← The Wolf Of All Streets
The Wolf Of All Streets
Bitcoin Near Record Levels - Will The Crypto Rally Go Parabolic? | Macro Monday
01:02:44
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- [00:01]
Mike
Bitcoin came within $1,000 of its all time high nearing record levels while Ethereum made its highest close Since I believe 2021, also pushing towards its own new all time high. Crypto markets seem to be heating up once again. Is it time for them to go parabolic? We're going to discuss that and everything in the macro of course today from Macro Monday with Mike, Dave and James.
- [00:27]
Dave
Let's go, let's do Good morning and.
- [00:45]
Mike
Welcome to another edition of Macro Monday. Before we get started, I haven't said in a long time but subscribe hit the like button. Do all the things that you need to do on YouTube to make the algorithm love us. Go ahead and bring on James, Dave and Mike right now. Good morning gentlemen. How are we?
- [01:02]
Dave
All good?
- [01:04]
Mike
Mike, do we trust a Sunday pump? You know we got that move up. I'm gonna let you do the morning meeting but man I'm always. My spidey senses go off when it happens on Sunday, right. You get up to thousand bucks from the all time high and then of course markets start opening across the world and down. That's how it goes right back to where it started. So Mike, what's happening with the morning meeting? What do we got?
- [01:28]
James
Yeah, be nice to see risk assets still going up but just starting with Anna Wong accepts the basically a synopsis. Expect CPI and PPI to come a little hot. CPI is expecting 3/10 fastest pace since January. Expect that to be a headline 2.8% annualized which is still rising from PPI. She's a bit concerned expects Core to run 3-4/10 as a pressure part of the PCA deflator. Quite hot due to financial services not good for Fed cut prospect prospects. Expect retail sales to be stronger 1% stronger. Autos front running the tariffs and Amazon prime had a pretty good Amazon prime period. The control group though she expects is running 0.2 to 0.3 real. It's not really a sign of a strong economy. Ira Jersey, our chief rate strategist says he expects the bull steep winner to continue the rates. The auctions were not so great this week. They all had tails but he still expects rates to drop below 3%. I think he meant next year. I didn't get the exact timing of that. Overall expects that Steve Moran's not going to make a big deal on the Fed. It's just more that tilt towards dovish leans. Gina's keywords I caught out of her comments three to four times she mentioned deceleration in earnings and prices. Obviously we've actually, you know, two full years of 20% gains and broad mint index is waning a little bit. But concentration risks the things she's been pointing out forever. Her quote was the tech markets actually becoming stock pickers market. She pointed out that there's a about a 5,000 basis point difference between some of the top best performings in tech and the rest of the bulk of the space. And so deceleration here is their key thing. I started out with spoken on responding to Trump's headlines about soybeans. It's a wonderful thing and that's called superabundance. And that word soybean should be in the same sentence. It'd be nice if Trump can help that happen. But there's just stocks to use in soybeans in the world, about 33%. The average is close to 20%. There's massive supply on the back of the big pump in prices. This is all kind of the lessons of Jeff Booth and that is we can bring in more. You know, it's just technology is moving so fast. So that is kind of a pipe dream. The US only exports about 40% of the soybeans now in the past it was 50%. We don't because there's just too much supply in the rest of the world, most notably out of Brazil. To put that in context, the latest numbers are Brazil and Argentina are going to be exporting over 100, about 110 million metric tons of U.S. exports. Half that and our exports have been the same for about 10 years. It's just taking off more supply and demand from China's declining. So I pointed that out. Same thing's happened with crude oil. It's a super abundance glut on a global basis. When's the last time we heard a demand estimate reversion that went up for crude oil? When's the last time we heard a demand estimate revision for a global GDP that went up? They're all heading lower and yet supply is still increasing. Although we're getting to that stage where the US supply might be curtained a little bit because of one key factor, lower prices. And I point out we even have a super abundance in natural gas in this country. Every single time it pops up, it goes down and starting to do that again. Front contracts below three. The January contract, the one that matters was around five a few months ago. Now it's dropping down lower. For natural gas to go up, you basically need the second year in a row of global of a colder than normal winter. Last year was amidst global Warming and I pointed out that, I still pointed that the one thing that the gold market loves, it loves Mr. Trump. I think that August 1st firing of the BLS leader when he didn't like the data. We'll go down in history. Maybe akin to the Nixon shock in August 15th, Sunday night, 1971 when Mr. Nixon took us off the gold standard, it was just a shock. So anything Mr. Trump says is great for gold. So I think it's just basically it's a matter of time. The gold pops to 4,000 an ounce. It's holding good support at 3,300. And I think the one key catalyst for that could be is this little back and fill and risk assets, I. E. The US Stock market and one of the top risk assets on the planet is Bitcoin.
