Podcast Summary: The Wolf Of All Streets

Episode: Bitcoin & Crypto Dump AGAIN! Should We Be Worried?
Host: Scott Melker
Guests: Andrew and Tillman
Date: October 14, 2025

Episode Overview

Scott Melker dives deep into the recent dramatic downturn in Bitcoin and the crypto market, bringing on guests Andrew and Tillman for a wide-ranging discussion. The trio analyze the causes and implications of the latest “crypto dump,” focusing on topics such as leverage washouts, institutional reactions, market manipulation, the role of automated trading, and broader macro catalysts. The tone is humorous and candid, filled with trading war stories, colorful analogies, and practical advice for retail investors navigating volatile markets.

Key Discussion Points & Insights

1. Market Movements & Sentiment

• Bitcoin’s Recent Drop: Bitcoin is down to nearly $110,000 following a bounce, frustrating bullish traders who had just regained confidence.

  • “Yesterday we were going to 150,000... and today back in the trenches, wondering what will possibly come next.” – Scott [01:08]

• Leverage Washouts: The general consensus is that heavy leverage caused the cascade, and these events are common in crypto but ultimately shake out over-extended traders.

  • “It was just a leverage washout. Like a pure leverage washout. There were way, way, way more people that were levered in a significant way.” – Andrew [02:29]
  • “A fool and his leverage, Bitcoin, are easily departed.” – Andrew quoting Caitlin Long [02:56]

2. Psychology and Risks of Leverage Trading

• Casino Analogy & Emotional Allure:

  • “If you want to play leverage, go for it. It's like playing the casino... casinos are built on criers.” – Tillman [03:29]
  • “Leverage is addictive.” – Andrew [02:56]

• Semantics of Leverage: Many traders misunderstand how leverage really works, exposing themselves to greater risk than they realize.

3. Institutional Responses & Opportunity Viewpoints

• BlackRock’s Perspective:

  • Institutional players like BlackRock see these events as buying opportunities and remain bullish regardless of short-term turmoil.
  • “BlackRock, Larry Fink... their philosophy at this point is nothing is going to slow this down. It's going to continue to accelerate and you better stay on board or else you're going to get left behind.” – Andrew [06:12]

• Long-Term Market Structure:

  • “We haven't been underneath 100k in 159 days... that's the story... that's a much more impressive number than, oh, there was a flash crash down to 104.” – Andrew [08:30]

4. Market Manipulation and Order Book Dynamics

• The Engineering of Events:

  • Tillman draws attention to how price cascades occur—algorithms and large players can trigger “avalanches” in thin liquidity conditions.
  • “If you can engineer that type of a massive assault with enough capital, you can essentially guarantee to wipe out the massive... leverage zone.” – Tillman [14:29]

• Cascading Liquidations & Market Structure:

  • Markets lack circuit breakers; price can fall rapidly with no fills available at the bottom, stressing the importance of liquidity.
  • “There's not enough supply to fill the gaps... this was a cascading, engineered, cascaded event based upon algos failing and triggering each other.” – Tillman [11:04]

5. Positive Catalysts and Adoption News

• Expansion by Institutions:

  • Morgan Stanley removing access barriers, Citibank planning crypto custody for 2026, increase in mainstream adoption.
  • “Morgan Stanley... this is going to literally everyone... Citibank confirms bitcoin and crypto custody launch in 2026. These things are kind of a big deal.” – Scott [17:30]

• Copycat Moves in Finance:

  • With big players moving into crypto, the rest of the financial world will follow suit.
  • “It's a copycat league. Everybody's going to do the same things... So everything's going to be offered, you know, at large across all the big shops.” – Andrew [18:16]

6. Retail Realities, Liquidity Traps & Altcoin Risks

• Retail Trapped by Lack of Fills: Most small traders can't catch the lows during major crashes; the gaps are gobbled up by whales and bots.

  • “You are not going to find a retail person that got filled on Bitcoin at 104. Nowhere, absolutely nowhere did that happen.” – Andrew [20:12]
  • On altcoins: “Nobody got filled at 50 or 70 or 80 or 90 [SUI].” – Andrew [26:47]

• Altcoin Liquidity Is a Mirage: Wild moves in smaller coins (e.g., SUI from $3.30 to $0.55) illustrate the illusory nature of liquidity in many markets.

