← The Wolf Of All Streets
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- [00:02]
A
Bitcoin crashed to $65,000 as Wall street is fleeing crypto for SpaceX, OpenAI, Anthropic and a huge $80 billion raise at Alphabet. This is our new narrative that just dropped, which is that AI is sucking the liquidity out of the bitcoin and crypto markets. We're going to talk about that and everything going on with my friend David Jung. Let's get it that'. Good morning, everybody. Happy Wednesday to those who celebrate. Please like and subscribe and do all the things and welcome to my second lake house in two days. Apparently, I'm at a different lake house. I never know what background's going to come up until I see it on the camera, so it's always a good giggle for me. You're not at a lake originally?
- [01:00]
B
No, I don't have any fancy studio behind me to.
- [01:03]
A
Yeah, I'm at a lake.
- [01:04]
B
Oh, yeah, yeah. No, yeah, you're right, you're right. You're absolutely at leak. I'm sorry, I'm the one that's wrong.
- [01:09]
A
Yes, that's right. I'm at an actual lake where I have a perfect mic and desk at my lake. So, listen, I. I asked you before, you know, what do you think is going on with the market? And you very quickly said you think the biggest thing is sailors. You know, we've got. I love when they hit it just in as if nobody knows, like, the balance sheet or what.
- [01:31]
B
Bit by tracking, minute by minute. Exactly.
- [01:34]
A
So, yeah, Tom Lee's down 8 point, a casual 8.9 billion. Michael Saylor's down 7.6 billion. But that's not really the story. The story is the 32, I believe, Bitcoin, that strategy sold this week. And as you sort of alluded to, the signal it sends. Not really the amount, obviously.
- [01:51]
B
Yeah. I mean, I think that this is a challenge for our industry because both bitcoin and ETH are now held by two major players and they're both dads. And the fact that Sailor owns, I think, 4 to 5% of the Bitcoin supply, like anytime a headline like that comes out, I think it's going to sink spirits. Like sentiment kind of goes down. And you see it because, like, equity markets are doing gangbusters well and everyone is very bullish as far as sentiment, because they should be. You have fiscal stimulus kind of coming in the form of a lot higher paychecks or rather tax returns that came in in April. People are spending that, but they're not spending it on crypto. And I feel like we were in a okay phase at the start of the year around war because people were kind of taking profit on those names. But then like, you know, the war drew on, people started to kind of look through the risk and now they're kind of saying like, well, crypto still not very interesting because it's not moving the direction I want. Like when I thought it broke 80 at some point in May, I thought I was like, all right, maybe this is the opportunity never happened. Now like you have like Sailor selling there was like David Hoffman's like kind of headline that he's selling his or he sold his eth rather. It's just like it doesn't give people confidence.
- [03:14]
A
I mean, these are bottomy signals, not toppy signals though, right? I mean, I kind of, I tweeted this morning, I was like, if you believe that bitcoin ever goes to a new all time high again, you're getting it at a 50% discount to the previous all time high. Right? I mean, it's very easy, I think, and given maybe there's more better opportunity and it could take longer. I honestly understand that the opportunity cost to be in bitcoin could be different than other things. And that's where the main narrative has been going. So I talked about this on my other show, actually I think yesterday, and I wrote a long newsletter about it, but it seems to right now be the main narrative. Bitcoin hits lowest since February as crypto competes for liquidity with blockbuster IPOs. I mean, I tweeted this that we've got the NASDAQ hitting fresh highs. While bitcoin is obviously down bad. All of our correlations to tech, which I love, by the way, are gone. Right. But is this not only just because the NASDAQ is performing well and because tech is performing well? Is the bigger story that there's a whole massive liquidity vacuum coming in the form of all these IPOs?