- [05:50]
Dave
So let me get this straight Mike. So firing the head of one of the most demonstrably incompetent agencies in American history is akin to the event that has triggered the greatest wealth inequality and greatest financialization spur in all of history.
- [06:10]
James
That's a good opinions there Dave. I really respect your opinions.
- [06:14]
Dave
I mean, I mean, wow. I, I, I don't have words but I do think you said something which James should talk about first, which is the bond auctions last week. Anything hugely significant there? Because obviously you follow that one like a hawk.
- [06:27]
Scott
Yeah, I mean the tails are never good but we have, we have so much supply come to the market. It's, you know, they're trying to figure out where the demand is along that curve. And that's the challenge for the, for the treasury is to meet that demand right down the middle. So when the market knows what, what's coming to the auctions and it's, it's usually fine. It's the, it's some of the unexpected sizes that, that, that usually push those around, those, those yields around the tails around. It's just the, the tale for the people who are listening who don't know this. All these bonds trade when issued in the market before the auction. And so investors have a pretty good idea of where they are willing to buy what, what kind of yield that they're demanding before the auction. And when the auction comes and that demand is, is lower and the yield is higher, that's a tail. That means that the auction didn't go as well as you know, the, the treasury wanted or hoped or, or needed. So but it was nothing, you know, out of, really out of place. I mean we, we're seeing tailing auctions quite a bit. It's you know, when we start getting big tails in the 10 year big tails and really big tales in the 10 year or the, or the 30 year, that's, that's problematic but because quite honestly the, the, the Treasury's got to move out on the curve soon or else they're just going to continue to pile on this, the, the T bills and eventually you know, you're going to have to move out on the curve with much supply to get out of, of the 2 week, 4 week, 8 week t bill market that it's gonna, it's going to push those rates higher. Which is where I think Mike and I probably differ the most on, on our belief of where these yields go long term, you know, short term. Yeah, we could have, we could have a contraction of, of rates and, and, and these yields come in. But that would be economic reasons, structural reasons for yields to go up is that investors are demanding yield premiums, you know, demand then they're looking for premiums on the, on the, on the curve. So rate premiums. And that has to do with both inflation worries and worries that we're just going to have a deluge of bonds that come to the market and the demand won't be there. So I don't see, I didn't see last week as being major warning signals but it's yet again just weakness that that is, that's not welcomed by the Treasury.
- [09:13]
James
So let me open a little, just a little bit of global macro here. Last week Friday, Canada unexpectedly shed 40,000 jobs and their jobless rate is running 6.9%. Now obviously when I traded Treasuries we looked at Canada sometimes as leading and lagging. It's always just take 10 times Canada and that's what U.S. is. So maybe that's something we have to the whole world's focusing on looking at. And then you look at world bond yields, I just, here's my simple indication. 1.7% in China 10 year notes US 4.26% Canada 3.35% we were 442. I love 442 because before the unemployment number because it reminds me of the Oldsmobile car I loved in the 70s. But that to me is my indication of what to look spec for US bond yields. As long as you a stock market and Bitcoin stays high, maybe you're okay. But one thing I want to mention 442 is since we printed that US unemployment number, US 10 year note yields been running around 426. So it needs something to shift that otherwise to me the Risks are it files things like crude oil and soybeans and copper and goes down.
