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- [00:00]
A
Bitcoin dropped back below $67,000 today before settling in right in the 67,500 region. Many were expecting a huge rally off the lows of 60,000 last week, which is yet to materialize. All of this happening of course with a lot of news in the macro, especially a very confusing positive jobs report when we're expecting up to a million job revision down. When I need to unpack what's happening in the world with the macro, I bring on my good friend Peter Cheer and we're going to do it right now. Let's go, let's do.
- [00:49]
B
Let's do.
- [00:50]
A
Good morning everybody. Happy Wednesday and welcome to the show. We're going to dive right into it now after you subscribe. Subscribe and like, because I'm contractually obligated to ask you that once a month, I'm jump right into it with Peter. Good morning, Peter. How are you?
- [01:04]
B
Not too bad. Yourself?
- [01:07]
A
I'm doing well. So listen, we, I had this whole thing queued up. The job disaster, you know, you had, you had retweeted this from the most probably highly quoted person on this show by Mike McGlone, Anna Wong from, from Bloomberg. Here she is on jobs. We're expecting about 666k downward revision. That's very satanic. To March 2025 payroll level as part of the annual benchmarking. After all that said and done, we expect December 2025 to see a downward revision near a million jobs. Right, Everybody bracing for this horrible report we're seeing talk about hitting recession rates 3.3% 2020, all this fear and then the job report just dropped right before 130,000 jobs, double what people expected and a tick down in unemployment. What's going on?
- [02:00]
B
First, I will say a couple positive things about the job report because clearly not only was the job number higher, but private sector was 172 case. We actually lost government jobs. So again, I love a jobs report in general where you're getting more public private sector jobs in public sector downward revisions weren't very much. And what I liked about the unemployment part was not only did the household survey say there were 500,000 jobs, which helps that, but we actually had the participation rate go up. And so the participation rate going up would normally be put pressure on the unemployment rate that went down. So that's all good. The reality though is I've been complaining for years that the seasonal adjustments are all off and no one really likes to talk about the non seasonally adjusted data. We lost 2.65 million jobs in January. So we added back all these jobs. And two things I think are really wrong with that, the seasonal adjustments. It takes them five years before they switch them fully. They still add a lot of jobs in January, February, March, because of construction slowing in the Northeast. I think that's just garbage. I think the construction that occurs is in the summer, sorry, is in the southeast, Southwest. And we should actually not be taking away jobs or, you know, adding fictitious jobs. And we've seen the last few years big downward revisions later for January, February, I think in part because of that, because that no longer reflects the economy. The construction is going on in the South, Southeast. And that's also why the summer jobs data is always weak, because we subtract jobs. The other problem is I saw very little evidence of seasonal hiring. I think the seasonal hiring, if anything, starts in November. I didn't see stores ramping up. We're no longer brick and mortar type thing. So I won't be surprised to see some big downward revisions. Last February was the biggest downward revision of the year. It was 172,000 or something. Jobs were taken away. I think we see the same sort of thing this year that they've kind of fictitiously added jobs for all these seasonal adjustments that just don't exist. And it's particularly hard this year because they didn't publish data for two months because of the shutdown. So I'm not as excited about the jobs report as I would be otherwise. Sorry for that long winded answer.
- [04:01]
A
That's great. That's what I wanted. And so before we dive into why that actually matters for Bitcoin and crypto, we see these massive downward revisions seemingly every single time. In your view, is this just a function of how you. They've poorly calculated the numbers like a broken system, or is there something nefarious behind it, as a lot of people would try to point out? Right, because it seemed like we have markets reacting to all these positive, certainly at the end of the Biden years. I'm not saying it's necessarily to. That's just how I remember it. It's not because of Biden per se, but we had all these incredible job reports, and then right at the end, they were all erased at the end of the year. So we were basically, you know, markets were reacting to data that was completely wrong the entire time and a narrative. And then quietly, they just rug pulled all of it when nobody was looking. Is that just because they're really bad at data, or is this because the government wants you to See a certain.
