Scott Melker (4:32)

Noel, can you hear us?

Noel Atchison (4:33)

Yes. I'm sorry about the tech issues. To start with, I could only hear Mike, which is a wonderful thing to hear. Hi Mike. But I couldn't hear the rest of the apologies.

Scott Melker (4:41)

It's Chinese AI. They heard you say deep seek and they canceled my voice for you so that you couldn't participate in the conversation.

Noel Atchison (4:49)

Obviously I get for being in Europe and closer.

Scott Melker (4:53)

Right, Yeah. I mean, so this has obviously rocked markets. Right. And I'm trying to unpack whether it should or it shouldn't. Right. I mean obviously you get the immediate hey, they're using black market Nvidia chips. This is just like stolen in ChatGPT with a couple little updates. Hard to really know at this point what's going on here, but it does sort of expose potentially the overvaluation of the biggest tech stocks in the United States.

Noel Atchison (5:19)

The overvaluation and the concentration and this is something that you and I have talked about often before and I know Dave has impined on this also. The concentration has been a massive risk. But that's always the case with concentration in absolutely anything. It always increases vulnerability and we generally don't realize it because concentration is convenient until it bites us in the ass, if I can say that in public. And that's what we're seeing here today. It's not just the necessary reevaluation of the expected earnings per share as well as prices as well as capex for the big tech companies, but it's the concentration in the market. However, moving beyond that, this is arguably excellent news. I mean cheaper AI is good for everybody and everybody is going to win what we could see. And this is going to be very good news for all of us watching this, especially you, knowing what your viewers are interested in. This is good for the decentralization of the power of AI and if I may be so bold as to say so, anything that weakens Sam Altman's potential influence is good news in my book.

Dave Weisberger (6:17)

So yeah, I'm glad you said that Noel, because my first thought was oh, here we go again. Stupidity in, in the, in the, in the way the masses are trading. And you know, it's not stupid for Nvidia to go down, although I think that we're going cooler heads are going to prevail at some point. It's not stupid for big tech and, and, and big indices to go down, but it's idiotic for the Russell or small caps or crypto to go down in a sense. But let me clarify. So if you, if there's two possibilities here, we game theory it out, right? So you know, you got possibility one, the this is real, possibly. Number two, this is a bunch of horseshit or let's phrase it differently, there's actually a third possibility that it's real, but it was real because they stole the ip. So those are the only three possibilities. We agree on that. Okay, if it's real and you can train an AI model really cheaply, then that is bad for Nvidia because it means people are going to spend less, you're going to need less chip power, you're going to need less whatever the hell they use. Now of course we have no idea at this point point how much actual compute power these guys used and we have no idea if Nvidia chips were involved. So you don't really know what the story is. I'd be very curious to see to see that. But let's just take the posit and say, okay, it's real, it's cheaper. What does that mean? Well, that means, as Noel said, exactly my thought. I mean that's why you and I have been friends for years. I love the way your mind works. It's exactly what I thought. It's like if you are building a decentralized application, if you were doing anything, it's going to be cheaper and cheaper and cheaper and easier to make this stuff work and it's going to pervade our lives. To quote the great Mike McGlone, it is a deflationary force in the same way that outsourcing was a deflationary force in the same way that automation in general is a deflationary force for consumer prices. Note, it is not a deflationary force for asset prices because that's going to move based upon the global liquidity flying in which it will. And in fact, if anything, if this is real, it will hasten global liquidity to fly in because it means that people who are put out of jobs or whatever are going to put strains on government. We already have multiple reasons to believe that liquidity is on the way and we could talk about that normally on macromoney that's what we'd be talking about. But there's very good reason to believe that that's true. The bond market is telling you that that's that it's likely true. I mean the 10 year is now relaxing back down. It's now at what, 4, 5, 3 something or other and it's telling you, hey, we don't give a shit anymore. So fine, so the government can do what the hell they want in terms of liquidity and I think that's what's going to move markets. I've seen a bunch of posts over the last week. I was skiing so I wasn't following it very carefully about how the expectation of M2 continuing to move higher is happening. So that's if it's real. Now I don't See why that, that crushes bitcoin. Anything, however, can prick a bubble. And we've seen a bubble in meme coins. You know, I saw happiness. He ran. You know, our friend from crypto banter posted his bubble chart this morning and the biggest bubble down was fartcoin, which makes me smile. But you know, it, it's, you could look at it. I mean, I'm looking at my portfolio and you know, I'm mostly bitcoin and Solana, I've said that. And XRP is my third biggest holding. So you know, my portfolio is down, sure, but I couldn't care less. And there's no leverage. I'm not planning on touching that for quite some time. So I don't give a crap. But when you look at what's going on in the market, I mean, you see there's a lot of things with like stupid valuations. So we've talked about this. What's been driving the meme coin market? Well, profits from bitcoin spill out into that. And so what you're seeing is traders lo you know, decreasing their holdings of bitcoin and long term investors who have no intention of selling it are buying it in general. And so that's a dynamic that's going to continue. And there's nothing. And I tend to agree completely with Mike. I think as long as we're in the, you know, I had 92 to 102 as the main range. You know, we've kind of gone above it, whatever, you know, we're quibbling but we're in the same idea. We're, we're stuck there until we see the next leg of real buying, exhaust supply. And people are taking whatever profits they're going to take. And things like this are an excuse for people to either take profits or as we always say, Mike, what do people sell? What they have to what they can, but they have to. And so people, when their market starts going down and markets are closed, they're like, well, do I sell these tech stocks before the market opens or do I sell my liquid bitcoin? Well, you sell your liquid Bitcoin, what does that do? That causes people in crypto to go, oh, and they sell everything. And that's what we've seen. And so, you know, be calm and understand what's happening. So anyway, we talked about the scenarios. If it's fake, this whole thing, this is, this is going to be a bear trap, right? If it turns out that it's complete fake, it will be a bear trap the likes of which People will be whining about markets are rigged and you know, want investigations, etc. And if it's stolen IP, then you're going to see our president talk about it and say, you see, this is why we can't trust them and this is why we need more IP protections and this is why we need more protectionist policies. And this is why my company or this company is going to buy ByteDance, everything will be okay. And you guys are whining about this. It's going to cause all sorts of politics that we have no idea which way it's going to go. Now what do I think it is? I have no idea. What do you guys think?