- [10:18]
Scott
Yeah, I mean look, the, the, we're getting, we're clearly getting a softening in the employ market. You know, the question is, can we get that landing that is soft enough that the, that the, the Fed is going to lower rates before we hit that spike in unemployment before we hit a, a recession. And my, my worry is that this Fed is operating in, in such a lag that they're gonna, they're gonna miss the mark again. You know, they missed it on the way up, they're going to miss it on the way down. And if that happens, you know, all of, you know all of what you've been talking about, Mike, the mean reversion will be forced. I mean that stock market will contract pretty rapidly. Risk assets will contract pretty, everything will correlate to one again. We'll get a sharp drawdown. You know, once we get this in. And this spike can happen quickly. We've seen it before. It happens in matter of weeks. The problem is the Fed is lagging in matters of months. And so that's what, that's what the. You, you got to get that sense in the, on the bond market, like where are we going to shake out here? And now you've got the, the futures, the, the Fed funds futures are showing. I'll share this. You guys can see it. Share screen my window. You got this, Scott?
- [11:44]
Dave
Yep.
- [11:45]
Scott
So now we're, so just go back a little over a week ago, actually. It was, it was before this, right? It was the week before. At the end of July, you were seeing a 67 chance of a rate cut in September.
- [12:04]
Dave
Right.
- [12:04]
Scott
A 3% chance in July. We know that didn't happen. But now today that is back up to almost 90%. It's 88 chance of a rate cut in September and then another one in October and another one in, you know, in December is. So there's, there's somewhere around two, two and a half cuts that are, that are implied, that are, that are expected in, in the curve right now. So where do we come out? And that's that, That's a big question for investors this week. And we've got both the CPI and the PPI coming out this week. We've got CPI tomorrow and we've got the PPI then on Thursday and jobless claims. And then of course we get our soft indicators of, you know, University of Michigan. Here's the one that Michael, you know, Michael, Michael, 600 people, baby, six, 500 of them are extremely liberal. And then, you know, you've got, you've got your unemployment numbers and this is the one that, that, that I expect Mike and Bloomberg to, to hone in on that will be less talked about. But the retail sales and the import prices. So it's, it's a pretty big week quietly. A big week in, in the economic indicators category. So we'll see.
- [13:39]
Dave
And yet the traders are, are all in the Hamptons. So, you know, and.
- [13:43]
Scott
Yeah, the traders are all in the Hamptons. That's right. And yet it's so quiet. It's, it's, we're in the depth of August. I mean, Europe is not even, they're not even in the office.
- [13:52]
Dave
No, no. Yeah. I'll never forget, you know, trading Italian stocks and trying to get something done. It was the year of the, the pound issue and we had some really big things to get done and effectively we started moving, we started selling, started moving the market down. I am told that what I was the trigger man for on behalf of a large hedge fund caused all the, the trains to be flooded from people coming back from the Amalfi coast back up to Milan. It's actually kind of funny, but because you can look it up in the summer of 92, what happened in the Italian markets in August, it was actually rather amusing. But yeah, I mean, you know, it's like when you look at this stuff in summer months and you understand that what's going on in with the Fed is, is effectively, you know, a political tug of war, I have a more crass way of expressing it, but I'll try, I'll try to be nicer for the, for this show you between Powell and Trump. I think it's interesting. The question is, right now it seems like the consensus of a lot of economists is if the Fed cut rates aggressively, that the long end would go up, you know, rates would go up. I personally think they're wrong. And I think that when you see 90% and you see rates trending down at the same time that the likelihood of a cut goes up, kind of puts paid to that as opposed to the, you know, the, the last time everyone has recency bias and what they think is going to happen. The one thing that I do know as far as summer trading goes, and that's why it's actually really interesting, is that ranges don't tend to get broken in the summer. I mean, it can happen, obviously, but, you know, generally when you're in a trading range, it stays there. And so people get really excited as you get toward the top of the range like we did yesterday, or to the bottom of the range like we did last week. At least in Bitcoin, you know, it matters, right? You know, Ethereum is different because it was so down for so long. It, it doesn't have that same sort of trading pattern. But the most interesting thing I thought from your Sunday question, Scott, was if you look at liquidations and go back 24 hours, they're even and they're not that large. So we had a reasonably sizable move on even.
- [16:09]
Mike
Short and long.
