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The Wolf Of All Streets
Bitcoin Crashes Hard | Crypto Bloodbath After Historic Rally
00:23:36
Bitcoin Crashes Hard | Crypto Bloodbath After Historic Rally
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- [00:02]
Scott Melker
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. Of course, this has a lot to do with the Fed meeting, what's happening in the stock market, the transfer of power from Biden administration to Trump, and of course just classic bull market retracement. But of course altcoins also really taking it on the chin suffering much worse than bitcoin. Some calling for a new bear market saying the top is in and it's all over. I doubt that's the case. NLW and I are gonna unpack all of this and the major news that rocked crypto markets this week on the Friday 5. Let's go. 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. Hit the like button. Gotta bring on NLW right now. Checks price bad. Price.
- [01:11]
NLW
93, 94 now is awful.
- [01:14]
Scott Melker
Yeah, it's, it's horrible.
- [01:15]
NLW
I mean I was just recording a far out prediction show the growth of bitcoin future about how we're never going to see five figure bitcoin again. And here we are.
- [01:26]
Scott Melker
I mean it's like that. Yeah. I mean, didn't say. Wasn't that always Ryan Selkis? You know, I can't believe this is the last time we're going to see bitcoin below. I don't know where he got it, but I just.
- [01:33]
NLW
That was one of my favorite Zelkis memes. He really, he really leaned into that one.
- [01:37]
Scott Melker
Yeah. And I'm sure he did it again and I just missed it. But here we are, $95,000 to your point. It's kind of like the squid grow meme or any of the memes where it shows like an ugly girl and a hot girl. 95 on the way up looked really attractive. 95 on the way down. We're going to 5,000 or 0 or maybe it's over.
- [01:54]
NLW
Yeah, well, you know, it's interesting. Are you seeing any of that sort of discussion or is it just generally sort of like the vibes are, you know, we wanted a little bit more Santa Claus and, and you know, Powell stomped on our fun.
- [02:05]
Scott Melker
I, I mean I have seen people saying that they think that this could be the top of this bull market. The cycle's over. But I have not seen people, to be fair, calling for $12,000 Bitcoin or anything crazy. I think the, the craziest ones I've seen, which are not crazy technically, are people saying, you know, mid-70s, maybe it goes into, you know, the low 80s, something like that. And to be frank, that would be just the classic 30% bull market drawdown that we've seen countless times on the way up.
- [02:33]
NLW
Yeah, I think one of the really interesting questions I was just discussing this in that same show is 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. Because you now have the competition between bitcoin secular dynamics on the one hand, and all those sort of forces that contribute to that. And on the other hand, the sort of normalization that comes from participation in the financial, you know, the traditional financial markets. And those two forces are at some points going to be running at cross purposes with one another and it's not going to be exactly clear, which is sort of, you know, winning and exerting more influence. But it seems likely to me that bitcoin still is more cyclical than, you know, and crypto generally is more cyclical than other traditional assets, but it probably has a lot of the hard edges shaved off. And so we don't know yet how to recalibrate our expectations of a down market. Is a down market 50% now instead of 80%? Is it 30%? That'll be one of the big questions, I think, to learn over the next few years.
- [03:33]
Scott Melker
And we don't learn that until we see how much volatility might be dampened to the upside as well. Right. Do we get a two time cycle instead of a three and a half time cycle, which used to be a 15 time cycle, which used to be hundreds. Right. Obviously. And I think a lot of the reason for some of the downtroddenness, if that's a word, is that altcoins have just suffered so badly. Right. Yet another thing that happens in bull markets. But if bitcoin goes down 13, 14%, you see the big name altcoins going down 30, 40, I've seen some that are obviously going down 50%. But even Bloomberg saying pullback deepens as US ETF suffer record daily outflow. But this is a classic bull market and let's just dive in. Why? Right? Said exactly what he was supposed to say, said exactly what we anticipated that he would say, said exactly what everybody on the planet thought he would say. And the pain is real. So what's going on when, when they cut the 25 basis points said, you know, inflation's a little bit sticky and we'll probably cut a little less next year. I think everyone was anticipating that. And here we go.