- [04:18]
B
I mean, I think that's a part of it because a lot more liquidity is now chasing after more frontier things that people see more upside in. And you're right. I mean, you have three major IPOs coming up soon. SpaceX anthropic. Think I open AI and I think there's a lot of people who are going to want to chase it. I mean, I've done a lot of soul searching over the last few weeks. I left Coinbase and I'm trying to. I've been saying to myself, like, what is going to happen to crypto, like for the long term, not just kind of short Term. And if we accept the fact that things have matured, which I think they have, like this asset class, first of all, we're calling it an asset class. I think that, you know, five years ago no one did that, especially Tradfi. They all looked at this and thought it was a joke. Now you're, they're like, oh, no, no, no. Like everyone's has a, you know, digital assets department at like JP Morgan and Morgan Stanley and like Goldman Sachs, whatever. Like, they all like are treating it seriously. But the thing about that is like this is what you would expect when things mature, you don't see the same kind of like meteoric upside. And for a lot of the retail community that was trading crypto, you were in it for the 5x10x move. I mean, you believed in the tech, but you also were like, I want to get paid for my belief. And now you're like, well, I believe it, but so do a ton of other people. So it's not paying as well anymore. Well, you know, there's a lot of skepticism on AI. Hey, maybe I should jump into that. So yeah, there's a lot of that mentality going around.
- [05:47]
A
Yeah, I think it's not only that, but I think, you know, if we are intellectually honest and say that a lot of it was speculation, there's just a million other places to speculate now. I mean, you know, between prediction markets growing so massively, as controversial as they are, and obviously seeing other assets like silver and gold had their massive altcoin looking run. Right. And oil trading and I mean, maybe a lot of it is actually, you know, the hyper liquids of the world or places that used to be just for crypto natives, where now on those sort of crypto familiar platforms, you can trade anything. So why trade crypto?
- [06:21]
B
Yeah, I mean a lot of this,
- [06:23]
A
like stock, I mean you can trade SpaceX right now on a weekend.
- [06:28]
B
The truth of the matter is that most of the way people invest and this actually goes across, you know, fixed income, equities, Crypto, like a lot of it comes down to behavior rather than fundamentals. I think fundamentals matter. And when I'm talking about fundamentals and equities, it would be like, what are the revenues, what are the profits? Like how should you set the multiple in crypto you kind of don't have that as much. Some names do. But you know, like a lot of it comes down to the behavioral, like the psychology of how people trade. And that comes down to what you were kind of saying, like if it was speculative Then, you know, the way people kind of think about this stuff is they're like, well, I'm chasing the next big move and that big move isn't there to reward me. I mean, like, that's why most of, like, most things in like, the economics comes down to like, risk, reward. Right, Risk, however you want to define it. I think, like, it's been poorly defined by a lot of people, but like, it's the reward aspect that kind of comes into play and if it doesn't kind of give it to you, you're waiting for that. I think it could come potentially in the future. I. I don't know. Like, but it's not a great sign when you're seeing all our asset classes start to rally and crypto is getting left behind.
- [07:45]
A
Yeah. I mean, the thing is, if this narrative is going to play true, that the IPOs are the reason that bitcoin is dropping or could be the catalyst for another drop, we're going to have to see that not just in bitcoin, everything that's liquid should sell off to fund liquidity for those IPOs. If this narrative is correct, as I think about it. Right. Because it's not. You would think that would be the same from gold and from silver and all these things. Right. There was an analyst who said, you can only deploy a dollar once. I don't see this hundreds and hundreds of billions just sitting on the sidelines in dry powder waiting for these IPOs. You have to imagine there's something they have to sell and there ain't enough bitcoin to sell to fund that.
