue to get in. Because, you know, over the course of time, over the last decade, every single dip for bitcoin, no matter the size of it, has been for Buying every single one. Every Single one down, 80, 50, 40. Every single one has. Has been for buying. And we've gone higher since then after every dip. Every single one.
- [33:17]
Scott Melker
Yeah. 100% agree. I just like, if bitcoin is never making another high, I'm just like, jump. Throw me out the window.
- [33:30]
Jeff Park
That's what I'm gonna go to. Yeah. Get severed and just send my indie to work at that point.
- [33:35]
Scott Melker
Oh, my God, that show, you know, like, I watched that show. I watched Severance. This last episode, though, almost lost me. I was like, what are we doing here?
- [33:43]
Andrew
I can't.
- [33:43]
Scott Melker
But that's probably not the discussion worth having. It's funny. I'm looking at my Twitter thread. I'm gonna let you go in like, two seconds, Jeff, but. And like, you know, we tweet, like, all the kind of big economic news. It's so bad. Yeah, it's hilarious.
- [33:59]
Jeff Park
I'm with you guys.
- [33:59]
Scott Melker
Market slide yesterday, the billionaires who attended Trump swearing in. I don't know if you saw the picture. It's like, you know, Zuckerberg and Bezos and Musk, all in the picture. They've lost $209 billion combined. And that's just those guys, right? Delta CEO, corporate consumer said that it's falling. I don't know if you guys saw, but I think they adjusted guidance, like, 50% down for Delta. Like airlines, Solana revenue plunges 94% from January highs. I mean, even my own feed is making me want to buy stuff because it's so bearish.
- [34:27]
Jeff Park
Yeah, very bearish. Yeah, very bearish.
- [34:30]
Scott Melker
Well, I guess we'll have to see how it all resolves. Jeff, congratulations on the launch today. That's absolutely awesome. I actually was. Oh, wait, dude, can I ask you one more question? Sorry, I have to ask Jeff another question because you're the king of strategy. MicroStrategy, I.e. strategy, comes off the sidelines with 21 billion preferred stock ATM offering. So Saylor didn't buy anything last week. It freaked people out, obviously. We know the Forbes jinx Strategy shares down 30% since he was on the Forbes cover. But what do you make of this new offering? I mean, with MicroStrategy, I think 60% ish off the highs. Mid 50s, 55%, something like that. I mean, is there going to be an appetite for all this right now?
- [35:13]
Jeff Park
Great question. Of course, this is just a shelf in the ways that you don't have to fill this capacity. And they'll manage it as they go, you know? Look, I stand by my initial thesis on what drives MicroStrategy's valuation, I have not budged, which is there's three things that matter. One is the actual absolute volatility level of MicroStrategy matters. Two, interest rates matter to the extent that the arbitrage becomes more possible when rates are low. And the third thing is that the finance team really needs to understand how to dynamically manage the capital structure. I do think that STRK is the best security of the capital structure today, hands down. And so there's implications when that's the case, what it means to be in a capital structure. So I'm very curious how ultimately the team is going to use this pref issuance to drive the interest for the common shareholders. Something I'll be watching very closely. But I still continue to think that STRK is the most compelling security in the microstrategy capital structure.
- [36:22]
Scott Melker
Perfect. Thank you for that summary. It's going to be interesting if prices do continue to go down to see what happens with MicroStrategy. Not that I have any concerns, I just think, what's their cost basis now? 62,000. If we start sniffing that, we're going to see some crazy news stories. Another side story I saw, by the way, is that apparently the Ethereum foundation just got leveraged long Ethereum at a massive rate. I can't confirm if it's true or not, but they're usually the ones selling the top, not leverage long in the bottom. So that's a really interesting story as well. But I do need to let Jeff go. Andrew and I are going to continue the conversation for a couple minutes. Thank you, man. Thank you everybody. Give Jeff a follow. See you hopefully every week, man. Love having you on.
- [37:03]
Jeff Park
See you next time. Yeah, same year.
- [37:05]
Andrew
Thank you.
- [37:06]
Scott Melker
All right, Andrew, thanks to Jeff obviously for being here. Want to talk about buying the dip and doing it manually?
