Podcast Summary: The Wolf Of All Streets – "Bitcoin Crashes Hard | Crypto Bloodbath After Historic Rally"

Release Date: December 20, 2024
Host: Scott Melker
Guest: NLW

Introduction

In this insightful episode of The Wolf Of All Streets, host Scott Melker delves into the dramatic downturn in the Bitcoin market, exploring the underlying causes, potential ramifications, and the broader implications for the cryptocurrency ecosystem. Joined by his co-host NLW, Scott navigates through market dynamics, institutional influences, and regulatory challenges shaping the current crypto landscape.

Bitcoin's Price Crash: Overview and Causes

Scott Melker opens the discussion by addressing the significant drop in Bitcoin's price—from a recent high of $108,000 down to $92,000, stabilizing around $95,000.

Scott Melker [00:01]: "Bitcoin crashes hard from 108,000 just a few days ago all the way to a low of 92,000 before settling in as we're talking at around $95,000."

He attributes this decline to several factors:

• The latest Federal Reserve meeting
• Volatility in the stock market
• The political shift from the Biden administration to Trump
• A classic bull market retracement

Additionally, altcoins have experienced even steeper declines, exacerbating fears of a potential bear market.

NLW [01:11]: "93, 94 now is awful."

Potential Bear Market: Perspectives and Predictions

The conversation shifts to whether this downturn signals the onset of a bear market. While some voices proclaim that the top has been reached, Scott remains skeptical.

Scott Melker [02:05]: "I have seen people saying that they think that this could be the top of this bull market. The cycle's over."

NLW suggests that understanding the new cycle dynamics will require observing the full four-year cycle, emphasizing the interplay between Bitcoin's secular growth and traditional financial market participation.

NLW [02:32]: "I think it’s going to take this cycle, like a full cycle, you know, full four years basically, of having institutions present the whole time to really understand what the new cycle dynamics are."

Fed Meeting and Monetary Policy Impact

A significant portion of the discussion centers on the Federal Reserve's recent decision to cut 25 basis points, which was more restrained than market expectations.

NLW [04:32]: "They are very clearly like we are in a long sideways for now. And nothing is more frustrating for markets than a long sideways in either direction."

Scott highlights that while the rate cut was anticipated, the extent was more profound than anticipated, leading to immediate market reactions.

Institutional Influence: BlackRock's Support

Shifting focus to institutional involvement, Scott celebrates BlackRock's embrace of Bitcoin, viewing it as a substantial tailwind for the cryptocurrency.

Scott Melker [10:15]: "They really get it. Actually, it seems to have just disappeared from the stream. So I will hear where it was uploaded, but I'll show you that it exists."

NLW echoes this sentiment, praising BlackRock's comprehensive approach in supporting both Bitcoin and blockchain technology, thereby solidifying their commitment.

NLW [11:35]: "And so BlackRock, they are speaking about it in, in the same ways that we speak about it. And that's part of what's made it such an interesting and I think exciting moment for people."

Coinbase's Growth and Market Position

A standout segment discusses Coinbase's impressive performance, now ranking fifth globally in exchange revenue, surpassing giants like NASDAQ and CBOE.

Scott Melker [13:21]: "Great tweet about this. Just how much crypto is eating traditional Fiscal lunch."

NLW underscores Coinbase's resilience and strategic positioning, emphasizing its potential to become one of the most powerful companies globally if crypto interest continues to surge.

NLW [14:03]: "I think that's why all of us FTXers were very upset that Sam wasn't happy with the billion dollars of trading fees that were being made a year and had to go steal people's money."

Coinbase vs Justin Sun: Internal Crypto Industry Dynamics

The episode delves into the contentious relationship between Coinbase and Justin Sun, highlighting disputes over Wrapped Bitcoin (WBTC) and governance issues.

Scott Melker [15:06]: "Brian Armstrong and Justin Sun were going at it on X and it's because of this."

NLW criticizes the amalgamation of Justin Sun's influence within the crypto space, advocating for greater industry integrity and autonomy.

NLW [16:35]: "What’s interesting is that it's much less about this sort of, you know, bickering back and forth and much more around whether like this industry is newly emboldened to just say I'm done with, with this sort of ridiculousness."

SEC Developments and Regulatory Environment

Addressing regulatory challenges, Scott and NLW discuss recent actions by the Securities and Exchange Commission (SEC), including Wells notices issued to NFT collections like CyberKong.

Scott Melker [19:16]: "The idea that they taped it to the wall made it worth $6.2 million."

NLW speculates on the SEC's current stance, suggesting a possible shift in enforcement priorities with impending leadership changes.

NLW [20:18]: "It's a bit of a chaotic time...our best hope is that they have been, that they seem tired now for all the losing they've been doing."

Closing Remarks and Future Outlook

As the episode wraps up, Scott encourages listeners to remain calm amidst the volatility, highlighting the potential for recovery and positive developments in 2025.

Scott Melker [22:50]: "Guys, I say just chill, enjoy the holidays and better things to come in 2025."

NLW remains optimistic, emphasizing the foundational strengths of the crypto market and the lingering potential for growth.

NLW [23:16]: "I think we'll be okay."

Conclusion

In this episode, Scott Melker and NLW provide a comprehensive analysis of the recent Bitcoin crash, dissecting market forces, institutional actions, and regulatory hurdles. While acknowledging the challenges, they maintain a cautiously optimistic view of the cryptocurrency's trajectory, urging stakeholders to navigate the turbulence with informed strategies and resilience.

Notable Quotes:

• Scott Melker [00:01]: "Bitcoin crashes hard from 108,000 just a few days ago all the way to a low of 92,000 before settling in as we're talking at around $95,000."

• NLW [02:32]: "It’s going to take this cycle, like a full cycle, you know, full four years basically, of having institutions present the whole time to really understand what the new cycle dynamics are."

• Scott Melker [10:15]: "They really get it. Actually, it seems to have just disappeared from the stream. So I will hear where it was uploaded, but I'll show you that it exists."

• NLW [16:35]: "What’s interesting is that it's much less about this sort of, you know, bickering back and forth and much more around whether like this industry is newly emboldened to just say I'm done with, with this sort of ridiculousness."

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Stay tuned for more in-depth discussions and analyses on the ever-evolving world of Bitcoin, trading, and finance.