Podcast Summary: "The Wolf Of All Streets"

Episode: Bitcoin CRUMBLES Against Gold?! | Stablecoin Bill Just Took a HUGE Step Forward!

Release Date: April 3, 2025

Hosts: Scott Melker and Yago (Guest)

1. Introduction to Tariff Palooza and US Tariffs

The episode opens with Scott Melker addressing the aftermath of "Liberation Day," highlighting the tumultuous introduction of unprecedented tariffs under the Trump administration. Scott remarks, “Tariff Palooza was so wild that we even imposed tariffs on uninhabited islands near Antarctica” ([00:00]). This unconventional move sets the stage for a heated discussion on the economic and geopolitical ramifications of broad-based tariffs.

Yago's Take on Tariffs: Yago dismisses the efficacy of tariffs, stating, “Tariffs are very obviously poor economic policy” ([03:28]). He criticizes the broad application of tariffs, noting their historical association with significant economic downturns, including the Great Depression. Yago explains that the U.S. has a history of imposing substantial tariffs that have often led to recessions, emphasizing that the current administration's approach is unlikely to differ in outcome ([03:50]).

2. Impact of Tariffs on Bitcoin and Gold Markets

Scott and Yago delve into the immediate effects of the tariffs on financial markets, particularly focusing on the contrasting performances of gold and Bitcoin. Scott observes, “We know that gold has absolutely skyrocketed while bitcoin has dumped” ([00:00]). This divergence suggests underlying economic instability, with gold typically viewed as a safe-haven asset in uncertain times.

Yago on Bitcoin’s Position: Yago remains optimistic about Bitcoin's long-term prospects despite its short-term decline. He believes that global economic hardship, triggered by widespread tariff impositions, will eventually benefit Bitcoin as central banks around the world may resort to printing money, leading to currency devaluation. He states, “everyone is going to be devaluing their currencies” ([07:09]).

3. Trump Administration’s Tariff Strategies

Scott scrutinizes the Trump administration's tariff calculations, expressing skepticism about their accuracy and intent. He highlights a flawed methodology where tariffs are calculated by dividing the U.S. trade deficit with a country by that country's exports to the U.S., leading to arbitrary and inflated tariff rates. Scott points out, “we have 17.9 billion trade deficit with Indonesia… 46%… 64% for Cambodia” ([04:42]).

Yago's Analysis: Yago contemplates the strategic intent behind the tariffs, suggesting they might be aimed at creating global fear to negotiate better trade deals. However, he also warns that such strategies are more about generating chaos than achieving economic stability. Yago remarks, “This could actually shrink US manufacturing” ([10:43]), explaining that tariffs on inputs can inadvertently harm domestic production.

4. Bitcoin's Role and Hash Rate as an Indicator

The discussion shifts to Bitcoin's operational health, particularly focusing on its hash rate—a measure of the network's security and mining activity. Yago notes that a rising hash rate indicates confidence among miners and suggests that significant investments are being made in mining capacity, signaling bullish sentiments within a segment of the market ([17:54]).

Scott questions the correlation between Bitcoin’s hash rate and its price, acknowledging a “chicken and egg” scenario where it's unclear if hash rate drives price or vice versa. Yago counters by emphasizing the network's increasing security budget, highlighting Bitcoin’s resilience and growing institutional interest: “Bitcoin is generating about $4 billion in minor revenue per month” ([17:54]).

5. Altcoins’ Performance Relative to Bitcoin

Yago and Scott discuss the underperformance of altcoins compared to Bitcoin. Yago attributes this to Bitcoin’s dominant network effects and its establishment as the primary digital asset. He states, “the world is waking up to the fact that this is a network effects industry” ([20:19]). Scott adds that altcoins continue to struggle, with most failing to outperform Bitcoin, reinforcing Bitcoin’s status as the leading cryptocurrency ([18:39]).

6. Stablecoin Legislation in the US

A significant portion of the episode is dedicated to stablecoin regulation in the United States. Scott announces the advancement of the Stablecoin Genius Act in the House Financial Services Committee, noting its bipartisan support ([24:54]). He expresses concerns about potential unintended consequences, such as monopolization by major financial institutions and the marginalization of existing stablecoins like Tether.