- [08:29]
B
Yeah, I mean, once upon a time that was why I saw like, you know, equities kind of like selling off. And I mean, this has been happening each iteration. Right. We saw that on like around the events of 1010, where people started to sell crypto incrementally at that point in order to kind of, you know, put cash on the sidelines. And then you saw that around like 2, 5. I mean, like, these things do come, but like, at this point I'm like, who, who is going to be participating in those IPOs? Because keep in mind, like, when you talk about something like SpaceX, what's the, what's the actual available floats 5% that people are going to have access to? Like, it's not a lot. So, and you're. Unless you're one of those large players and some of those guys probably have bitcoin, I'm not saying they don't. Like, they probably have some crypto that they could sell. I think the Golden Silver story is gone, by the way. It's now a pure momentum play at this point. It's. There is no fundamental narrative driving gold and silver at this point. And so, like, inside of the crypto space, you're like, well, there's some names that are still maybe potentially interesting. Like we saw. We see hype. Right? Hype is moving in part because they've attached themselves to the real world asset narrative, but other than that. And that's like energy and other stuff,
- [09:50]
A
which also I think. And tokenization, like, we're back to our right. I mean, like humanity, protocol, and all these things that have an AI, you know, they. They pop when Nvidia pops. I do find it interesting though, that we are getting some altcoin moves on narratives, and we haven't been for a very long time. I mean, stellar went up a lot. I mean, a lot is still relative to, you know, still a fraction of what we used to call a lot in a previous cycle. I mean, even hyper liquid doubling is big news. And that used to be at like 100x. That would be big news.
- [10:21]
B
Right.
- [10:22]
A
But we do have things that are going up even while bitcoin goes down on their own narratives, which I do find interesting.
- [10:29]
B
Yeah, I think so too. Maybe some of that, I think is attached to expectations on the clarity act. And people still kind of saying, well, this is the next. Or like, probably not even the next, but like one of the last major pieces of the puzzle that people are kind of watching in the crypto space. Like, there's not a ton of idiosyncratic themes at the moment. Clarity acts one of them. Well, how do you play it? Maybe it's. It's that. Maybe it's the fact that the CFTC is allowing perps in the US right now. I think that that's one that people can kind of glom onto. And then, you know, hyperliquid in particular also has like the hip3, hip4 stuff that's been propelling it for a while now. But they've all. People have been able to look through concerns that they had surrounding like supply being unlocked. So I feel like it was a confluence of factors that have been supporting it, but it's the exception, not the rule when we're thinking about altcoins right now.
- [11:27]
A
Yeah, I mean, 99.99% of them just continue to drop with bitcoin, obviously. I mean, do you think that these narratives persist? I mean, hyper liquid is interesting. I had Arthur on like three weeks ago. I think On Wednesday. And it was like 33 bucks or something. He was like. I was like, you know, I feel like I missed Hyper Liquid. You guys have been pumping the hell out of this. Like, you could just buy it right now. I was like, now you'll be, like, dumping it. I'll be buying yours. And it's up. So. Shows what I know, right? It's doubled since then in three weeks, so maybe that one can keep going. Although when I look at the charts, they're all, like, so massively overbought. They look like every FOMO into asset that we've ever seen in crypto. You know, zcash looks that way at the top. Hyper liquid looks that way kind of now. So.
- [12:15]
B
Yeah, but there are people pushing those names right now. And again, that was. I can come back to Bankless, right? Because, like, people are like, all right, like, you sold your eth. What are you buying? They're like, oh, well, I'm buying zcash, and I'm buying near. Hey, lo and behold, those are the tokens that seem to be rallying right now. And zcash has had a narrative around it for a while. It's not like it's. This is a new thing, per se. But, you know, you gotta keep in mind that a lot of these projects don't have, you know, a marketing department dedicated to them. And so when someone comes up, raise their hand and says, like, this could be a goodbye, I think that that does help push some of these things. And again, I don't know. I'm in detached from marks. I'll be honest. Like, I haven't been, like, watching them like a hawk. Like, I. I would normally if I was, but just kind of, like sitting from the sidelines. I don't know. It's. It's a. It's challenging one. When you think of bitcoin as a precondition that's necessary for so much of this stuff to actually do well, and bitcoin's not doing well, it's like. Well, then, you know, like. Like what? What? You know, like, we're kind of stuck.