Mike McGlone (12:01)

So I gotta follow up on that one. First of all, there's always saying in markets that he who panics first panics best. I suggest panic obviously, but I gotta disagree with you Dave, because it's more fun and let's do that and just play that game a little bit. And so first of all, is it real? The deflationary forces from China are significant and very similar to what we saw from Japan, but much more extreme 30 years ago. Just look at EVs and renewables. They shifted, according to a couple of books I read, they shifted almost complete banking focus from housing. We see what's happened with housing that's deflationary towards things like you're seeing happen hit the tape today. And again this is just the things were predicted by Jeff Booth. It's all happening that way. So the king thing I want to rope over to is that 10 year note yield in China, 1.63 severe deflation. I think that US 10 year olds going that way. You look at the other top five countries in the world, their average 10 year notes at about 120 Thunder 30 basis points below the US it's just a matter of time. The one main pillar holding everything up is that wonderful US stock market, which we all know at some point now nothing matters except prices. When they go too high and they go down, it doesn't take any, it just takes a tweak, doesn't need a reason. And is it now? No. But the key thing I'm seeing commodities is every single major commodity with the exception of go looks like they've peaked for good reason. Crude oil's got to go down or Trump's going to get upset. But he has fundamentals in his favor. Copper's look, it's peaked. I mentioned all those. Natural gas, corn, all those. And the key thing I want to really tilt over is I've never, you know, I was really bullish cryptos many years ago and mine was around 10,000 and 5,000 bitcoin. But then I can look in coin market cap and there's only a couple thousand listed. Now there's 10 million cryptos and I run a repeat. A headline I saw this weekend on Bloomberg Coinbase CEO says surge in new tokens making evaluations harder. It's just you got to point out, Brian Armstrong is point out the fact of massive excess of supply speculation. Ease of entry has never been good for prices. So to me that bitcoin does have competition potentially from gold but most notably from all the other cryptos. So this is what I'm really worried about in this space is to look at it and say it's different. Yes, we have the president involved. It might be so extreme now that I'd love to see the same. We get that 10% correction in the equity market and say bitcoin doesn't go much below 70. That would be wonderful. But at some point we're going to get it. I think it's going to happen this year. My chief equity strategy is on top of the stock market needs to go down. It's too expensive and now do we have a reason? Yeah, but it's also the time of year that you make, you get all the new decisions have been made to get long. They all got long commodities, all got long cryptos in the stock market. Now the first month's over, let's get some reality, see what happens. I'm obviously from a commodity standpoint on with this, with the exception of gold, I think they're all going down. And in the meantime, as Dave always points out, knee jerk reaction. So you got to sell a little bit of that store value.

Scott Melker (14:55)

So there's.

Dave Weisberger (14:56)

So I would love to respond but, but I'd like Noel to respond first because I don't want to talk too much.

Noel Atchison (15:01)

I totally agree that. Thank you so much Dave. You are the best. I totally agree that it is being sold by those that are selling, you know, want to take, take some weight off anything when they can. But that's mainly from those that have always seen bitcoin as a risk asset. Many of the long term holders, and I know there are at least two on this call, we're not, we're not deterred by this. We still believe in the tailwinds and we can respectfully disagree with Mike that it's heading down to around 70. If it did, that is the almighty buying opportunity because liquidity trends are positive. As we can agree on. And I believe that what we've seen from Deep SEQ is going to add even more power to the move towards greater liquidity. Because what is Trump's potential reaction? We've seen that tariffs aren't going to be effective here because it is precisely the blockage of sending Nvidia chips to China that encouraged, shall we say, some experimentation with what they had on hand. It is that that has driven this breakthrough. Necessity being the mother of invention, tariffs aren't going to work here. They're not going to stop China's innovation and potential lead in this. What will? More expenditure on the US Competitive position. We know David Sachs has often warned before about the threat from China innovate, Chinese innovation. He's spoken about this often. He's also spoken publicly about how tariffs don't really work. So what can he do? Get more money thrown at the problem. This is going to be good for AI because there's a lot of clearing out of barriers coming. There's a lot more incentivized investment coming. And this will also spill over into the other main technology under his purview, which is going to be crypto. And this is even before we get into the impetus for decentralized services.

Dave Weisberger (16:39)

So I need to jump on top of that, because that's exactly right. And we've had the, probably the single best politically obvious demonstration of just how horrendously bad government regulation is over the last few weeks. So in California, there was this press conference with Trump who made, of course, the mayor of California does a great job of making herself look like a horse's ass without any help. But Trump, he destroyed her. And millions upon millions of people have watched this. The idea of, well, we need a week to clear out debris. We need to make sure of this. We need to protect people. People are, like, desperate to actually go get things done. And people are now starting to get the aha moment that regulation is disastrous for innovation and building. Now, why does this matter? Because if let's go to the is it real part. If it's real, what is going to be Trump's and Elon and other people's response? It's going to be, let's let innovators innovate. Who will be the biggest single beneficiary of letting innovators innovate? Well, it will be tech startups and it will be protocols and companies that are well positioned. Is there anybody alive who knows anything about crypto who doesn't believe that a decentralized crypto model Won't require crypto incentive structures where you can incentivize developers, incentivize users, incentivize people to contribute data, et cetera. Is there anybody live who believes that? You want to understand why you know things like I don't know who the winners will be, whether it be Solana or Sui or any of the other other networks, doesn't matter. But that's going to be a big deal for crypto and crypto companies in the US at the same time. Is any of this likely to be to require the United States to spend less money and print less money or the G7 spend less money or print money? And if the answer to that is yes, okay, Mike, you're going to be right, right if the liquidity spigot dies down. But I don't think that's the case. I think it's the exact opposite. I think what you could see is the next space race and people willing to, as Noel said, throw money at it.