- [04:33]
NLW
Yeah, I mean, I think that the people were anticipating it, but it was starker, I think, than they thought. Right. So it's in September, the dot plot showed something like four rate cuts next year. Markets were kind of predicting something on that order, you know, three, three or four. And, and, and it looks like after this meeting that it's maybe as, you know, maybe two, but, but not even guaranteed to get that and certainly not early in the year. And so it is, you know, look, this. I think that this should have been more expected. I think a lot of the smart commentary after was we should have anticipated to this more. To me, what clearly came through in this was so people tried to, the, the reporters in the press conference after tried to pin Powell down about whether this is an anticipation of Trump policies being inflationary.
- [05:20]
Scott Melker
Right.
- [05:21]
NLW
If that was the specific reason that they're concerned. And he said, no, it's about a new administration just means more unknowns. Right. It just means that there's less known. And so the fact that there are less knowns means that it's. We have less clarity on what we're going to need. We're in a pretty good spot right now. And effectively they're, you know, they feel like they're in a fine place in terms of how restrictive things are in terms of where the labor market is. And so steady state holding for them looks fine. And so until they have more information around what future policies are actually going to look like, the default is to do nothing. And unfortunately, markets just don't want them to do nothing. You know, so this is, We've talked about this before. Anytime Powell gets to do less, it's. He's the happiest in the world.
- [06:07]
Scott Melker
Yeah, it all makes perfect sense. And I think that that probably tells institutions and others, maybe there's a good time to book some profit going into the end of the year.
- [06:17]
NLW
Totally.
- [06:18]
Scott Melker
You're up so massively this year. I mean, bitcoin sitting over $100,000. You can't tell me there's not a lot of people sitting out there saying, maybe there's some uncertainty coming. I bought this at 20. It's a good time to just take a little off the top.
- [06:30]
NLW
S and p is at 24 or something for the year. Nasdaq's at 31%. Like, it was a good year. People aren't stressing when they, when they take a step back and certainly I think you see a lot of that profit taking behavior happening.
- [06:40]
Scott Melker
I think what will be interesting is to see what inflation does obviously over the coming months, because if inflation continues to rise as it slightly has of late, it's going to be very hard for them to continue cutting.
- [06:53]
NLW
Yeah, yeah, it's, it's, it's gonna be a, it's gonna be a. I, I think that the, just the, the story of this, I mean, they moved also their, their projection for when we actually get back to 2% from the end of 2026 to the end of 2027. So they are very clearly like we are in a long sideways for now. And nothing is more frustrating for markets than, than a long sideways in either direction.
- [07:17]
Scott Melker
Yeah. Have just remained so incredibly bullish that even reducing your bullishness slightly meant that a sell was likely here. But there are a few mega bears out there. Well, actually mega bulls that have temporary mega bearishness. Arthur Hayes predicts crypto, it's a harrowing dump around Trump's inauguration. So you don't have to read the entire thing. He's effectively saying, man, we've priced in the highest of expectations for Trump and what he'll do for crypto. And if those things don't start to happen really quickly when he's inaugurated, we could see a harrowing dump. But we're sort of harrowing dumping as we speak, so maybe we're preempting that idea.
- [07:54]
NLW
Yeah, I do think that there's a little bit of a recalibration and we had seen something like 11 relentless weeks following the election. You know, I mean, 11 weeks in a row of, of inflows that were sort of, you know, creating new records basically every week to the ETFs. So I, I do think that there's a, there's a chance that this actually looks like a little bit of a recalibration that does take the edge off of some of that. I don't think Arthur's wrong that we had, you know, that we have very high expectations specifically, you know, the, the, the chatter around a bitcoin strategic reserve has increased so massively over the course of December. That's the thing that has the biggest potential to, I think, let people down depending on how it does or doesn't come to fruition. So, you know, listen, a little bit of a reset now isn't the worst thing in the world.
- [08:41]
Scott Melker
Okay, so does any of this, do you think, dampen the 2025 expectations for a continued bull market for bitcoin and a massive alt season to come.
- [08:53]
NLW
I don't know, man. I think it's going to be much more driven by larger factors than we think how much room to run bitcoin has. I do think that given how much of the sort of price action is related now to institutional inflows, you know, the, the way that larger markets play out I think really matters. However, to the extent that there is any sort of reasonable continued support on that, I do think that people are now, they're officially just deciding which of the not that interesting narratives are going to be the alt season narrative because they're so desperate for one that it does. It's not going to have to be all that compelling. Right. And you know, it's like at some point people will be like, screw it, agents. That sounds good. Agents is enough. Like, let's go. And, and so you, you definitely feel that hunger to, to let her rip, you know, at least for some amount of time. But, you know, it's. Nothing's a foregone conclusion.