- [13:20]
A
I mean, the S p is down 30. You'll have one or two runners that are notable, but everything will generally be down. And bitcoin is still the benchmark for the crypto market. You know, this. This news is gonna. This one's gonna shock you. Peter Schiff doesn't like us. Peter Schiff, Warren Strategies SDRC could enter a death spiral. Arguing falling prices may force the company to raise its coupon to maintain investor Demand, I mean that's literally, I think that's in like the disclosures of what STRC does, right? I mean if it goes below par then they have to raise their coupon. I mean that's literally the mechanics of how it works. So I can't say that he's wrong but STRC is trading at 96.71 so pretty far below par at the moment. I think I saw though that the vwap like you know how they determine it volume weighted is still 99 something. So it's, there's no reason that they would change the dividend at this moment. But if it continues they will have to.
- [14:15]
B
Man, I could have been blissfully unaware of this headline if it not been for me coming onto your show. I would just be sitting with my pina colada and just not even think about this. I mean, yeah, you're right. I mean there's, he's highlighting to be honest, a real structural tension. You know, like Stretch is a high yield product and it's built on top of a non yielding asset. That's the reality. Like, I mean like kudos to Michael Sailor for trying to create a digital asset, you know, bond and you know like. But the model relies on continued access of Bitcoin to capital markets at a reasonable cost. And so far, I mean you need in order to you know, justify this or at least have some stability like you need to see Bitcoin appreciation because otherwise economics of it don't really work. You need to have this Bitcoin per share growth story and you're not getting it at the moment. So I think that this is why for you know, Schiff anyway it's easy for to him to kind of put out this thesis right now. It's good timing on his part. I'm not going to lie. Like I don't love, I don't love him, nor do I love like his, his negativity towards our asset class. But you know like he's not wrong that if holders lose confidence in strategies, ability or their willingness which is kind of what people were worried about over the last day, what we talked about the top of the hour to like maintain the dividend then you could see a potential spiral like the price falls further. Yeah, it's harder time attracting new buyers. So yeah, you know like I think
- [15:53]
A
that that's kind of, it's a narrative cascade. Right. Because not only does STRC trade below par, it's Michael Saylor is willing to sell Bitcoin plus the only person who's really Been buying bitcoin in size for the past however many months is Michael Saylor. So if Sirc doesn't come back to par, he can't buy bitcoin. Therefore, is the buyer gone? Right. Maybe that's the bigger fear down the road is like at the end of the month, if STRC is not trading 100 bucks, do we see a $2 billion purchase from strategy? Right. Or are they kind of out of the market until STRC floats back up, they change the dividend, or until bitcoin rises enough that, you know, there's confidence again. I mean, Bitcoin at 55 could start to look pretty ugly. I'm not saying they're going to blow up or anything, but I'm saying if we're talking about narrative and how you think this through, there might be a stop sign here for sailors buying.
- [16:49]
B
Well, you've hit on the, the right point because the question really is, I mean, so far Saylor has demonstrated the ability to raise capital and he can grow his bitcoin per share and that kind of stays ahead of that compounding dividend obligation that he has. So that engine so far has been running. But what you said is exactly the point. Like, is that an autopilot thing where he can just keep doing that and can he do that in perpetuity? Like, I don't have the answer to that. I don't think anyone does. I think that like Shift is betting against that idea. But I think that's the debate. Like, it's not just about, you know, like the dynamics around the asset class itself. A lot of it comes down to, like, what about Michael Saylor? Like, how good is he at continuing this trend? Like, is Stretch really that innovative bitcoin backed credit or is it just yield chasing right now? And so I feel like I don't know what the answer is going to be at the end of all things, but I think this is, this is what a lot of people are probably internalizing at the moment.
- [17:59]
A
Yeah, I, I totally agree with that. And you know, I think a lot of people still also watching Capitol Hill to see what happens with the Clarity Act. I think, you know, you can like just segments like Sailor Clarity, you know, like attack. We got pretty firm narratives here. But you know, Clarity act near Senate floor ahead of recess deadline. So it actually was cleared to be voted on in theory. So it's on the calendar, I believe is the terminology. Yeah, was placed on the Senate legislative calendar on Tuesday according to Congress.gov. that does not mean that it gets voted, voted on, but it means it can basically get voted on. Obviously. You know, we've been watching this like a hawk. In addition to this story is that the Blockchain association sent a letter to Senate Majority Leader Thune and Democratic Leader Schumer, and it was signed by 160 former National Security intelligence and law enforcement professionals in support of the Clarity Act. And they're now making this. And Patrick Witt even tweeted, like, bitcoin is a national security issue now. So we have a new narrative that's kind of coming from our side, which is this is a matter of national security, not just a matter of banks versus crypto.