Scott Melker (18:45)

So you could call it Sputnik moment.

Dave Weisberger (18:48)

You combine more liquidity into markets and letting innovators innovate and you're going to see all sorts of weird stuff happening. Sure. Things that have nothing to do with this are hopefully will will drop, but things that are AI related, you know, look, if you're an AI startup now, I hate doing a shameless plug, but I'm going to anyway. So you know, I what my, my one of my small investments is with a AI dog coin that my son and his friends, Sparky Token and you know what he did? Is he. This, this actually happened. You can look it up sparkytoken.com and you can see this dog. So he bought this robot dog from China and realized that the AI interface and the software was awful and he rewrote it and is now teaching the dog new and new stuff and making the interface much better. And you know, whether that creates a community or not, I don't know. You can all check it out, look at it, right? But the fact is that if AI gets cheaper and cheaper and better and better and easier to train, you're going to see all sorts of really interesting things happen on the consumer side at the same time you see innovation. So I look at this in a very interesting way. There are companies, it's like any other disruptive change that happens, there will be winners and losers. And Mike is right about one thing very important, which is the stock market, which is the engine of wealth and the engine of keeping our economy going is so dependent on the mega caps in the stock market. And so many People have their 401ks and mega caps that could be getting disrupted. That's a big deal now if you think about it. And people who go through indexes don't, don't think about it this way. People in the 90s before the Internet bubble were massively overweight. Things like General Electric, which lagged awfully. And so we don't know what will happen. Now obviously if things go completely to the upside on all the smaller stuff, the disruptive stuff, then yeah, people will do okay. But there were some very bumpy rides along the way and people do not remember. It's like it's really hard for people to understand just how crazy things got before they corrected to create what we've seen since 2009. I mean historically, Mike, have we ever had a period where from 2009 from the bottom of the GFC to now, has there ever in history of markets been this long of a sustained bull market without a major, without a 20% correction? Has it ever happened?

Mike McGlone (21:15)

The only near examples are the 90s and the 50s and they always have had issues. Yeah, right.

Dave Weisberger (21:21)

So we're kind of in an unprecedented time where, and I believe, and I think Noel agrees with this, that it's unprecedented in part because global monetary authorities in the fiat system have been engineering it to be so. And the question is, is how long can they continue? And in my mind the opt out is bitcoin. That's why I still think at some point we're going to get a major D link over time. And I don't know whether it will be because of a strategic reserve. I don't know, you know, what will be the actual proximate cause. We've talked about ad nauseam, what could be the cause. I just think there are people patiently accumulating and eventually those, you know, the crypto community will run out of supply and at which point things will take off. And I still think the four year cycle is intact. I always tend to think that what Scott says is true, that we should just shut the hell up, not do anything and know that yeah, we're have a lot of bumpiness. But at some point we look back and we're sitting in April or May, you know, we're at 160, 170, 180 in Bitcoin and been another upcycle in some related crypto in crypto that, you know, all this stuff doesn't matter. We're just all following this preplanned script now. I'm not saying that's true.

Scott Melker (22:32)

Well look back and go why did we talk about Deep Seek or why did we talk about Evergrande? You guys remember how about byd?

Dave Weisberger (22:39)

Yeah, yeah.

Mike McGlone (22:40)

I mean everybody, Deepseek is just part of the macro here. The world's second largest country that has nowhere near the innovation. They can't. Their system doesn't support it. Why they had to push back on cryptos completely autocratic led more than Mao Chairman and it's going to fall behind virtually guaranteed. You want some of the blame Gearman? But I'm going to follow up a little what they said. I used to agree with you about Bitcoin until what I saw happen this year and now this is massive excessive supply. The massive Hubrina Space valuations and things like Dogecoin and Shiba Inu who can drop a zero off the valuation and still be expensive. I want to tilt over to one key measure right now. $65 trillion. That's the market cap of the U.S. and I look at that, it's the most ever versus the rest of the world. The U.S. is about almost 70% of total market, about 20% of global GDP and only 5% in the population. When Mr. Trump says he's going to make things better, you just can't get much better than that. Maybe you get a little bit and that's that. 70, 60, 70% of the market cap GDP. That's the number one thing that matters. And I want to point tilt over to tariffs. I'm going to take the back the, the. I got to be a contrarian here. One thing about tariffs is profits. Why not so much tariffs is the US offshoring and importing from other countries. I mean remember, I'm the only one here, I think from the, the Rust belt. We call it the Rust Belt for a reason. I've seen it happen and I remember the rules of the 90s in the Clinton administration. Oh, free trade is great for everyone. It's not. We've proved that that when you're the world's largest demand pool economy and you have the world's military, keep the world safe and the currency, everybody else is going to take advantage. There's no such thing as free trade. The key thing I'll point out is one thing the tariffs will do and Trump will do it. If he doesn't, he'll go back in history as President Weenie, which he won't do is earnings. They will hurt corporate earnings. That's the bottom line. Because why did we import so much and offshore and move all my you know, a lot of my friends and family and relatives and ruin their jobs and moving over to Mexico and China was for the money, the profits. That's what's going to happen, I don't think. I think he's starting to realize it and the market's going to pick up on it. So to me, that's the first iteration. Let's get through that corporate profit backup. A little bit of a correction. Maybe it's done. Maybe we're going to be fine. It'll just be another minor dip and we buy into and everything is fine because of all this innovation, regulation. But that stuff takes years. It takes of Congress. It takes a lot of time to work in and things like reducing taxes and stuff. It's going to have to. You're going to have to battle on the Congress for those. It's going to be a. Well, so in the meantime, in terms of markets, like I said, I see deflationary sources from commodities with the exception of gold. If bitcoin drops down, that's a severe deflationary force because what's lifted up everything because it would push back in a Trump administration. That's to me why this used to be a market that used to be number go up technology. Now I look at it, it's the price has to go higher or else in terms of cryptos, and that's just too much risk.