Yago’s Perspective on Stablecoins: Yago underscores the strategic importance of stablecoins for maintaining the US Dollar's dominance as a global reserve asset. He explains that stablecoins are crucial for global dollar transactions, stating, “the stablecoin market is completely dominated by the dollar” ([25:56]). Yago speculates that while regulation may push certain stablecoins out of the market, it could also open opportunities for decentralized, Bitcoin-backed stablecoins to emerge, fostering competition and innovation within the space ([28:51]).

7. Market Volatility and Trading Strategies

Scott and Dan (from Chart Guys) address the heightened market volatility following the tariff announcements. Scott admits misjudging the market’s reaction, noting that the volatility exceeded expectations despite anticipating some level of uncertainty ([34:48]). Dan shares his cautious approach, likening his strategy to “turtle mode,” where he remains patient and avoids aggressive trading amidst uncertain conditions ([35:49]).

Dan on Bitcoin and the Nasdaq: Dan analyzes Bitcoin’s price action in relation to the Nasdaq. He highlights Bitcoin’s relative strength, noting that while the Nasdaq has confirmed a weekly bear flag, Bitcoin has maintained its support levels, positioning itself favorably for potential rebounds ([38:03]). He advises caution but remains optimistic about Bitcoin’s resilience compared to traditional stock indices.

8. Final Thoughts and Conclusions

As the episode wraps up, Scott emphasizes the importance of independent thinking in the Bitcoin community, asserting that true Bitcoiners should remain detached from political biases and focus on the fundamentals of the cryptocurrency ([43:24]). He advocates for Bitcoin as an alternative to flawed government economic policies, reinforcing the podcast's overarching theme of exploring Bitcoin's role amidst global financial instability.

Yago concludes by dreaming of a future where Bitcoin plays a central role in global finance, envisioning innovations like “Freedom Cities” with low regulatory environments that foster growth and experimentation ([30:24]). He remains hopeful that Bitcoin will continue to solidify its position as the leading digital asset, complementing existing financial systems rather than competing against them.

Notable Quotes:

• Scott Melker ([00:00]): “Tariff Palooza was so wild that we even imposed tariffs on uninhabited islands near Antarctica.”

• Yago ([03:28]): “Tariffs are very obviously poor economic policy.”

• Yago ([07:09]): “everyone is going to be devaluing their currencies.”

• Scott Melker ([04:42]): “We have 17.9 billion trade deficit with Indonesia… 46%… 64% for Cambodia.”

• Yago ([10:43]): “This could actually shrink US manufacturing.”

• Yago ([17:54]): “Bitcoin is generating about $4 billion in minor revenue per month.”

• Yago ([20:19]): “the world is waking up to the fact that this is a network effects industry.”

• Scott Melker ([24:54]): “Stablecoin legislation is very likely to be coming.”

• Yago ([25:56]): “the stablecoin market is completely dominated by the dollar.”

• Dan ([35:49]): “I just wanted to see if the bulls are able to do anything.”

• Scott Melker ([43:24]): “If you expect to come here and me to get super excited about everything a politician does economically… you've found the wrong place and the wrong show.”

Key Takeaways:

1. Unprecedented Tariffs: The Trump administration's broad imposition of tariffs has been criticized for its economic inefficacy and potential to trigger further recessions.

2. Bitcoin vs. Gold: While gold has surged in response to economic uncertainty, Bitcoin has faced a downturn, though its long-term prospects remain robust due to increasing global currency devaluation.

3. Stablecoin Regulation: The progression of stablecoin legislation in the US is poised to reshape the digital currency landscape, potentially favoring major financial institutions while opening doors for decentralized alternatives.

4. Market Volatility: The tumultuous economic policies have led to heightened market volatility, prompting traders to adopt more cautious and patient strategies.

5. Bitcoin’s Resilience: Despite short-term challenges, Bitcoin's underlying strength, as evidenced by its hash rate and network security, positions it favorably against traditional financial markets.

6. Future Innovations: The vision for Bitcoin includes integrating it more deeply into global finance and fostering environments like "Freedom Cities" that prioritize low regulation and innovation.

This episode of "The Wolf Of All Streets" provides an in-depth analysis of the interplay between government policies, especially tariff impositions, and the evolving landscape of cryptocurrencies. Through insightful discussions, Scott Melker and his guest Yago explore the challenges and opportunities that lie ahead for Bitcoin and the broader financial ecosystem.