- [16:10]
Dave
You're saying short and long. Long liquidations, 203 million, short 208 million. So generally when you get that kind of a rip, it's liquidation fueled. It wasn't, which is surprising, or at least not hugely. I think it's just lack of supply on the weekend and someone buying dumb. And I talk about this a lot and I'll get on my soapbox for a second because I've just done. I'm waiting for compliance approval to publish an analysis of things, but I can tell you that I've been looking at coin routes, institutional TCA, and on, you know, $200,000 minimum cutoff orders, which averages out to the millions. The market impact when you use good algorithms is in the single digits of basis points for, we're talking large orders, you know, multi million dollar orders here. Yet on the weekend you see these idiots buying or selling, you know, whichever way the move goes, and it moves the markets whole percentage points, which is like 10 times the market impact that a well done trading strategy would. Now it turns out that during the week there's enough liquidity that we don't see it as bad. But the simple fact, and I know I use those words too often, but it is so obvious that there is a lot of dumb trading in the world of crypto. Now, sometimes people do it for a reason, right? If you're trying to trigger a liquidation cascade, which by the way, in most markets would be considered illegal, but we won't go there. Obviously, market manipulation, if you're trying to do it, then you buy really sloppy or you sell really sloppy. But I think that's all we saw this weekend is I thought we saw some sloppy buying people saying, okay, I got to get in now, and you know, I guess it's okay, so let's just do that. And they just got it done and that pushes the market and you see that sort of thing, you know, less and less.
- [18:02]
Mike
Does that mean somebody wakes up in the morning, it was like, oh, these dummies just said price 4000 high, I'm taking profit. Like, is that how you explain that the get set smackdown on Monday morning?
- [18:11]
Dave
Well, it's not about people perceive it as a smackdown, but what you're actually seeing is a reaction. It's like, wait a minute, I didn't have time to get my offers in there. Let me. So yeah, if I could sell at 122 here, I want to sell.
- [18:24]
Scott
What's interesting, what's interesting, Dave, is that the, and I, I tend to agree with you especially on Sundays like this. Late nights Sundays, you know, it just, it just doesn't seem, it seems super sloppy from a trading perspective. But then the other side, it looks, looked pretty sloppy on the way down. So. Yeah, you know, but it was about the same. Correct me if I'm wrong, but it looked like about the same volume on the way up as it was on the way down. Maybe even more volume on the way down.
- [18:54]
Dave
Yeah, that could easily.
- [18:55]
Scott
I'm just, just looking, just looking at the move from 119 to 1 to 122 and change back to 119. It looked like the, the, the. We took an elevator up and we took an elevator down. But it looks like there was at least as much volume on the way down as there was on the way up. Which is it, which is interesting.
- [19:17]
Dave
So it's the classic Bart Simpson pattern, dude. But, but, but the funny thing about the Bart Simpson pattern in is it tends to be both the reverse and whatever. It tends to be a harbinger of things to come. Right. Because there just isn't that much real supply out there. There's lots of, there are traders pushing markets around and so, you know, we had a period last week of altcoins, you know, going, led by Ethereum going up while Bitcoin stayed the same. It happens, right? You know, it's, it is what it is. But I've made it. I, I've been very clear about this. 112 to 122 has been our range. We're now going on, I don't know, what are we, nine weeks now, I'm losing track.
- [19:59]
Mike
And it used to be 100 to 112. So.
- [20:02]
Dave
Right. So I mean, you know, we're kind of, we're here. It's nothing I'm going to get terribly excited about one way or another. The news keeps on coming, right? You know, the news keeps on coming and you know, you see some really stupid things. I laugh, but you know, I think I keep saying that Trump derangement syndrome is a clinical condition. And when people look back on it, on this epoch, you know, historically, they're going to wonder, what the hell were people thinking. There are people out there who I saw hundreds of posts about stuff like this and likes and whatever people saying, well, if Trump's family is buying bitcoin, then, you know, obviously bitcoin's becoming a political issue. It's like, it's a. It's a first level of introductory logic, basically. You know, no matter what you think of Trump, you know, broken, you know, you can come up with every analogy you want. It doesn't mean that bitcoin is the same thing as Trump and Melania tokens, which I saw a lot of people making false equivalents on. And it's just funny, right? You see that sort of stuff. I mean, the story this weekend, everyone got up in a froth about was Bo Hines resigning. I don't know that we're going to know the story there, but the person who replaces them is going to have the same views.
- [21:16]
Mike
What was that trade of all time? I was going to say, here it is. White House crypto advisor behind Return to Privacy. It's literally the greatest trade of all time. He showed up. I liked it. I like Bo Hines, by the way. He showed up out of absolutely nowhere, nobody had ever heard of him, got this huge position, became the mouthpiece for the administration and is going to go back and 10x his income in the private sector after less than 6 months. Who wouldn't do that?