Scott Melker (25:27)

I think we have a situation now, Mike, I would argue, where we have a larger bifurcation than ever between bitcoin and everything else in crypto. I'm definitely sympathetic to the we have millions of coins launching a day argument, but I don't think outside of maybe Trump token that any of that money is coming out of bitcoin. I think that if you look at the total market cap and the market cap of bitcoin, that it's all coming out of other altcoins which are cannibalizing themselves in this sort of washing machine casino that's happening over there. Right? I mean, Trump token at one point was what, 70 billion market cap at the peak 75, something like that. And the total altcoin market cap did not rise and other altcoins were down 15, 20, 30% while that was happening and bitcoin was sort of fine. I think there's institutional money that's coming into bitcoin. Maybe some of it will find Ethereum spot, ETFs or XRP or Solana as it goes. But I would say the bulk of that is just ramping up, is in its own market. And those people have zero interest in fart coin.

Mike McGlone (26:28)

So they, they do, but other people do. And the facts are, and Dave will push back this, that when the correlation to the stock market debate is very high, the highest ever on a day basis yet bitcoin has a much higher correlation to all these altcoins than it does the stock market. So yes, maybe short term we'll get that divergence, continue the bitcoin dominance continues. That would be great. But in the meantime, I think it' just, I've just never seen a space with massive competition, massive excess supply. This is the first one. Yes. Then it has 10 million other wannabes that can just make it and do fine. I just kind of, I'm just concerned now. And also it's hubris of the people are bullish along. It's just, I just don't.

Scott Melker (27:08)

I, I agree with the sentiment. I just don't see them as wannabes. I see them as just these gratuitous cash grabs happening over in the casino while, you know, the gold is in the vault down the road. I just view them as a totally different at this point.

Dave Weisberger (27:20)

Yeah, let me respond because since you invoke my name, I do not believe bitcoin is uncorrelated to altcoins. Okay, let's be really clear. What I believe is in the way that the market cycles are going, it's all about liquidity, it's all about money. And so what happens is when bitcoin rallies, altcoins go up. Why? Because people in crypto who have leverage say okay, I now have more collateral, I can buy altcoins. And when bitcoin goes down, their collateral goes down and they therefore have to sell altcoins and it creates liquidations. And that's what you see. It is a dynamic of a market. It's not a closed system, but it's not that open. That's within crypto. Now at the same time there are exogenous forces. People outside crypto in the far larger is crypto is a puddle where compared to the ocean of the world financial markets and the oral financial markets are all whether it's Larry Fink telling people adopt bravos that bitcoin is going to 700,000 by the way that's kind of an important thing. And these people believe there are more and more believers in the ocean of the world financial markets that are accumulating bitcoin. Now these people are not stupid. You know, people in crypto don't understand just how dumb trading in crypto is. I mean I Founded a company, you know, coin routes. Right. You know, and you know, my son is running this company and we help people buy and sell crypto Spot cheaper than the institution institutional size orders, million dollar, multi million dollar orders cheaper than people buy it by equities. Why? Because of so many stupid traders and cryptos that our algorithms dramatically outperform the buy button and the sell button that people are trading in crypto. I don't care if it's derivatives or if it's spot. Algorithms will outperform and they will outperform more in crypto. Why? Because there are a lot of people who are dumb and they just puke stuff up when they're selling. And when they buy, they just say they want to buy. But the institutional buyers in bitcoin are going to be patient and they know they've already learned their FA's and the RAs are saying, wait a minute, this thing's volatile. Be a little bit patient, average in and you'll do better. And so what you're seeing is smart buying and stupid selling every time you get one of these dips. And then when you see it get ahead of itself, it's like clockwork. I was looking even from the plane coming back from Colorado, I think it hit 107 this weekend, didn't it, Scott?

Scott Melker (29:46)

Yeah, close. Yeah.

Dave Weisberger (29:48)

And I'm like, I'm like, this thing, you gotta fade this if you're trading it. And so traders are like looking at this market like 105.

Scott Melker (29:55)

Yeah, 105 5.

Dave Weisberger (29:57)

The traders look, look at the bitcoin market like Homer Simpson looks like a pork chops and say, okay, great, I can take advantage of these idiots who are piling in at the top. And so you, you can't ignore that dynamic when you understand what's going on. That's why I always say to do a zoom out lens doesn't mean that I'm also not also thinking about how to trade it. But bitcoin is still a play on monetary policy and it is still 1/5 or 1/10 valued. If you believe that bitcoin has reached escape velocity to become digital gold, which, you know, I love the narrative that people are now talking about it was, I forgot who tweeted it. That said if bitcoin only becomes digital gold, it will have failed. Which I think is funny. I think it's actually partially true in a sense.

Noel Atchison (30:39)

That was Jack Dorsey. It was Jack Dorsey who tweeted that.

Dave Weisberger (30:41)

Right? So he's not crazy. And that's kind of what's going on. So anyway, to sum up my point is Bitcoin is going to react to liquidity and it's going to react to the inexorable force of people realizing that they need to opt out of this fiat bullshit. And until that happens, and we are a long way from that, you're not going to get any pushback from government, from any government now, not what you've seen here, not with the Trump administration. And I doubt you're going to see that anywhere else that that's going to matter. So that's thing one, thing two is crypto is right now very, very, very, very, very auto correlated to itself. And Mike is right about that. It is absolutely autocorrelated and people don't know what to buy and sell. The big thing that's going to happen and news over the last week, from what I saw snippets tell me that it's a certainty by the end of the year is you're going to have crypto ETFs, I don't mean Bitcoin, into ETF, Solana ETF or XRP ETF. I mean you're going to see a layer one ETF, you're going to see your index, you're going to see actual index products that people can invest in. Now do I think any, do I think the meme coin ETF that is inevitably going to happen is going to be popular? You know, I, I tend to think.