- [04:57]
B
Picture, I think it's really because they're bad at data. So if you go back the last few years, January, February always comes in hot and we take it away in the summer, that to me is that seasonal adjustments wrong. The other thing that they've been screwing up, I think is this birth death model. And at the risk of sounding like, you know, wonky, the birth death model tries to figure out how many jobs were created by new companies starting and how many were lost by companies filing for bankruptcy, et cetera, shutting down. Right. And the problem is they use ein, so employment identification Numbers to figure that out. And they assume three or four jobs. I can't remember the exact number, but per Employment identification Number, what I think has been going on is now if you get nervous about your job, you think about driving Uber or Lyft or doing Uber Eats. So you get an employment identification number. If you have two or three homes that you're trying to put as Airbnbs, you get an EIN for each of those places or apartments so that you can, you know, be more tax efficient. So I think the gig economy has overstated these like not birth death model jobs. Ridiculously high. If you go back last year, Liberation month was April, we had this record number of jobs created by birth death. You really think last April, in the heart of all the tariff wars people were starting jobs or were they looking to, hey, maybe I got to protect myself. And the thing that supports that most to me is law school applications. Law school applications are off the charts. That to me is an indication that people can't find jobs. Right? Hey, I'm not going to go live in my parents basement. I'm going to go to law school.
- [06:22]
A
That's hilarious. So are there better models that we can look at beyond the government's models that give us a more accurate appraisal? It seems like this would be a problem that people would be actively trying to solve. We have inflation data, but then we have truflation, which is a site that obviously recalculates data in a superior manner.
- [06:41]
B
One thing that makes me kind of scratch my head is I think adp. So the employment, they should have good data and they revamp their data to try and make it look like more like non farm payroll instead of like being more accurate. And to me like that's where in this, it's amazing to me that we don't have real time data collection. Right everyone, you know, 99% of people get a check every two weeks or every month. How that's not real time, collected, processed is beyond me. So the single most important data point that we have is probably the most garbage collected. And just as you point out, truflation. If you look for me rent, you go to Zillow. Right. Why does Zillow data seem to show that rent's coming down? And CPI uses this OER calculation, which is mind boggling. You know, there was a time, I guess people actually rented single family homes. They don't use this data. So I think if you start looking at adp, you look at the unemployment claims, you start looking at all the job cuts that are being announced. I think the data is much murkier than this report made it seem.
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A
I'm not sure if you saw this. I just want to mention it because it's absolutely hilarious when we talk about taxes at the end of that in the irs. Well, I don't know if you saw the IRS should be shut down. IRS employees owe $50 million in unpaid taxes. The story going around the IRS agents themselves apparently are horrible at actually filing and paying their own taxes. Just another. Yeah, maybe the data is bad. Well, maybe none of this works particularly well with the United States government.
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B
Yeah, it's all par for the course, I guess at this point in the government it is.
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A
So let's talk about, let's go back.
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B
Just for once. I wish Doge hadn't kind of erupted the way it did. I wish Doge had kind of been a little bit quieter up front and done their job quietly and come up with things that we could all agree on. Hopefully some of that starts coming back. That was kind of the biggest disappointment, I think, of the start of this administration for me.
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A
Yeah, that's not coming back. No, I would love to believe it, but the minute that they said, hey, we're going to grow our way out of this and Elon Musk was marginalized, I think it made for a great early narrative for the first couple of months. But both parties are just fiscally irresponsible and are going to run it hot. There's just no way that that becomes politically palatable over time. Which is sad because I think every American person agrees with the idea of efficiently using our taxpayer dollars and not wasting that money.
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B
I think we've talked before, the debt ceiling is just a joke. It's a excuse for everyone to go and kind of do a land grab for even more money, run a system so long as the incumbents can keep running. As an incumbent, why wouldn't you spend money to try and get reelected? Right. It's it's kind of a chaotic system we've created.
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A
So, interestingly, I mean, just in the moment, which I try not to talk too much about what price is doing at any given moment, but we did have on that jobs report, the spy futures kind of pumped a bit. Bitcoin was lagging. I looked, I said hi. I made a joke to my producer. I was like, well, bitcoin did nothing. Well, it actually just did. It jumped up to 68. 5. Not that that's such an exciting price, but we were trading, you know, $2,000 lower just a matter of hours before. Are we really at the point where, in your view, bitcoin's price is so reactive to everything that's happening with the macro? I think it's very temporarily reactive, of course. Right. I mean, things move in an hour. It might be different.