- [19:08]
B
Yeah, I mean, I think, you know, obviously things. This is a fast moving situation. My scenarios have kind of changed, but I never strayed away from the idea that I thought that the higher odds were for getting this passed in 2026. Actually, no, I. I take that back because there was a point in time where, like, when I saw, you know, Till, like Tom Till's Tillis, basically. Yeah. Basically said that, you know, he. He was kind of blocking it for specific reasons. I was a little bit worried. But now I would say that it's probably 50, 60 probability that we're gonna see this floor vote in this month, maybe July. I mean, it has to be done in the next two months because if it gets to, like, the August recess, then we have a real problem because it's not just getting to the Senate floor. Right. Because then you also need to see this reconcile with a House bill. It then needs to be voted by the House, then it can get to President Trump's desk. So really, it's a very tight debt timeline. Excuse me. Which is why I'm like, oh, like it's not a stronger probability. But then you're like, well, you know, it's. It's 50% isn't a great, like, probability. It's like saying 50, 50. I'm like, well, hold on. Because there was like three.
- [20:25]
A
I have it, like, 5% that it was going to pass two months ago. So 50, 50 is really optimistic for, you know, my view.
- [20:31]
B
Y. Yeah, I had it, honestly, when the Tillis thing happened, I was like, 35. So I was. But now it's like, I would say there's three scenarios, 50, fast track, it's going to become law and it gets done. Reconcile with the House bill, gets signed by President Trump. That would be like the optimistic scenario. And again, it all has to happen before the August recess because then midterms really kick in and nothing's getting done in the second half of the year, there's a 35 probability that it's just gonna grind on and it's gonna keep debating this because ethics still matter. I think a lot of people on the Democratic side, especially, like, I mean, this is the toughest part, because there should essentially be no reason why Democrats are opposed to crypto. But Trump, unfortunately, has given them a reason, because once upon a time, they were like, I don't like crypto. But. And you. If you ask like, a. Your. Your average Democrat voter, like, why do you not like crypto? They'd be like, well, I just don't like it because I don't like it. And you would have been like, well, that's a terrible idea. It's just tautology. And, like, you would fail logics classes. But now it'd be like, oh, like, why do you not like crypto? It's because Trump likes it. It's because Trump's family is profiting from it.
- [21:46]
A
Yeah, exactly.
- [21:48]
B
And the conflict of interest is. Concern is real. And so I think that, like, trying to get a pass, that is a big deal. So, you know, it's a 35 probability that it'll just kind of grind on with all these amendments and maybe it'll kind of go through midterms, but, like, it's not going to get passed, but possibly, like, we could look into, like, 2027. Like, I would say it's a 15 probability right now that, like, nothing gets done, and then it just hits an impasse and all of this has to be restarted until, like, 2027 or another administration.
- [22:23]
A
It's not happening unless it's a completely different bill, because we're going to have a different regime at that point. And really, when you drill in on it, August recess. Yes. But it's kind of by July 4th that it really needs to get done. So you're looking at sort of like a month, you know, just over July
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B
4th being a psychological, like, oh, and
- [22:41]
A
you hear Lummis and all of them, they're saying it needs to be done before we leave for July 4th. But here's the narrative. I mean, here's Patrick Witt, right. The Clarity act is the most pro law enforcement crypto bill ever considered by Congress. Fact. So you know that this is the new narrative that's coming on the back of this blockchain association. Like, I love that the crypto industry, you're like, yay. Pro law enforcement, yay. But here we are on the other side.
- [23:03]
B
I mean, like, you saw Jamie Dimon Once again, coming in kind of opposed to this bill. Like there's like that new, like, lobby group or whatever, like I think they call it New Democrats or whatever, who, like, who are putting out ads against this. So money's being. I honestly, like, that's what makes it difficult. There's money being thrown out on both sides in favor and against this bill.