Scott Melker (32:00)

Not imagine having to rebalance that.

Dave Weisberger (32:03)

Yeah. But understand that this market is getting to the point where people are going to be able to trade this crap through their brokerage account and that is just not priced in in any way. And I'm not sure what will happen. I'm curious what you, what you think, Noel, because it's a certainty that that's going to be the case.

Noel Atchison (32:21)

Yeah, it's definitely not priced in, not just in the United States. We haven't even really begun to see the impact of the recent spate of executive orders and the regulatory clarity that's coming through. And that main impact is institutional grade services. I mean, sure we have some, but we haven't yet got the big name banks offering crypto custody. That's probably going to come any day now. And that gives not just protection to crypto, it gives comfort to the really big investors who have not yet seen it, an asset class worthy of their time. That's in the U.S. the world's largest financial market. That's very important. That's not priced in. We're not taking into account the change we're seeing around the world. We're seeing, as you mentioned, a scramble at the global level to catch up with the US Jurisdictions such as the European Union were taking their time because they figured the US Was far away from offering some institutional regulatory support to this. Well, they were wrong. We're still over Asia just since the beginning of the year. We've seen announcements from Japan, from Thailand, from Malaysia, from Indonesia, from pretty much everywhere that have been looking at this over the years. They are now scrambling to approve ETFs, they're scrambling to approve tokenization services. They're scrambling to prove regulatory clarity. And let's face it, crypto is a global asset. Unlike many of the other risk assets that people can trade, they are global. Bitcoin is exactly the same in Ankara as it is in Seattle.

Scott Melker (33:43)

Last week had to be one of the craziest in the entire history of crypto for the news cycle. And I take for granted that on Monday, macro Monday. We haven't discussed a lot of what happened last week. I think you just brought up, worth noting, the biggest story of last week, which was not even the executive order. I think it was the SEC without executive order, the SEC themselves canceling crypto accounting rule SAB 121. We've talked about a lot here. I'm sure everybody at least is superficially aware. But that will allow the biggest banks and custodians in the world to custody Bitcoin, as you said, without counting it as a liability on their balance sheet, which will lead to the full suite of financial services that we have on every other asset, like lending and yield and borrowing. And that's going to send. But like I said, that shouldn't matter for far coin, right? That matters.

Dave Weisberger (34:31)

What it matters for is, I mean, the biggest banks were always going to be able to offer it because Gensler was giving them the sweetheart deals of come in, kiss my ring and I'll let you do it. But what this is, this is Hester and Mark basically saying, listen, you know, if you are, if you. We're going to have one rule and that's going to be it. And if you want to offer this stuff, offer this stuff, we're going to try to come up with a regulatory regime around it that will ensure people's safety. And it was irrespective of whether you donated millions to your favorite political party or our friends of the SEC chair. And, you know, I know that sounds horrible. And that's because the Gensler administration, the Gensler Warren administration was horrible. It was the ultimate Club. And as much as people want to say, the amount of people, it's funny, the amount of people lately that are willing to say, oh, my God, we dodged a bullet with this election. When you have Stephen A. Smith saying he was a fool for voting for Kamala, when he sees what with a rot that's starting to come out. I mean, there is a lot of stuff here that people don't realize how bad it is. I mean, you know, Nick Carter has done an amazing job, you know, helping, you know, to expose choke point. But when these hearings get started, you're going to see some unbelievable crap. Like I saw this weekend redacted, the fda, there are people, the fdic, who covered up what they were doing in a way that makes the Watergate break in, cover up.

Scott Melker (35:53)

They changed the entire website. Did you see that? You can look at it from a year ago and you can look at it now. And they just pretended it never happened. What they viewed as high risk. Yeah.

Dave Weisberger (36:02)

It makes it almost inconceivable that crypto, that anybody in the United States is left. And by the way, it wasn't just crypto. They also were debanking gun shops and gun owners and businesses and debanking legal marijuana places and debanking anything that they found that they didn't want. And so, you know, that kind of force applied against an industry when it relaxes, it's not going to be zero. You're not going to have, oh, okay. It's okay. No, this is. There will be an equal and opposite reaction. It's physics. And that equal and opposite reaction has not happened yet. Now, that doesn't mean by far coin. Okay. It doesn't mean by Trump coin either. Either. It doesn't mean by meme coins. It means if you can our founder and you have or you believe that there's value being created in an asset, then buy it. Because there's going to be possibilities. And that's why index funds are going to get very, very popular this year. And you're going to see them.

Mike McGlone (36:58)

So let me, let me piggyback on that a lot. We agree with the reason we. And it was on my first idea launched the Bloomberg Galaxy crypto index in 2018. Four was exactly that purpose. The benefit about an index is it has a survivor bias. I mean, there's obviously 10 million cryptos, but if it just tracks the top 20 or 10 that do well, it survives over time. I think that's a good way to track cryptos to be long in the market, long term. But the key Thing I have to push back on is when you make statements of facts based on your perception of the future that do not fit with the past of non income producing risk assets, which this is. These are non producing risk assets just like gold and ETFs. Gold's total market holding in terms of ETFs is 220 billion. It's been stuck there for couple years. We've had outflow for four years particularly because bitcoins had such consignific inflows. Right now we have Bitcoin ETF holdings around 140 billion. It's much more volatile, it has no income. And the things I've learned in my lesson in commodities is every FA in the planet. So yeah, great, where's the income? Where's the returns? Now you're telling me otherwise I want to see the beat. So we've only. And then they'll go do their due diligence. So we've had 2022, the S&P 500 was down 9%. Bitcoin was down 64%. 2018, SB 500 was down 6%. Bitcoin was down 73%. They'll do their net and due diligence and say yes, great, let's add this portfolio portfolio is to our portfolios of risk assets. We're just adding risk, a lot of risk. It's positively, highly, positively correlated history of to the beta s and P500. Just the fact. Just want to point that out. Those are two key facts. When people tell me the opposite who are trying to sell products, I say sorry but I've learned that lesson in commodities is most people say at the RIAs and say yeah I want that, that income I can get from something like a XLE in terms of energy or in terms of gold or anything in that space.

