The Wolf Of All Streets — "Bitcoin DUMPS As Fed Rate Cut Threatens Crypto Rally!"

Host: Scott Melker
Guest: Marcus Thielen (10X Research)
Date: December 11, 2025

Episode Overview

This episode analyzes the paradoxical market reaction following a Fed rate cut, which coincided with a sharp Bitcoin price drop. Scott Melker and Marcus Thielen break down the Fed’s ambiguous messaging, discuss the implications for Bitcoin and the broader crypto market, debate the validity of the Bitcoin four-year cycle, and explore the shifting inflow dynamics and potential future catalysts—including the evolving role of institutional investors, macroeconomic indicators, and regulatory developments.

Main Themes & Purpose

• Why Rate Cuts Aren’t Always Bullish: The common belief that lower rates drive asset prices higher is challenged by Bitcoin's recent decline.
• Fed Policy Confusion: Examination of Jerome Powell’s ambiguous stance and its effects on market sentiment.
• Flow of Institutional Money: A close look at ETF inflows, on-chain data, and the role of traditional finance in the crypto bull/bear cycles.
• Four-Year Cycle Revisited: Is it about halvings, elections, or changing macro liquidity?
• Potential Catalysts and Risks: Regulatory clarity, institutional adoption, and macro events that could move the crypto markets.

Key Discussion Points & Insights

1. Market Reaction to the Fed Rate Cut

Scott Melker [00:04]:

• Observes that, contrary to expectations, Bitcoin dropped after the Fed cut rates:

  "Last I checked, it was supposed to be bullish for bitcoin when rate cuts happen. We got the move up and then of course a move right down afterwards."

• Highlights Jerome Powell’s mixed messages and market confusion.

Marcus Thielen [03:40]:

• Unpacks the Fed meeting’s impact:

  "Powell started to talk, he... was a little bit more neutral. And I think over the Q and A session, he turned more and more dovish... But I think then people realized, well, you know, the statement itself was actually quite hawkish because they only expect one more cut next year and then another cut in the following year."

• Points to lack of consensus within the Fed, creating unpredictability.

2. The Fed’s Ambiguity and Its Effects

Scott Melker [08:26]:

• Highlights the lack of clear guidance:

  "When you hear the Fed chairman say, some people think we should stay here, some people think we should cut more, some people think we should cut a lot more. We're not sure how much we should cut, and we're thinking about when maybe we should should cut. I can see why there'd be some confusion."

Marcus Thielen [09:21]:

• Critiques Powell’s lack of decisiveness:

  "As a leader you need to put a, you know, a strong word forward... you cannot just like, you know, fumble, you know, every time in every meeting... everybody was expecting actually that it would be like sort of like a hawkish cut with a pause. And I think we have now around 80% probability that the Fed will stay on pause on, you know, in January."

• Notes that institutions are “just trading a lot more carefully,” especially approaching the holidays.

3. Bitcoin and ETF Inflows: Data Deep-Dive

Marcus Thielen [11:03]:

• Presents chart analysis:

  "We came from like 20,000 rallied, but now we're really in this bull channel and we broke the bull channel. We are now at the lower end and we're trying to break back in but we are failing."

• Cites declining ETF inflows:

  "Last year we raised almost like $34 billion, but this year it's only like 22 billion... a lot earlier in the year... the next meeting might actually not be a cut... big institutional Wall Street investors dialed back their buying of Bitcoin ETFs..."

Scott Melker [14:12]:

• Expresses surprise at the slowdown:

  "Inflows here have considerably slowed down. I actually find a bit of this data like surprising. I guess anecdotally it just didn't feel like it, but it's pretty clear when you look at it."

Marcus Thielen [14:55]:

• Clarifies on-chain data:

  "This is on chain data that we can look at the realized cap and it really aggregates the data and it shows it quite clearly that right now not a lot of money is coming in."

• Recommends caution:

  "So unless you really break back into the bull channel. I would stay on the sidelines, I would stay conservative. We have been recommending a lot of option selling just to harvest some yield to make some returns."

4. The Four-Year Cycle: Myth or Macro?

Scott Melker [16:11]:

• Introduces Tom Lee’s ultra-bullish view and ISM–crypto correlations.

Tom Lee (clip) [16:54]:

"Crypto prices are really sensitive to the ISM. So the ISM moving back above 50 has historically been associated with actually super cycle moves in Bitcoin and ethereum."

Marcus Thielen [18:04]:

• Skeptical of ISM’s predictive power for Bitcoin now:

  "It's all more like services driven, it's all tech driven. So... I wouldn't really, you know, believe it that bitcoin is like so correlated to the ISM."

• Argues that the four-year cycle is more about midterm elections than halvings or manufacturing cycles:

  "It's not about the halving, it's more about the midterm elections. And that's usually when stock market tends to struggle and consolidate... Bitcoin broke the 12 months moving average for the first time really since this bull market started."

Scott Melker [20:36]

• Notes the nuance: Halving narrative losing relevance; questions the deterministic nature of cycles.