- [09:49]
Scott Melker
Yeah, it never is in markets. I, I think that it's just funny to see how quickly people turn and change their bias. And I think everything's going to be just fine. And if you've been here before, even if your alts do go down 50, which they have, they can go right back up 50 in the next week.
- [10:07]
NLW
Yeah, I mean there are still a lot of people who are sitting on a lot of profit right now too. So the, the, the ingredients for, for, you know, an alt season are, are certainly there.
- [10:15]
Scott Melker
Yeah. So the, the next story we have is tailwinds and one of the biggest ones has obviously been BlackRock. Right. So as much as we can talk about price action and what the charts look like and what's going to happen, it's hard to dispute the fact that we're in the best position we could have ever imagined at this point. Coming into January 2025, we have the government wholesale supporting bitcoin with the Trump administration coming in. We have BlackRock, the largest institution, financial institution on the planet, basically getting orange pilled and becoming Satoshi Nakamoto in the flesh. And to that end, I'm not going to show the entire thing, but we'll show a clip. They put out a three minute educational video on what bitcoin is and man, they really, 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. Here it is. We don't have the sound, but it's a cute video basically showing all the reasons that we have said for very long that you should own bitcoin. It's really. Sounds like a bitcoiner. Put it out. They totally get it. They talk about the evolution of money. It ends with them saying humans used to use seashells and, and coins and all these things. And it's natural that we would move in another direction, forward. I mean, how big is it that BlackRock is doing these things? It's huge.
- [11:36]
NLW
Huge. I mean, listen, we, we saw this, this is a top down transformation of this organization. When, when Fink started talking about this, you know, there was so much going on that, that it's hard to, or that it's easy to forget that in addition to just supporting bitcoin, he obliterated the sort of, the, the, the, the contrast narrative of, of whether bitcoin was, you know, whether bitcoin was, was the only thing that was interesting or whether, you know, the blockchain was interesting. You know, I remember when he first, when BlackRock first started talking about the Bitcoin ETF and they, you know, he started doing the, the kind of roadshow to build support for it. People kept trying to pin him down with sort of the old conventional institutional narratives like, you know, is it about bitcoin or is it about blockchain and these sort of things? And, and Fink just voraciously said it's all of it. Right. And he articulated a thesis for bitcoin as a hedge against debasement, but also why blockchain was a powerful system for, you know, whatever. And so he clearly kind of had this conversion experience and it's followed all the way through to blackrock. And they're, you know, 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. Look, there, there are a lot of scenarios in which blackrock comes in and bitcoiners are, you know, nervous or hostile because of the, the way that they're, you know, looking at it, viewing it, trying to co opt it, but that's just not how it's played out.
- [13:09]
Scott Melker
You're going to have a lot of people asking you why bitcoin over the coming months and years and into the future. I would say that of all the resources I've seen, if they've got three minutes, this is a video worth sending.
- [13:21]
NLW
Yep. Yeah, it's, it's very hard for people to go Straight to Saylor, let's put it that way.
- [13:27]
Scott Melker
My microstrategy is not doing great in the, in the face of all of this, but I think that's exactly what everyone would expect. But I'll tell you who has been doing great. And that's our next story. Coinbase ranks fifth globally in exchange revenue, surpassing NASDAQ and cboe. Great tweet about this. Just how much crypto is eating trad fiscal lunch. I don't think we need to dig into the nuance and the numbers. I think it's just fair to say that people are trading the hell out of crypto. The volumes are relatively insane, only growing. And this makes crypto exchanges potentially some of the largest, best performing companies moving forward on the planet.
- [14:04]
NLW
I mean, this is 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. On top of that, crypto exchanges make an ungodly amount of money. This is an industry that is an unfettered 24,7 free market bonanza with people who are extraordinarily engaged in a way that even other market participants aren't. And it shows up in Coinbase's numbers. Right. It shows up in exchange volume. And I think that it's still though hard to remember. I think why this story was interesting is that fifth in the world ahead of NASDAQ in terms of revenue is just so insane. You know, like as a company that's been around, you know, a decade or so, it's pretty, pretty phenomenal and I think shows just how, you know what, what a force this industry is.