Dave Weisberger (38:44)

And, and, and I kind of want to hear Noel, but two very quick points. Point one indexes in crypto, not bitcoin are going to be those, those tokens. Those assets are going to rise or fall based on people's perceived ability for them to based on their TVL or based on the income generation that will cause supply burning or whatever. Whatever the mechanism is if you can give. If those assets do return value to the shareholders. It's the joke with Solana. Do you want to own the casino or do you want to own the. Or do you want to bet at the table? Yeah, but that has nothing to do with bitcoin. Bitcoin is a separate thing. Bitcoin is an option. Bitcoin is an option with an asymmetric positive return. And my brother's an fa, he's a financial advisor and I talked about him a year ago and now he has clients calling up saying, listen, what should I put of my portfolio in here in this positive option? And the positive option means that when you look at things like you look only at the down years, that's one way of looking at it. Another way of looking at it is to zoom out and look at the correlation of Bitcoin to the stock market over the last 15 years and you get a very different answer. And so we talked about this ad nauseam. And Noel, what do you think about that really quickly?

Scott Melker (39:57)

Also before Noel jumps in, I should note that all of these index funds that are coming or many of them a they will have staking because Peirce has made it clear that Ethereum will have staking. So there will be yield associated and we are 1000% going to see them blended with stablecoins earning yield to make sure that there's some underlying mechanism there and hedge the way that we're seeing yield on USDC and USDT and all these things being created in DEFI and beyond are going to be part of these index products. So you're going to see blended things, 70% Bitcoin with a 30% USDC earning yield, things like that.

Noel Atchison (40:31)

And that's even before we get into Bitcoin yield, which we are going to see some big moves on this year. And who knows if that ends up getting wrapped in traditional wrappers. But I'd like if it's okay since we haven't got that much time left to take a step back and ask what you all think about the timing of the move. I mean, the deep seq R1 came out on Monday, so why did we have to wait until this weekend for things to throw a total squiffy? My, my working theory is that it's not just deep seek that people are freaking out about. Sure it's relevant, especially given the concentration as we've talked about, but Colombia is not totally insignificant in the shift in mood either. The spat between Donald Trump and President Petro of Colombia over the weekend where he threatened to slap 25% tariffs because he was pissed off that Colombia wasn't going to allow the planes to land and then it worked. Colombia walked back pretty fast. That adds to the uncertainty. And this ties in a little bit with what, what Mike has been hinting at, that Bitcoin is a safe haven asset as well as a risk asset and arguably Going forward with this kind of degree of uncertainty, not just on the effect of tariffs but also on currencies, the demand for a liquid hedge against the uncertainty is going to be increasingly important in the theses that we are going to see emerging from not just the retail investors but especially institutional investors around the world. Many people were overlooking the fact that Colombia's largest export to the United States, oil.

Scott Melker (41:55)

Noel, I also because you brought that up you sent an article that sort of relates right which is obviously here. Energy's holy grail may soon be reality. A global race is on to produce cheap, virtually unlimited and environmentally friendly energy via nuclear fusion. China's at the forefront. I mean they literally created as you can see something on earth reached a temperature of 100 million degrees Celsius, seven times hotter than the sun and lasted for 18 minutes. This also just happened during that time. Mike, this has to be on your radar. Noel, obviously you sent this. Noel first unpacked this but then Mike, your thoughts?

Mike McGlone (42:26)

I mean what this does it's a matter of time. I look at my 2014 Chevy Volt. It's a plug in hybrid. It's 11 years old now. I can get that same vehicle twice as good, much better vehicle at half the cost. It has three to four times the range in China now from BYD. That's why the US and the Germans and the Europeans have to have 100% tariffs on these vehicles. Why is Germany heading towards recession? Why is Volkswagen and Mercedes and all these internal combustion producers getting hammered? The technology is shifting rapidly. Bitcoin is a big part of that. The difference is bitcoin is in cryptos are currencies are highly respective digital assets. And that's the way I look at is bottom line simplistically is I think the whole space in cryptos will be fine as long as the US stock market keeps going up. And that's the problem. Maybe it's going to just have a couple years where it's not make a record high, you know stuff that used to happen and this is we're at that stage now it's complete no known everybody in the planet, even children get how expensive the US stock market is. It's just how long can it stay here? Can Mr. Our new you know, saviors keep it expensive? It's already expensive so that's why I look at it just expect more and more deflation significant deflation from China. Jeff Booth predicted it and but what does that mean for highly respective digital assets have valuations that are just silly. Okay people tell me it's great for bitcoin I get. I agree. But I've just never seen the whole space go down with bitcoin going up. I've never seen the stock market stay down with bitcoin going up. And Dave, you're right, it's outperformed for its only 15 years around. But remember it was born of massive money pumping and financial crisis. The best way to really look bitcoin since futures started in 2017 I think because that's when it brought in the ability to hedge and brought in the real hedge funds who really run them. You know, the hot money which I see in commodities are just very bar.

Scott Melker (44:14)

Nice $5,000 bounce this morning on bitcoin though. We're back.