- [21:39]
Dave
Yeah, well, I mean, I'm not. As I said, I don't know.
- [21:43]
Mike
They made him famous in six months and he can go now, get a job and leave.
- [21:46]
Dave
But the point is the thought that whoever replaces him, and I guess the guy who's moving in is just as exactly the same views, is going to be a crypto skeptic or something like that is just silly, right? You know, it's just so you get these silly narratives. And in it, in this world, I think people are searching for a narrative. It's right. People are searching for it. It's like when Mike was talking about commodities. It's so important to understand the importance of what he was saying for people. If you're trading commodities and, you know, you can call it superabundance, you can call whatever the hell you want. I call it elasticity. The fact is our technology is better and it continues to improve at extracting stuff out of the ground and refining it and processing it and reclaiming it. And so when prices go up, you can spend a little bit to enhance supply and that keeps a lid on price. And that is so important in most commodities that it is well understood except for people ignore it. And so people like, you know, the straits or hermos are going to get closed for a week. Okay, whatever. And the price of oil doubles. It's like, are you kidding me? It's like, you know what's going to happen. It happens every time. And Mike, you know, you know, nails it every single time when you see these things. The only two exceptions are one, when it's government imposed. So if we end up with massive tariffs on copper externally and the need for investment in the United States. Yeah, okay. Copper prices are going, input prices are going to go up until supply can come online. Yeah, okay, fine. The other is bitcoin, which has no elasticity of supply. And so treating it like a commodity in the same sense it has elasticity, price elasticity from holders who sell it. But it's the same as gold out of the ground and gold coming out of the ground and gold that you pull out of the ground. That's the difference. There is no elasticity to bitcoin come, you know, being created. There is elasticity to bitcoin holders and, and we've seen that.
- [23:46]
James
The, the unique thing about bitcoin, as we all know is there what's. Let's piss off day without trying. In 2009, there was one cryptocurrency. Now there's 19 million. Okay, sorry, you can go with that. We'd like. In 2009 there was four precious metals and now there's still four precious metals. So I'm still bullish gold. I still think gold's gonna outperform bitcoin and bitcoin still needs its good test. But the key thing that's different about bitcoin now is there is no excuse if it drops what it does and normally does and drops 50% because now it's completely, I think one of the most systematic, I said systematic, not systemic, risky assets I've ever seen. We see Treasuries jumping onto this asset. We see a high volatility, high correlation in the stock market. I mean the whole thing is just what you expect that we're going to have to write about from the futures. Yeah, we got a little silly. Too silly. Expensive. And market jumped on and did what he always did is. Yeah, I get, I love how Larry Lopehold pointed that out. We pointed this out a decade ago, but that's the difference now we have become extremely financialized the masses are involved, all buying ETFs, and they're jumping on the last big trade. We've all seen this before. The key thing about Michael Sarale, which I love, is the pretty thing to typically do, is when you get lucky enough to make a 10x on an investment, it's not double down. And he is, he's getting people to join him. So I just look at the risk as extraordinary here. And I think most risk managers on the planet are saying, you know, if there's going to be a problem in all markets, might start with cryptos and I might want to be careful and have some kind of protective put there, because if they go down, it takes the system down. And one thing you have to remember right now is we are completely dependent in this space on the success of the Trump administration.
- [25:24]
Mike
The puts are there. So hold on there, just to be clear. Elevated Bitcoin and ETH options, open interest signals, cautious positioning ahead of Tuesday's CPI data. I don't know that has anything to do with Tuesday's CPI data. But, Mike, to your point, whether they're right or wrong, we have one of those rare moments where there's more puts than calls on Bitcoin and Ethereum right now.
- [25:43]
Dave
Right. So it's just insurance, though, is, is gonna arb that out. Look, I, I want to respond to two things. First, the four precious metals. You gave me the opening. Yeah, I feel like Saquon barking.
- [25:54]
James
Come on, this is fun.