- [37:15]
Andrew
Yeah. So, yeah, what, what have we been talking about the whole time? The whole time we've been talking about bitcoin price? When do you buy it? Well, I think, you know, I was, you know, I was pounding the table in the low 80s and we went to low 70s, we could go to 74. Those are all things that you've said on, on this, on this call today. And it's literally the perfect conversation for the bitcoin algorithm arbitrage strategy. It, it makes decisions for you in real time while you're sleeping. Like, look at that execution at 81. Right? Look at that execution down at 77, 78. So you're making decisions. The algorithm is set up to make decisions for you if you want to be long. Bitcoin and removing all the emotions. Right. I, I, you know, every time I've come on to talk about our Bitcoin algorithm and as well as our Ethereum and Solana algorithms that you all get for free when you sign up with us, I get, I get really excited. The reason why I get excited is because you can't find it anywhere else. And at the same time, the emotional quotient associated with Bitcoin and owning it, not owning it, and then when should you own it, when should you double down, when should you buy more, when should you sell a little bit? These conversations are ubiquitous across bitcoin and crypto. Twitter forever. Forever. It's, it's the dominant conversation. And when you have a tool, an institutional level tool that does that for you with the click of a button, you don't have to sit in front of your computer, you don't even have to look at your phone when you're sitting in the movies with your family. This all just happens for you in ways that you can't do by yourself. Right. You simply, you simply can't do it. And it's an extraordinary product. It's an, it's extraordinary technology that's been siloed with institutions for years and years and years and it's now literally at your fingertips. And so the ability to buy at 77, the ability to sell a little bit at 81k, it's exactly what Jeff was talking about. Rich people, they like to create yield, right? A lot of different ways to create yield. This is a way to create Yield by buying 2x the amount of Bitcoin that you sell every time there's a trade that happens. So you're accumulating Bitcoin in the long term. But just like early this morning, you're selling a tiny little amount. You're selling $260 worth in our stock parameter settings. So you made 260 bucks on Bitcoin today. You also made it about four days ago at 94. Yeah. So, so you're making yield on your Bitcoin on a weekly basis and benefiting in a big way from this volatility. When volatility hits, our ARB strategy is, is a godsend. It's an absolute godsend. You're making decisions with an algorithm and you're not having to think about it. There's no thought. It's all happening for you.
- [40:17]
Scott Melker
Yeah.
- [40:17]
Andrew
And again, it just so happens to be free. Right.
- [40:22]
Scott Melker
It's a very Good price free. What was it doing on Salon on Eth, by the way?
- [40:27]
Andrew
Essentially doing the same thing. You know, the parameters are when we're, when we're down 2 1/2 percent, it's, it's buying. When it goes up 2.1% or more, it sells a little bit. So the parameters are exactly the same. It's just following that volatility. You know, it's following that volatility and, and taking it where it goes. So if you're down 2 1/2% again, there's a buy that happens. If you go down another two and a half percent, another buy that happens. Right. So it's stacking for you in whatever move is happening at the time. If it goes up 2.1% again, you sell a tiny amount comparative to the amount that, that you're buying. So archpublic.com people should go get involved with the product. It's free. The first 10,000 transactions every year are free. So if you're only using this for $10,000 of transactions every year, you're going to be able to use this year after year after year after year for free. Absolutely free. So go do it. Engage with it and allow a tool to do the things that institutional level folks do. And your, your, the algorithm is going to be better than even they are. Right? It's going to be better than even there.
- [41:39]
Scott Melker
I mean, how long have we been doing this now? I mean, not even just this, but Arch, how long have we been.
- [41:43]
Andrew
11 months. 11 months.
- [41:45]
Scott Melker
11 months.
- [41:45]
Andrew
Yeah. Been doing this for 11 months? Yep.
- [41:48]
Scott Melker
Yeah. I've never heard really any complaints.
- [41:52]
Andrew
No, no, it's a we. Again, I can't stress this enough that when, when you, when you take something like this and you put it in the hands of retail, it takes some time for them to get their minds around it. But when they see that they can do an algorithm inside an algorithm inside an algorithm inside an algorithm, and now they're doing things with Bitcoin that they couldn't do even if they're sitting there at their computer. It's an aha moment. For most people. It's like, wow, I can't believe I have this in my hand. I can't believe I'm able to use this. All right. I can really execute without being just scared out of my mind that something bad's going to happen. Yeah, it's a, it's a, it's, it's pretty awesome stuff. Really is.
- [42:33]
Scott Melker
It really is. It really is. Well, Tillman ghosted us today. Here Guys, you can check it out. But they, you know, Tillman is behind this website somewhere so archpublic.com he goes those Jeff's. Amazing. I have to run. So today is going to be really interesting. It's funny because so you know, with Tripto Town hall it's become basically just me. Even though Mario and R get to like have their faces on it and stuff. Yeah. So I was like, who can. Who would be really entertaining to co host because I can't do it today. Dave Weisberger. It's going to come to. Is going to host. Is going to host Town hall today. It's the first time we've had a non me host. It's going to be amazing. I can't wait. But I can't do it today because I'm actually about to interview Richard Tang, the CEO of Binance at ten. And that's the only time they could do it and couldn't pass on that one. So that'll be an awesome interview. That'll come out on Sunday and I've got Sergey from Link tomorrow. Like oh wow man.
- [43:25]
Andrew
Love it.
- [43:26]
Scott Melker
Awesome. Yeah, can't wait. All right guys, so check out Arch Public. I gotta run. Go get ready for this interview and I will see you tomorrow. Thank you, Andrew.
- [43:33]
Andrew
You bet.
- [43:34]
Scott Melker
Later.
- [43:36]
Jeff Park
Let's do that's dope.