5. Bearish Tilt & Year-End Outlook

Marcus Thielen [23:41]:

• Doesn’t foresee an 80% drawdown; expects consolidation and decreased volatility.

  "I'm not saying we go down 80% but I do think we're going to consolidate for a bit longer than people are expecting."

• Market is waiting for new catalysts; institutions will likely not make big moves until after the holidays.

  "I think we're coming to the period where volatility is going to get crushed... we expect actually that bitcoin is going to stay in the range..."

6. Potential Catalysts: Regulation, Institutions, and Flows

Scott Melker [25:08]:

• Lists potential bullish triggers:
  • Clarity Act
  • Regulatory changes (12.5 trillion 401K market to crypto)
  • PNC partnerships, Vanguard/EFTs opening to Bitcoin.

Marcus Thielen [26:27]:

• Market can change rapidly; staying agile is critical:

  "I think you really need to focus on the marketing, to follow it every day because you don't want to miss it."

• Comments on government spending:

  "The 5 trillion debt ceiling increase, but we have already depleted 42% of that... at one point the market will wake up and say like, hey, I rather want an alternative asset. And I think that's when bitcoin can shine."

7. Altcoins and "Crypto Stocks"

Scott Melker [28:30]:

• Asks about Marcus’ view on altcoins.

Marcus Thielen [29:10]:

• Sees headwinds due to $59b/year in unlocks and VC redemptions; “retail is not really the driving force this cycle.”

• Favors BNB over Ethereum:

  "If I were to hold one Altcoin, it's probably BNB because it's one of the large cap ones and I think it has a lot more potential also from a yield generating perspective."

• Notes that the action has shifted to “crypto stocks” and IPOs (e.g. Circle, Robinhood, mining companies).

• Points to Korean retail investors as a significant (and overlooked) source of volume and liquidity:

  "US Equity buying from Korean investors... they bought like $1.5 billion of bit mine... last year at one point, the crypto markets in Korea... traded 50% more than all the stocks.... That's how crazy it is." [33:22]

8. South Korea’s Influence & Systemic Leverage

Scott Melker [32:41]:

• Highlights massive speculative activity from South Korea:

  "A disproportionate amount of volume and trading... is absolutely insane. I didn't realize that they had access to the public markets in that way and that you were tracking it."

Marcus Thielen [33:22]:

• Provides striking comparison:

  "The Korean stock market... trade $15 billion a day... crypto markets in Korea... traded 25 billion at one point. So crypto market traded 50% more than all the stocks... at one point last year."

9. Looking for New Opportunities

Marcus Thielen [34:21]:

• Eyeing prediction markets (Polymarket) as a new area for growth:

  "We started to look a little bit more at Poly Market, at these betting markets because they have raised $3 billion... So maybe that's like a niche."

• Emphasizes that “crypto is never boring. There's always something cooking in the background.”

Notable Quotes & Memorable Moments

• Scott Melker:
  "We live in the Upside Down." [00:04]

• Marcus Thielen:
  "Powell…started in a, you know, with a balanced view. He started the press conference saying that actually, where rates are right now, they're really in a good spot… But of course, the longer the discussion went on in the Q and A, he became more and more dovish. And I think that's confused people initially." [05:54]

• On ETF Inflows:
  "We started the year relatively slow because of the Trump tariff hiccup. And then, you know, we didn’t really push through." [12:16]

• On the Four-Year Cycle:
  "Was the four year cycle always about elections? Because... you usually get the halving in the spring and then the presidential election in the fall." — Scott Melker [20:36]

• On Regulatory Catalysts:
  "Market can actually change, you know, quite quickly. And I think that's how the market has changed compared to previous years." — Marcus Thielen [26:16]

• On Korean Retail:
  "Crypto market traded 50% more than all the stocks... at one point last year. So that's how crazy it is." — Marcus Thielen [33:22]

Timestamps for Key Segments

• Fed Rate Cut Discussion & Market Reaction: 00:04 – 05:54
• Fed Meeting Analysis & Market Structure: 05:54 – 14:10
• On-Chain & ETF Flow Deceleration: 11:03 – 14:55
• Debating the Four-Year Cycle: 16:11 – 24:00
• Macro Risks & Institutional Behavior: 24:00 – 26:27
• Potential Bullish Catalysts: 25:08 – 29:10
• Altcoins, BNB, & Crypto Stock Thesis: 29:10 – 32:41
• Korean Retail & Systemic Leverage: 32:41 – 33:53
• Final Thoughts, Prediction Markets: 34:21 – 34:49

Tone & Closing

The conversation is data-driven, measured, and neither perma-bullish nor perma-bearish. Both Scott and Marcus recognize that while short-term catalysts are missing, the market can quickly shift—emphasizing the importance of monitoring flows, macro signals, and regulatory developments. Marcus supports tactical trading over long-term holds until conditions improve. The episode ends on a note that, in crypto, opportunities abound for the vigilant.

Follow Marcus Thielen on Twitter and check out 10x Research for more insights.