- [25:55]
Dave
There were four precious metals, there's now one precious metal. Gold has demonetized. Platinum, palladium and, and silver. Now there's one winner. And, you know, it's like it's. And it's, and it's intensely obvious. So there was, it was interesting. Lynn Alden had a, a chat going back and forth with someone, I don't know who it was, that had started talking about the gold silver ratio this weekend, which I read. And the gold silver ratio went from, you know, in. For thousands of years, it effectively, it used to be silver was easier to get and then. So it was closer to gold. It was like 3 to 1 or whatever, but it's 15 to 1 in the Earth's crust and it more or less is between 10 and 15 to 1. For thousands of years, it started dropping. It started going, not dropping, rising to where gold was more valuable and effectively demonetized silver as silver's portability became less relevant because the gold was being held and people were paperizing it. And ever since then, it stayed the same. Gold demonetized Silver effectively and is trading at a dramatic premium to you know, based on its monetary value, gold. Platinum is even worth talking about. Platinum is 30 times rarer than gold, more valued in jewelry by most women. Certainly my wife enjoyed, enjoys her platinum engagement ring and, or you know, which is, which was actually the 10 year anniversary ring because we upgraded her engagement ring instead of buying landscaping, but it was platinum with, with larger diamonds. That was back when I was almost.
- [27:22]
Mike
Bitter about that at all.
- [27:23]
Dave
It seems like you really not bitter at all.
- [27:25]
Mike
You didn't want that landscaping, you definitely wanted that platinum.
- [27:27]
Dave
That house is long sold. Scott. Don't care. You know, it's like, you know, we've been married for 26 years since then, I mean believe me, it's, it's fine. You know, that was the 10 year anniversary. But my point is, is platinum, despite being 30 times rarer, used to trade at dramatically more expensive than gold. In fact to these this day, if you look at the way conference sponsorship goes, you got silver, gold, platinum. Except for the fact that gold is what, double to triple the, the price between like two and a half times the price of platinum these days. So you're, you're saying that's the natural evolution now as, as Bitcoin versus cryptocurrencies go, Scott and I both have a major problem. I have a major problem with that because frankly none of the other cryptocurrencies in my mind are cryptocurrencies. They're crypto assets, they're digital assets, but they're not cryptocurrencies, they're not designed for that. There's no, there's no scarcity, etc. And yeah, the XRP people, yeah, and the Ethereum people, you can call them whatever the hell you want to call them Ethereum, literally. If there is not if it's not going to be demanded, if you're not going to need Ethereum to build platforms on top of crypto, then Ethereum's price is going to be lower than it is today. It's a 500 billion dollar asset based upon the demand that people think for the world computer. Not because it's going to be a currency that people are going to trust because Joe Lubin and his company ICO'd it. That's just not going to happen. And the same thing, I would make the same statement about xrp. But look at the end of the day, Most of the 19 million fell outside of the top one or 200. There's no competition. It's not even relevant. It's, it's no more of a competition than the. Than than the local numbers rackets are to the stock market. Yes, they're both gambling. People gamble in the stock market. People gamble casinos. People gamble with their local bookies. You know, there's all sorts of stuff. It's all gambling. But no, it's not. Not true competition in the sense that, that, that bitcoin has demonetized everything else in crypto already. That' dominance is in the 60s or whatever. But it's a kind of stupid thing because you're comparing apples and oranges. But you know, we, we hear about it every week and I, I'm just tired of, of the, of, of that particular statement. But, but I, I do think there's something very relevant here which is. Is when you start talking about. And, and you said it right. Volatility matters. So let me see if the share screen. Right. This is important. This is the bitcoin. Is it working, the bitcoin volatility index? It is now that's at six months and you can see it's at, it's at a low. You know, one year low, five years pretty close to a low. We had a little Nader right here that got a little bit lower all. Now you're. And you could see the wild swings. When's the last time we saw this? Or you have to go back to 20 before you saw these things. So we're in a totally different world. And, and if you look at any of these charts and you come to the conclusion that bitcoin isn't maturing as you say, it needs to prove. This is your beef, Mike. This is, this is.
- [30:40]
James
I completely agree. It's proven it's maturing. But I disagree with. People say it's a risk it's going to go up if the stock market goes down. Like even that people are missing and it's.
- [30:50]
Dave
But it depends how the stock market goes down. If the stock market goes down in a crash, you're right. Of course you're right. 100 right. No one's got. No one's arguing neither.