- [09:55]
B
Yeah, it's been incredibly choppy. To me, you kind of watch it. And even this morning, right, stock futures are up marginally and bitcoin was down hard. So they kind of were separated and now they both popped. I keep waiting again. You know, I was very comfortable with bitcoin. I thought we were breaking out. We started breaking down. I'm out right now. I want to buy again. There's been. I continue to get frustrated because there's been nothing but good news. It's clear to me that this administration wants crypto to succeed. They're invested in crypto and yet we can't break through. So I'm not sure what to do right now. I feel the price actions headed down again just because we had, you know, there was, you know, there was kind of this fear within the crypto community. You saw that and you saw, you know, Peter Schiff celebrating and stuff. All it took was a couple days of bouncing and all of a sudden, you know, my feed was inundated with, we're going to a million, we're going to 150,000 in two days. It's like we need to kind of settle down and break down. And I don't know whether it has to be the dat cos kind of, you know, really struggle and people give up on them and then we can see a bounce. I'm. Look, I. I can't figure out why we're not at 100,000, to be honest.
- [11:00]
A
I mean, I've long said that the best marketing for bitcoin is higher prices. And you can even see it when, as you said, you go from 60, but then you bounce to 70. And even if you were at 70, the day before the fact that it went up $10,000 in a day all of a sudden brings out the million dollar targets again.
- [11:15]
B
Right.
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A
And if you look at any of the data, the whole show yesterday was on the history of weekly RSI being oversold, which is where it is now. But that then you have a 150 to 250 day chop consolidation period before you head up. Not a V shaped recovery, which I think is what people are looking for. So maybe we go between 55 and 75 for the next six months.
- [11:37]
B
I'm kind of in that camp because I look at it as say the agnostic people. Right? You already have the people who are fully committed to bitcoin and are in. Then you've kind of got the Peter Schiffs who are never going to buy bitcoin no matter what. Then you got a lot of people, okay, dabbling and stuff and say you were attempted, say you were attempted to go from 0% allocation to 2% allocation or whatever you know, people are recommending and you're that close. And now you've seen the price action for the last three months, you're kind of like, eh, maybe I'm going to wait. And you know again, if it's really going to a million, doesn't matter if I buy at 70,000 or can I buy at 90,000. So I think that marginal buyers out of the market right now.
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A
Yeah, one of my best by the.
- [12:12]
B
Discount I think they're more concerned by the narrative going away.
- [12:15]
A
One of my, I keep bringing him up but one of my best friends who was a Citadel guy and now has moved on somewhere else that I won't dox. He finally started buying the ETFs when he was in between jobs and was allowed to trade for himself because he wasn't actually allowed to do anything. And he started buying in the hundreds. One of my best friends and it was trading all the way down and I keep getting the texts and then when it really was down about 60, he lost the excitement for buying. To your point, it wasn't that he didn't want to average a bit. He said this thing trades like shit. It's broke it. He's like, I've looked at markets forever. He's like, I've never really tracked bitcoin. I was like, well look at the history. He was like, he's only been looking at it since it was already at an all time high. And he says this thing trades like crap. It trades like garbage. How do I value it? He's like, I'm not saying it's a worthless asset. I just don't even know how to look at it. And I think to your point, that's how a lot of the people we've been expecting to come in have viewed this price action since we had a little bit of a hype moment going up to the 120s.
- [13:08]
B
Right. And it really didn't participate in the quote unquote debasement trade. I think that was overdone. But again, like, that was kind of a hit to it. It's like, okay, if this was going to work with inflation, it's digital gold. It didn't perform like gold did. I think all those narratives just make it harder to get convinced where this is headed. I think there'll be a time and place again, but I'm kind of cautious right now because I don't see the new adapter money coming in.
- [13:30]
A
Yeah, there's so much nuance in the gold narrative that will never be captured by mainstream headlines whereby those new people coming in. Just because it has the properties of gold and could be like gold does not mean there should be an expectation that price follows gold or trades like gold. And people just can't understand that. You can tell properties of bitcoin versus gold, but doesn't mean everyone's going to buy it for that reason the minute gold goes up.