7. Trading Automation & Stress Testing Algorithms

• Real-World Algorithm Performance:

  • Scott describes how his use of Arch Public algorithms allowed hands-off execution during the chaos, resulting in stress-free accumulation and sales.
  • “We had buys all the way down 110... I'm actually maybe down across entire account, 2% and deployed my entire stack and waiting for more money to get in.” – Scott [35:13]
  • “You did all of that, by the way... completely hands free while you're doing other things, living your life.” – Andrew [38:41]

• Benefits of Automation:

  • The guests emphasize rules-based, emotionless buying and selling—a key antidote to human bias.
  • “That's why if you have these algos set up, you really love volatile swings because action happens. You're trading.” – Tillman [37:09]
  • “No version of what you were doing... had anything to do with leverage. Scott Melker did not get liquidated.” – Andrew [39:08]

• User Customization and Support:

  • The Arch Public platform is highly customizable; even free users get concierge support to tweak and optimize strategies.

• Risk Management:

  • Automation can enforce buying/selling discipline and prevent ruinous emotional trades.

8. Retail Attitude Change & Discipline

• Discipline Becomes Default:

  • “This is just a natural way for you to be accountable and set those accountability standards into the software.” – Tillman [46:30]
  • “If you have there's a setting in the tools that say, don't ever sell below my cost basis. And so if you have that checked, anytime you get a sell notification, you made money.” – Tillman [49:46]

• Accumulation Mindset Over FOMO:

  • Users of automated strategies begin to “root for” dips, shifting from a fixation on all-time highs to eagerness to accumulate with plan.

9. Humor & Cultural References

• Frequent analogies to movies (“Waterboy,” “Goonies”), casinos, and classic Wall Street memes, keeping the episode lively and relatable.

Notable Quotes & Memorable Moments

• Market Humor:

  • “In the words of the Zen prophet Rob Schneider from the movie Waterboy, oh no, we suck again.” – Scott [00:01]

• On Leverage:

  • “A fool and his leverage, Bitcoin, are easily departed.” – Andrew [02:56]

• On Institutional Attitudes:

  • “At BlackRock, they're like, oh, look, you know, we went down by a few percentage points. That's just an opportunity to buy.” – Andrew [07:02]

• On Manipulated Markets:

  • “…this is a game of who can accumulate the most bitcoin. That's what ultimately, in my opinion, this whole thing is about.” – Tillman [13:46]

• On Casino Trading:

  • “Casinos are built on criers, you know, and the leverage game is... a retail extraction.” – Tillman [04:11]

• On Automation Experience:

  • “I'm sitting at dinner, I would not be in front of my computer buying $110,000 bitcoin. Bang bang.” – Scott [35:13]

• On Retail FOMO:

  • “If you're feeling fomo, selling how to trade your own instincts.” – Scott [17:09]

Timestamps for Important Segments

• [00:01 – 01:51]: Show opens, swift recap of Bitcoin’s bounce and crash, light banter about Waterboy and football uniforms
• [02:29 – 05:19]: Deep dive into leverage washout, warnings for retail traders, and leverage’s emotional lure
• [06:00 – 08:30]: BlackRock and institutional attitude, bullishness despite dump, commentary on market cycles
• [10:33 – 16:17]: Correlated asset crashes, cascade explanations, market maker incentives, “engineered avalanches”
• [17:30 – 20:12]: Announcement of Morgan Stanley/Citibank moves, systemic adoption, and copycat behavior in finance
• [26:22 – 29:49]: Altcoin liquidity mirages, Coinbase’s increasing leverage, BitMEX comparisons, anecdotes on losing funds
• [30:47 – 37:55]: Scott’s (successful) stress test of trading algorithms, explanation of how automation optimizes entries and exits
• [40:02 – 44:24]: Customizing automation, user support, risk configuration, emotional benefits of bots
• [46:01 – 48:39]: How discipline and accountability are enforced by algorithms, backtesting for bear markets
• [49:45 – 51:54]: Real-user reactions, shifting mindsets from FOMO to cost curve discipline, harvesting volatility
• [52:34 – End]: Episode wrap-up, commitment to ongoing transparency, final humorous banter

Conclusion: Should We Be Worried?

Despite the intensity of the correction, the hosts and guests agree it’s a normal—if jarring—part of life in crypto markets largely driven by leverage and thin liquidity. Long-term prospects remain bright due to deepening institutional adoption and positive macro catalysts. Their message: avoid leverage, embrace volatility as opportunity, consider automation to enforce discipline, and keep perspective amid the noise.

To try Arch Public, visit their website. Supported brokers include Robinhood, Coinbase, Kraken, Gemini, and more.
Remember: Do your own research and always know your risk appetite.