Noel Atchison (44:18)

Exactly. I'm going to disagree with Mike, respectfully disagree with Mike on two things there. One, Bitcoin is not pure speculation. It is also a technology. Bitcoin is the token that represents a new technology. The big difference is it is a technology that is accessible to invest in for anyone anywhere in the world. Unlike most new technologies which are limited to the wealthy accredited investors. Bitcoin is a new technology and I know many investors personally who are investing in it on that basis. Al and I raised my hand in that group as well. And two, the assumption that China is always going to lose when it comes to technological innovation. That's why I shared this article on energy. Up until now, the longest anyone was able to get that nuclear fission fusion was 6 seconds and China managed it for 18. And the technology is not necessarily worse. We don't hear about it in the Western media because of prejudice, because of bias, because of the assumption based on ancient history that China is cheap and therefore lower quality. I also subscribe to the South China Morning Post, which regularly has on its top headline major achievements from the science from Chinese scientists, largely because 1 they actually do have funding and 2 they don't have the red tape that their counterparts in Western economies have. And sure, maybe part of that is exaggerated as we can probably see in the op ed that I shared earlier. But not all of it. The truth is probably somewhere in the middle. We can't be lazy and assume that China is not going to to change the way we see technology. We saw this with artificial intelligence assuming deep seek is real. And I think we're going to see this in energy as well. I will agree with Mike and I say this grudgingly because I used to disagree with Mike on this, but I'm not coming around to his view that yes, this is going to be Deflationary.

Dave Weisberger (46:02)

Well, deflationary for consumer prices, yes. I think that people, you know, you can't, if you have a major disruption that are affecting jobs. Any real politic president who want, who understands, I mean, you have literally Elon Musk sitting next to Trump in the Oval Office talking about this stuff. And if you think he isn't telling him, listen, we need to unleash American innovation and we need to allow merit based immigration as fast as we possibly can to get more of these top people in here and see the ones who don't want to be in a tyrannical regime. I think you're crazy. I mean, you know, they see this stuff. I mean the Columbia thing is exactly the point. I mean the gall of the Colombian president not taking back their own citizens that they dumped on us was ridiculous. And under Biden they would have been, okay, fine, whatever, you know, they wouldn't have done anything. Trump was like, no, and who won? And if you think that the world doesn't understand that, that he doesn't give a shit right, about what people think, he's going to do what he thinks is right for America. And frankly, as an American, I'm happy as hell that he did it. I saw this story and I saw, oh, that's not going to play well. And I'm watching it. And then it didn't play well. Then finally they offered to use their own presidential jet to take back people and said, okay, fine. Because at the end of the day, the things that matter to this administration are going to have happen. They're going to do whatever they can. And one of those things they want to have happen is America to lead in technology and not be hamstrung by Elizabeth Warren's Senator Karen stuff saying, okay, you can't do this because we need to protect people from what you're doing. The ethos, if you put David Sachs in the White House, what you're basically saying is the ethos of move fast and break things is now going to be American. What would define American exceptional? And people who studied history know that that's exactly what happened. Right? You look at the Industrial Revolution, look at the history of why the US is half, literally half the world's investable assets are here despite being 4% of the population. It's because we used to have an ethos of move fast and break things. And that's coming back. And to ignore that, yes, I guess in a sense that deflationary for consumer products, yes, but it's not deflationary for, in terms of money supply and the dollar is still going to be the denominator. And that's why we have these, these different differences. So we can unpack this as much. I know. Scott, you want to talk about MicroStrategy also today, which is another.

Scott Melker (48:36)

I do. Well, it's funny because we talk about the strategic Bitcoin reserve and what might be coming. I mean, maybe Michael Saylor is just the strategic bitcoin reserve at this point. I have no idea. They bought another billion dollar 10,000 bitcoin. A billion dollars 105,000 cost basis. Let me bring it up. Right. And they're now announcing another, another unique strategy for creating more stock, raising more money, buying more bitcoin. For anybody who didn't see this, I don't know that we need to unpack it, but pretty astounding what MicroStrategy is doing right now. But I want to link that into another thing. Is Mike Noel, I think both of you said kind of Bitcoin 70,000, 75,000 people keep mentioning it. That number I've now seen five times this weekend. A lot of people predicting that's going to happen. Arthur Hayes, I love his work. Not sure he's ever been right, but. And I'm interviewing him tomorrow but you know, he gets these hyperbolic predictions. Double top to 75,000. Link that to MicroStrategy. I don't know what his cost basis is. It's probably here 64. I mean, if we see Bitcoin at 70,000, we have a major narrative shift. If we're within 10% of Michael Saylor and MicroStrategy's average price cost basis, I mean. Noel, what do you think of that?

Noel Atchison (49:49)

I haven't crunched the numbers on MicroStrategy, I confess. But the sinking feeling, the instinctive feeling that I'm sure by many is that this could be a risk should he need to unwind for whatever reason. However, given the structure and given the intelligent financial engineering he has behind it, I suspect it's a lot lower than 75. That may be where his last purchases were. But let's face it, he was going to be averaging, which he can then it's a lot. It's a lot, lot lower. And Bitcoin would really need to tank for it to be a danger. So while the fear could accelerate any downtrend, I don't think it's a real danger just yet. Although definitely, to be clear, I don't think.

Scott Melker (50:24)

I'm not saying he gets liquidated. Those were nonsense narratives in the past. I'M just saying that the public perception of what MicroStrategy is doing, how it relates to bitcoin, the asset in general, if he's not in a massive profit, becomes very different.

Mike McGlone (50:37)

So let's follow up on that a little bit. It's easy to say, hard to do. From a leveraged hot money standpoint, Microstrategy is an ideal thing to buy when it's at a somewhat of a discount to Bitcoin. Now it's an extreme premium and he's adding liquidity, he's adding supply to his base of equities and buying Bitcoin. So to me that registers to me as someone who's got the ability to do his hot money. I'll sell a little MicroStrategy and buy a little Bitcoin. Because MicroStrategy is very expensive now and he's increasing his float. I mean, just look at the fundamentals here. Sure, he's buying Bitcoin, but that peak we put in MicroStrategy back in, it was really high in November. That's, you know, it's versus Bitcoin. Just look at Bitcoin, Bitcoin ratio, it's very, you know, very dicey. To me, this is an ideal spec. But now the problem is IT architecture, it's just too expensive. If that's what I hear from people who have like counts with Vanguard and they can't buy anything with cryptos, which is still silly. See, oh, they want to buy MicroStrategy. I'm like, oh, please be careful with that one because you're buying it. It was like buying GBTC when I was up 20% above Bitcoin. When it got to drop to that discount, that was the time to buy it. Just that's the key thing to be careful about here. And then we also have those lessons in life is never put all your assets in one, your risk in one asset. He's doing that and thinking, saying it's the right thing to do. And people say it's the right thing to do. I'm like, good luck. But I just, bottom line, I have to point out is this is this macro thing theme of we are just one morning a little bit of a backup in the stock market. This is nothing. That's what we have to get through. We have to have this asset that everybody says so great. I used to agree, it was so great until it got too expensive. I just think it's too expensive proves that it's just not leveraged beta. Not just the asset, the whole space and that's why I tilt over. The number one traded crypto is tether. And then there's all the other U.S. dollar crypto. Crypto dollars. I still completely believe in the technology, but we did have a lot of history of new technologies pumping up asset prices really high and then dumping technology is overwhelming, which is what's happened with the Internet.