- [13:57]
B
Yeah. And again, I think like you say, your friend's probably a great example. Everyone's just watching this and the narrative, like, okay, it's not. It doesn't have that vibe right now.
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A
Yeah. He sent me a text in the 60s. He was like, what are you doing here? How are you handling the bear market? And I said, I love this. I'm buying bitcoin. He said, I hate when you say that. I sound like a weird fundamentalist religious fanatic who just wants the price to go down so that I could buy more. Maybe he doesn't view it as a savings account like I do. And listen, even from the most crypto native hardcore supporters, right now we're getting a bit of narrative shift. Right. And I think that's reflective of what we just talked about. Crypto's age of speculation may be over, says Galaxy CEO Mike Novogratz. He was on cnbc, actually. What he said was that crypto has primarily traded on speculation, continues to, and that there will eventually be a shift to when it starts to trade on fundamentals, but that when that happens, it's going to be real world assets with much lower returns. Basically, it's going to Trade, like other things, the age of speculation and huge gains is likely over and we're in that transitional period. I've once again kind of one of the narratives I've been toying with in my mind is that a obviously the hot ball of money, as Dave Weisberger often says, went into silver and gold. I would say the crypto money really went into silver, not to gold because that was more of a speculative kind of frenzy. And prediction markets and the people who would have been more likely to buy and sell crypto and speculate on it have found greener pastures to do that. And when you take that away, you know, the emperor has no clothes and people aren't really buying most crypto for fundamental reasons.
- [15:34]
B
Yeah, I think that makes sense to me because the one thing I still struggle to understand is, you know, you get those wipeouts where people have these 10x20x exposures and you know, you're down 3k and it goes down 10k because people are getting liquidated. I don't understand who still trades that way unless it's kind of a gambling sort of trying to get rich quick sort of scheme as opposed to. So I think that layer almost has to be taken out of the market. Right. And okay, like we don't need to be degen gamblers here. We can actually, you know, put this as part of our portfolio, add in, sell a little bit. I also think one thing that's going to keep it a little bit more to the, you know, constrained even on the upside. I do think you are going to get sellers now. People are going to trade this a little bit more and the whole idea of Hodl and diamond hands, that's all great. But if you can actually sell 120 and buy 80 periodically, you know, that's a really good return. So I think people have to risk manage this a little bit better too going forward.
- [16:25]
A
Nine out of 10 people who come into this market are not buying it because of their libertarian values anymore. I guess that's the positive and negative of going mainstream. You can't expect the mainstream to buy it on the same narrative that somebody did in 2011. They're buying it the same way that they're dollar cost averaging into spy or buying the QS or considering where bonds go in their portfolio. Whatever view it is, it's a small allocation and they're not going to be diamond handed forever.
- [16:56]
B
Right. I think again you make a great point on silver to me. Right. Part of what caught the silver thing is everyone kept looking, why isn't Silver rallying. Why isn't silver rallying relative to gold? All of a sudden it started catching this bid and I was like, oh, now it's going to catch up. And you had that flood of money that kind of forced it to catch up and then you have to time that right to get out. But I think you're going to see more of that, this asset allocation. People look, what's rich, what's cheap, what narratives changing. And again, that's probably my still biggest concern right now is there hasn't really been a bad narrative for bitcoin. It's not like the President came out and said we hate bitcoin. Nothing really. Yes, the, you know, the bill's taking time to get past, etc. But I still haven't seen like this negative, you know, narrative. And yet here we are. And that was one thing I was always taught. You're trading. When you see a story and the story doesn't deliver what you're expecting, you want to step away because something bigger or different is going on.
- [17:50]
A
Yeah, well, we've had nothing but tailwinds and nothing but downsides. I think it's a pretty obvious case you can make for that right now. On the positive side, we did have this news. New Wall street investment bank Goldman Sachs revealed it holds 1.1 billion in Bitcoin, 1 billion in ETH, 153 million XRP and 108 million Solana. I think that came to a surprise of many people considering how conservative Goldman is. By the way, like these numbers, 2 billion, 2.4 billion is a rounding error for Goldman.