- [23:26]
A
Yeah, 50. 50 is, I think, is probably accurate. I haven't looked at what the Poly market on it is on it, but Poly market's just going to screw you over if you get it right. Anyways, I don't know if you saw the story on the strategy thing, but it's.
- [23:41]
B
Is that what happened?
- [23:42]
A
They had strategy to sell bitcoin by the end of May, and so that. But it was announced on June 1 by Strategy, obviously, on a Monday morning, which they always do. But it said they had sold 32 bitcoin in the five days from the 26 to whatever. And Polymarket decided to settle it as a no because it was announced on June even though the sale was in May. And so it's like a $79 million market or something.
- [24:11]
B
Oh, yeah. I'd be pissed on that too, because. Yeah, like, by the terms of that, it was actually very clear that that
- [24:19]
A
should be a yes. Right. They sold bitcoin by the end of May, didn't say, will they announce that they sold bitcoin by the end of May. So, I mean, there's still a lot of things to work through there. So. Yeah. Trusting the Poly market, who knows? Anything else on your radar before I let you go?
- [24:33]
B
No, not a lot. I. I feel like those are the things I've been kind of incrementally watching. And yeah, a lot of it comes down to, like, you know, I think what you said, given the news that's happening on the equity IPO side of things, is there enough psychological bandwidth to people be thinking about crypto right now? I think there still could be, but it's going to take time and we kind of. We kind of need to see that stuff happen first to. For people to kind of come back to these markets.
- [25:01]
A
Yeah, it's crazy. I mean, you know, bitcoin's down so much, but on the like, tokenization and adoption and institutional side, given, none of that necessarily moves the tokens. Like, it's insane how much stuff happens on a daily basis. MasterCard had a story today that they're going to like, adopting stablecoins for weekend and night settlement. I mean, it's crazy. Like MasterCard literally, like you do a transaction, it authorizes, but then they go batch that transaction during banking hours to clear it. Now they're going to clear 24, 7, 365. Once again, I don't know how that helps me, but it's really cool to see the technology being adopted more than ever.
- [25:35]
B
But this is the thing with crypto. I mean, like, crypto has always been about the pipes, and it's not very sexy. I mean, like, it's. I think about it like, I have a house. My. Like, it's an old house because I live in New York and everything's from the 1960s. Meaning you can never, like, just kind of like, raise it and just build out a new home again. It's very expensive. You want to do that. So I'm sitting on pipes that, like, you know, like, clog up every so often. Like, like. Like the toilet doesn't work, whatever. Ideally, I should just kind of like, go in, change those pipes and just be done with it and fix it. But it's a long project, so I won't do it until I'm forced to. And that's what the financial industry is doing. Right? Like, it's like, theoretically, these pipes don't work. Like, they are not great pipes, or rather they work, but, like, they're. They're old and they're like, they're creaky. And if you were honest with yourself, you'd say, like, we just gotta, like, put the money in and just kind of change it. But you won't do it unless you're forced to. Now they're all doing it, but from a user perspective, like, your life improves. You just don't watch it day to day. Like, for the most part, you're kind of just going like, yeah, the bathroom works. It's cool. Like, I don't. I don't want to spend $20,000 to, like, fix this because that's super expensive. Maybe I'm, like, projecting a little bit, but, like, that's kind of where we're at now. Like, I feel like we've hit a place where, like, NASDAQ, Nice C, like MasterCard, Visa, whatever. They're all kind of saying, like, yeah, this is the time where we actually had to fix these things.
- [27:05]
A
Yeah, I totally agree. Oh, man, it's great to see you. Thank you so much for joining. As usual. Go get that pina colada or whatever back in your hand and enjoy.
- [27:15]
B
Sounds good. Thanks, man. Good to see you.
- [27:16]
A
All right, man. Thank you. I'll talk to you soon. Everybody else be back for the Daily Wolf. And of course, tomorrow at 9am See ya. It's dope.