Dave Weisberger (52:37)

Could I share my screen for a second just to. Because I love to. Let's get this one here.

Scott Melker (52:43)

Dave, I also just wanted to mention, as you're doing that, that of course, which is something you're, maybe you're about to point out, but the minute we were down at 97, funding rates went negative.

Dave Weisberger (52:52)

Right, of course. And we bounced.

Scott Melker (52:54)

$65,000. Yeah.

Dave Weisberger (52:55)

I'm going to say two things before I look at this chart. First, nothing makes me more bullish than hearing everyone calling bitcoin to drop, you know, 30%. That makes me like incredibly bullish. And nothing makes me more bearish when everyone says it's going to 250,000 like me, I, I prefer to be contrarian. When I'm not contrarian, I get nervous. Doesn't mean it's wrong in either case. But I'm happy about that. Now, Mike basically made a statement. He said, well, it's too expensive nav. Well, that's the orange line. If you're, if you're a chartist and you see down here, and you know it's gone to up here before, I mean, yeah, you know, maybe you don't want to catch a falling knife, you know, if it's, if it's on the value trap. But this is not expensive. In fact, by eyeballing it, it's toward the bottom of the range of its nav. And now he's doing it in preferred structure, so it's not to be selling common shares. So honestly, you know, right now, in terms of microstrategy versus Bitcoin, if you, if you think bitcoin is going to have a, a major rally, it's a really good point of entry as opposed to a bad point of entry. So just, just to saying, you know, it depends on what you think, and I'm not saying go buy MicroStrategy and, you know, mortgage your house to do so. That would be insane. What I'm saying is if you want a little bit of leverage, well, there are people, crypto, who do that shit. So, you know, you have to make these things. I don't want to do that for bitcoin.

Scott Melker (54:14)

Saylor told people to do that for bitcoin. Last cycle, by the way.

Dave Weisberger (54:17)

Well, I mean look, you could make an argument that if you think something's gonna go up 5x, you know, house is gonna go up. If a house goes up 2x like my house in New Jersey over 18 years is basically doubled, which is not really that great if you think about it. You know, if you make an argument says you should rent and use the your capital to buy something that's gonna grow more. I mean you can make that argument. Personally, I think people should be prudent with their finances and have enough liquidity to live for a couple of years and know where, you know, make sure that they're not taking a risk that they're out on the street. But that's a different story story. But this chart basically makes you look at orange line. It's like microstrategy still happily in its, its normal range. Yes, we had that blow off when bitcoin was going up. But ask yourself what's going to happen if bitcoin does go on a big rally and breaks out of the range. And you know, that's all I'm trying to say. There's. Yeah, it's done it in the past and it could do it in the future, but now is not anything particularly horrible.

Mike McGlone (55:14)

Dave is you're looking at just from an. I'm more of an outsider now because bitcoin, sorry Bloomberg has asked me to and I'm telling you, Abby, the podcast I've been listening to and watching for decade. Well, not a decade, about half a decade now. The extreme bullishness is most I've ever seen. Okay now there's a few people like Scott point out it's the most I ever seen. And that just brings up my contrarian Ben, I have to admit it curse of being a contrarian, that's helped me do great in 2008 and 2000. But yeah, and just of course contrary. When everybody's bullish, which I sense is now extreme bullishness, most notably our president, then you have to just find alternatives. That's. I'm not that complicated about it.

Scott Melker (55:53)

It's only getting more interesting. That's all I can say. I can't wait to just keep talking about this every Monday. I mean it's crazy like I said that the news cycle was so insane last week that we didn't even talk about the executive order or any of the other Trump things today because we had so much to talk about with just China and bitcoin price action and predictions. It's really like we're living in a simulation, I think think and deep seeking. The rest are only going to increase that feeling as we go. Noel, we absolutely love to have you. I wish we could go for longer. It's 1003 here. For those who are interested, I do obviously host Crypto Town Hall Twitter spaces at 10:15am Eastern Standard Time. And today we have Roger Veer joining, and this could theoretically be his last day of freedom. And he is obviously pleading to the White House for a pardon, no longer technically a United States citizen. So there's a lot of nuance there. But many viewing him sort of as the person who's taking yet another major target on behalf of the entire crypto industry, like Charlie Shrem was in the past, or even John McAfee. And so the tax evasion charges for him, very, very interesting and something worth discussing. So I would say maybe check that out, if that's interesting to you. Go ahead, Dave. You look like you have something to say.

Dave Weisberger (57:07)

No, I just happen to have a conflict this morning with another meeting, but if I get off that, I'm gonna jump on because. And I'm definitely. I'll listen to the tape for sure, because I definitely want to. Yeah.

Scott Melker (57:15)

Yeah. Perfect. All right, Mike, Dave, Noel, it's been wonderful. Thank you to everybody. Sorry we ran over time again. We're getting bad at that. But we appreciate all of you joining and listening. See you next Monday from Macro Monday. Thank you all.

Noel Atchison (57:28)

Good talking to you all. Thanks.

Dave Weisberger (57:29)

Bye. That's dope.