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B
Right.
- [18:23]
A
So like, as big as those numbers sound, when you start to talk about the trillions, it's a literally drop in the bucket. But it is interesting that they are holding this personally on their balance sheet and that David Solomon himself has been or Goldman's represented in these White House meetings that we've been hearing about. And he's even speaking at World Liberty 5 Forum in Palm beach, which of course is Donald Trump's own defi platform.
- [18:46]
B
No, I think you always want to listen to what Goldman's saying. It's, you know, I've worked in the investment banking business for a long time, unfortunately, but you know, Goldman is probably the most organized. They generally are fairly slow to move, but when they move, they are very good. And probably more than any other bank, I think they're willing to cannibalize existing business if they see an opportunity going forward. You know, you go back and you know, Archipelago, which was a stock Trading platform. Goldman actually started that. Right? Goldman owned it. They saw the direction this was headed. So yes, I want to pay attention to what he's saying, what he's doing, because I think they are probably the best at willingness to cannibalize current revenue if they think there's going to be more revenue from some other product going forward. So this is a neat shift. Again, it's kind of a rounding error. It's very unclear, but whether they own it for market making purposes, whether they own it as custodial for some client or something like that. But you know, him speaking is going to be key and you know, they are a leader in how the entire business thinks about these things. So they're very small firm. Academy securities is trying to figure out how to participate. Our CEO loves crypto. Chris Perkins, who I think you know is on our advisory board. He's very involved in the space. So we're trying to move forward on this too.
- [19:57]
A
Chris is about as much of a crypto bull as he could possibly have on the board. So he was on here two weeks ago, probably on a Wednesday. Really interesting stuff. And as it said in that piece there, Goldman represented at this White House meeting, which I believe was yesterday. Banks, industry all coming together to meet with the White House to try to get the Clarity act passed. This is the second such meeting in as many weeks as, but nothing happened. White House stablecoin meeting ends without a deal. It's being sort of positioned as a stablecoin yield argument, but it goes a lot deeper than that. Obviously there's four or five talking points that the industry is not thrilled with. The bank wants obviously this genius act yield loophole sort of reversed. And then there's all the ethics clause parts I think, you know, between the Trump family and the Democrats. But interestingly, we're starting to see at least the narrative coming from the White House himself. Coinbase is blocking the crypto bill. He said recalcitrant actors are blocking the crypto bill because they'd rather have no legislation than one they dislike. He added that banks and other crypto firms are united against Coinbase. I'm confused. Last time I checked, Coinbase doesn't have a vote in the Senate or on the House floor and doesn't sign bills. So how can it be Coinbase's fault that this is not getting done?
- [21:18]
B
You know, I suspect that that's probably a simplification of the narrative. You know, maybe they're just an easy finger to point at right now. So, you know, I, I, I tend not to listen to too much of the noise that's coming out of this. Everyone's kind of positioning, you know, let's see where this goes. It does seem shameful, not shameful, maybe, that we can't get something passed because, you know, that does seem to be this last stumbling block. And yes, the fact that it's not getting past has hurt crypto. So maybe we get a bounce. I. I'm still not convinced, though, that getting this passed at this point. I think it's a sell the news type event, to be honest. I think it passes, we bump to maybe 75, 80,000, and then you sell that news until we figure out what's really holding it back.
- [21:54]
A
Yeah, I'm not convinced it's even to sell the news. I'm pretty convinced that it's a nothing happens. I think that's kind of the problem that we've had. And it actually makes a bit of sense to me that bitcoin is traded back to Donald Trump's election prices. Right. Because there was so much hype from May until November when he was elected, basically from the bitcoin conference when he really broke out, that he was going to get the support of the crypto industry and the Genius act and the Clarity act and the reversals and regulatory stance. I think maybe those were all sadly priced in. I'm not saying they should be. But all of that was presented as inevitable before the election. So even as it started rolling out, I think it was anticipated and now we don't even have the Clarity Act. So I don't see it as a huge catalyst for price.