- [14:53]
Scott Melker
Yeah. You have to believe that moving forward Coinbase, if we have continued interest in crypto, which we will custodying all of the ETFs effectively, that they're just going to become one of the most powerful companies on the planet.
- [15:06]
NLW
Yeah.
- [15:08]
Scott Melker
And listen, I would just one more thing, like I had Raoul Paul the other day, it'll come out on Sunday. But he basically said Coinbase, Brian Armstrong won this election.
- [15:15]
NLW
Yeah.
- [15:16]
Scott Melker
If you look where all the money came from, it was the technologists and the crypto guys who won this election and we'll make sure that the policy is friendly moving forward.
- [15:23]
NLW
Yeah, I mean the Coinbase has been an incredibly well run organization throughout. It has, you know, it has sort of, you know, been through all the cycles. It, it has been the exchange du jour, but it's also been the one that's out of favor relative to others. And it has just persisted and continued to be strong. And it's just an incredibly strong company.
- [15:49]
Scott Melker
Yeah, incredibly strong, but it doesn't stop a little pettiness when it comes to arguments in the public sphere. I don't have the tweet, but I'll pull it up at some point. Brian Armstrong and Justin sun were going at it on X and it's because of this. Federal judge says Coinbase. Coinbase can delist WBTC denying Justin sun affiliated Bit Global's bid for a temporary restraining order. The two of them going back and forth like school kids, which you love to see because this still is crypto Twitter at the end of the day, but effectively, you know, Coinbase launching their own wrapped bitcoin product, cbbtc and taking some issue with their custodians and WBTC and Justin sun and wow, man, watching the billionaires go at it, always entertaining.
- [16:35]
NLW
One of the big questions for this cycle is whether crypto is going to finally tell Justin sun to right off period. Like this is. This is a, a legacy, end of the last cycle type of person. I mean this is a guy who got an article removed. CoinDesk or Coin CoinDesk is in it now because they've had editors quit because they apparently killed an article about Justin sun eating the banana at his request because Tron is a big sponsor. Look, strongman politics is a way that crypto has run, but you know, we're moving into a different world. And the reason I think this story is interesting is that I think 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. And you know, everyone knows that everything that touches Justin sun ladders on up into Justin Sun's wallets and it's preposterous to believe anything else. So I'm all for it. I'm glad, I'm glad they delisted. I'm glad they're being loud about why it has nothing to do with anti competitive behavior. They were very clear it has to do it because anything that touches Justin goes to Justin. So whatever, man. Full, full team Coinbase here, as you can tell.
- [17:47]
Scott Melker
But interestingly, to give credit where it is due, until very recently most USDT transactions were still happening on Tron. And so in places not called the United States, that is the chain that people were adopting to send stablecoins fast and cheap back and forth. But since the election, Matt Hogan showed a chart. Ethereum actually has surpassed USDT on chain over Tron again.
- [18:09]
NLW
I mean, listen, people are completely welcome to still choose Tron because of the dynamics of the chain. I don't have any problem with that at all. I don't have any problem with the free market deciding. I, I just think that there's been sort of this, this desire to pretend that assets owned by the sort of Justin sun, you know, extended corporation weren't just all part of one big soupy pie. And it obviously is.
- [18:29]
Scott Melker
So yeah. Mike Dudas tweeted this interesting. Oof. Justin sun gave World. Justin sun gave World Liberty a ton of money. That, of course, is the Trump family's defi project. Coinbase and Justin sun earned an intense lawsuit that escalated today about WBTC safety and credibility. So world Liberty swaps 10 million out of Coinbase's BTC product into Justin Sons in response. Horrible. Look, this is more of the same. It's just kind of the, the pettiness. Right. But pretty crazy.
- [18:59]
NLW
It is what it is.
- [19:01]
Scott Melker
Do you think that he's going to eat any more bananas? You know, I was, at first I was thinking, man, that's a really old banana. But then I found out it's performance art and they just keep switching the banana to keep it fresh.
- [19:11]
NLW
That makes more sense. Yeah.