- [22:46]
B
No. And one thing that's maybe going to sound slightly crazier than usual is I've been looking at price action across a lot of things over the last, say, three, four weeks. Right. We've had some big rotations, and to me, there's a bit of an underlying theme that it's kind of the anti Trump trade. So things like uranium have been selling off a little bit, things that there's no change in. And so I'm wondering if there's some kind of betting going on that the midterms are not going to be favorable for the Republicans. Like, when I start looking at the sectors that have done well or not, I feel like there's this, a bit of a trade, like, hey, what if the midterms go badly and we don't get all the things we're expected? And that would kind of help explain why bitcoin was selling off along with some sectors and tech and things like that, while at the same time, things like gold were rallying. So I think that could be a little bit an underlying fear here about markets.
- [23:34]
A
I mean, I know we've only got about five minutes left, so is there anything on your radar that I'm totally missing here that you've been watching closely before? I just fire off a bunch of irrelevant questions with limited time.
- [23:45]
B
I think the one thing people are not talking about that I think is going to happen is one, I think Cuba's a done deal. Cuba's somehow going to fold into some sort of agreement with the U.S. i think we're going to see attacks on the cartels in Mexico. I think ahead of the midterm elections, he wants, with Sheinbaum's blessing or help or leadership, to get rid of the cartels as much as possible ahead of the midterm election solves a lot of issues for him. It lets him flex the military power. We set a new set of precedents in what we are doing in Venezuela. We are attacking drug cartels in Venezuelan soil. We are shooting at the drug boats. I think that's something people aren't talking about yet, and that could be very disruptive. Is successful, though. I think that really sets the stage for a real rebound in the Mexican economy.
- [24:31]
A
Those are not even on my radar at all. So that's actually very, very interesting. I'm curious how Trump can reverse what feels like an inevitably bad midterm. As you alluded to the polling, not that I trust that anymore, has let us down as badly as government economic data, but it seems like inevitable that the Democrats take back either the House or the Senate. Most, most likely the House. And by the way, I don't even know that that's an indictment on Trump. It happens effectively every time that one party is in control at midterms. You know, it swings the other way. Very, very easy to scream from the sidelines. All of your points. Very hard to govern.
- [25:10]
B
Yes, I think that's universally true. And I think, you know, this day and age, I just look at everything. It's, you know, 20% love instantly what someone does, 20% hate instantly what someone does, and the 60% of us are trying to figure out what it means are flooded up by the 20% on either side who get all the airtime, all the attention. It's, you know, even my Twitter stream, which I love, Twitter in general, it's getting harder and harder to siphon through and figure out who's actually giving me some useful information versus just random noise that's not helping me make a decision. And that's something, you know, I travel across the country talking to leaders on the asset management side, corporations, states and municipal government. And I feel like you could pick 20 people at random who are decision makers and we all become close to an actual decision on a lot of things that wouldn't be too far. And that doesn't seem that that's what's getting represented by this administration or the prior one. Like the middle board is kind of left to like wondering why the hell we're here.
- [26:07]
A
So anything else that's highly on your radar before I let you go? Seems like we've covered most of it. I'm you sounds like you're in the bitcoin might chop sideways for a while camp that I'm listen I change my opinions on a weekly basis, you know, based on new data. I don't know.
- [26:23]
B
So I think the one thing the market is missing, we are going to get three cuts. I don't even care about this jobs data. We're going to be at 2.875% on fed funds by September. That's what the Trump administration wants. We're going to be under 4% on tens Warsh will do things to do that. I think the market is not yet accepting that too many of my colleagues are still thinking, well, this is how the economy is playing. This is blah, blah, blah. And the reality is this is a completely different administration. Anyone who thought we were going to go and snatch Maduro in the middle of the night and thinks we're not going to do some form of yield curve control is insane. Right? This isn't a government that they've told us what they want. I listen to Besson, listen to what Besson says he wants on rates. I think we get that.
- [27:01]
A
Yeah, I totally agree. All right, Peter, thank you so much. I got a flight catch. I'll be doing this show live there tomorrow from Bitcoin Investor Week, which is pretty cool. Got some really great interviews lined up, but I look forward to having you back on the show very soon. Thank you, Peter.
- [27:17]
B
Awesome. Take care.
- [27:18]
A
Have a good one. Bye, guys.
- [27:33]
B
Let's do.