- [19:13]
Scott Melker
So he bought a 6.2 million dollar banana that he got.
- [19:15]
NLW
It wasn't even the banana for 20.
- [19:17]
Scott Melker
Cents like that week, but the idea that they taped it to the wall made it worth $6.2 million. I don't know. The last story that we have here is trying to parse what the hell is happening at the sec. And I guess what the hell is going to happen to the SEC moving forward? NFT collection, Cyberkong said it has received a Wells notice from the sec. I mean, this may just be Gary and friends screaming on their way out the door because it seems like this is futile and the action is unlikely to be taken by the time Paul Atkins gets into the sec. Hester Purse actually out there right now saying we're going to get more ETFs. They're going to have staking all these things in recent interviews. And then while this is happening and NFT collections are getting Wells notices, on the flip side, Carolyn Crenshaw, who people were fearing would be reconfirmed, she's one of the most anti crypto of the anti crypto army. Even more so probably than Gensler. They didn't even bring her up to renominate her after people thought she was going to get reconfirmed. So we have these sort of bipolar actions by the SEC or. Regarding the sec.
- [20:19]
NLW
Yeah, it's a bit of a chaotic time. I mean, the Cyber Kongs thing, I think that the, the question is whether this is a bomb being lobbed on the way out, whether this is, you know, the enforcement division clearing off its desk and something that was 90% done, and they know it's not going to go anywhere, but they sort of flicking it over the finish line. I mean, or whether it's, you know, are we going to see a dozen of these things in the last, you know, couple weeks before things leave? Who knows? I put, I put nothing past this group. I, I would say that our best hope is that they have been, that they seem tired now for all the losing they've been doing, so maybe we won't have to deal with all that much. Optimistically, the Crenshaw thing is fascinating. I mean, the, you know, it is clear with the SEC rules that they have to have three commissioners. It's not clear what you have to do and that only three can be from, from one party. It's not clear on anything else. And so there's a potential that we roll into next year with three Republican commissioners and no one else. Now, I don't think that would be.
- [21:18]
Scott Melker
A good situation, or they could put independence on the other side or, or cherry pick a couple very pro, you know, crypto or market Democrats.
- [21:27]
NLW
I think that, I think that for, you know, it's better for everyone if the SEC starts actually building back its reputation as a strong institution that's above this stupid pettiness. And so I would hope that you find, you know, sort of open, thoughtful Democrat commissioners and continue to have that, that sort of more partisan balance. But, you know, it's, it's. It's a sort of a, you know, they're lying in the bed that they made a little bit. So, you know, I would be, I would be lying if I said I wasn't glad that Crenshaw wasn't, you know, her, her reappointment wasn't being voted on.
- [22:02]
Scott Melker
Yeah. I also hope that we have a thoughtful SEC that actually discusses these matters in an intelligent manner and debates them and comes out with a rational conclusion. But she's the worst.
- [22:12]
NLW
Yeah, she was the only.
- [22:14]
Scott Melker
Anyone but her.
- [22:15]
NLW
She was the dissent. She was the dissent during the bitcoin spot ETF decision. And literally her dissent was the judge got it wrong and I'm right. So that tells you everything you need to know.
- [22:27]
Scott Melker
Classic well, listen, it's next week. We're going to go into Christmas week. I'll be here on Friday. I don't know if you will, but I'll be here on Friday. But going into Christmas week, hopefully we'll be able to have equally positive conversations with our families and friends as we did on Thanksgiving. Maybe things will go up before then. I would hate to see bitcoin at like 85,000 and everybody to have to have a reckoning at Christmas after recommending everything at Thanksgiving. It would be the most crypto thing ever, though.
- [22:51]
NLW
I think we'll be okay.
- [22:52]
Scott Melker
Yeah, I think we're going to be just fine. I think this is just a normal retracement sitting. Already back $3,000 up from when I woke up this morning. Could be worse. Guys, I say just chill, enjoy the holidays and better things to come in 2025. You can follow NLW at NLW on X. And of course check out the breakdown, his YouTube channel, everything he's got going on. Until next week. Thank you, man. Appreciate you.
- [23:15]
NLW
Later, guys.
- [23:16]
Scott Melker
Everybody have a great weekend. Bye. That's dope. Let's do.