- [31:00]
Scott
But so will gold.
- [31:04]
James
There's. I disagree. So in a, in a crash, if you drop the stock market 10% in a week, everything goes down.
- [31:10]
Dave
But.
- [31:10]
James
Except for bond yields. But that's the key point. We're at this, the different stage now where we're seeing these correlations where it's like tick for take Bitcoin going down and gold going up. When this go. Bitcoin going down with the stock market gold going up now. Sure. If you have a liquidation, sure. But in the big picture, that would set the stage for the stock market, the gold, to just blast off and bitcoin to continue lower. It's just expect this whole space of highly volatile speculative digital assets to disengage and show negative correlation to the stock market. I think is, I just say good luck. I've just pointed out we haven't seen the beef of that yet other than every single time we have any type of plunge in the stock market to, to quote Michael Sailor, bitcoin will outperform S P500. Yeah, on the way down too, he forgot to mention.
- [31:56]
Scott
All right, so okay, I hear you and we've, we've discussed this many times. But again, just to be absolutely ultra clear, Mike, if and when the stock market does, if it grinds lower, Bitcoin could grind lower as it's, it's a lot, a lot of investors are still considering it just a risk on asset. Totally agree. That's just reality. You know, we believe that it's different, but that's long term. Now if we have a, if we have a sharp drawdown in the market, we are so financialized. These are your words. The, the, the, the US Economy is so financialized and so tied to the U. S Stock market that it needs to be successful. It needs to go up. To continue to have GDP going up nominally. It's, it's an, it's necessary, it's a necessity. So in that case, the first principle says what is the Fed going to do if we have a stock market crash? And you see which you would, you would see dysfunction in the bond markets. What, what, what do you think would happen?
- [32:58]
James
Function or lower yields?
- [33:01]
Scott
I mean it depends on what the situation is. But if you have, if you have a, if you have a sell off like we saw in March of 2020, you're going to see the Fed step in and they're going to be buying bonds. They're going to start QE again. The question is how big the QE is going to be. Is it going to be another 5 trillion or is it going to be 10, 15 or 20 trillion? Depends on how bad it is. You know, so, and in that case, what's going to have a V, V shape recovery? Stocks, bonds and obviously bitcoin, I mean stocks, gold and obviously bitcoin. Those are going to have, I think.
- [33:36]
James
The order is wrong. Bond yields first. If the Fed's cutting that much, if we're doing QE and they're buying bonds, start with what's going to run first however in China. China's running 3, 300 deficits to GDP. There's their PPI is running 3.6% and their bond yields are dropped to 1.7%. It's already happening. My point is the second largest country is just following what happened in what was the third largest country in Japan. There's one thing holding everything up right now, it's the US Stock market. This inordinate burden is just not going to last forever. But not, knock on wood, it's great. It's August.
- [34:09]
Dave
So, so can I.
- [34:10]
Scott
My first principle is. The only thing I'm the going to the first principle is there will be more liquidity. There will be more liquidity and the liquidity drives the drives the prices of these assets. Because it's not the assets that are going up in value, it's all the fiat currencies that are going down in value. Again, describe China bitcoin.
- [34:29]
Dave
Yeah, describe the US too. If you go back to and look at, you could look at every asset. It doesn't matter. Look at The S P versus M2 and M2 is a very flawed metric, but it doesn't matter. You get the same directionality. I mean look, the history has been this. What we saw in the pandemic was a microcosm, right. You know they, the correlation is high but the beta is instable. So what you saw is a crash in both and then a, you know, where the beta was X and then a rally in Bitcoin versus you know, the stock market where the beta was 5x.
- [35:12]
Scott
All right, so I have, I have a, I have a, I have a big question, give or take. I just wanted. So let, if we can pivot a little bit. Scott, maybe you can bring this up one of the headlines of this but we do need to discuss and try to you know, untangle this the tariff situation because we have gotten into now we're in a situation where we have. Trump is now he's, he's issuing tariffs or imposing tariffs individually on companies with, I mean this is like individual company tariffs now which is a little bit mind blowing. So now you've got Nvidia and AMD agreed to pay 15 vig on sales to, on foreign sales and exports. So this is, I don't know where this goes and, and, and what is the ultimate outcome of this but I would be super interested to talk about it and think and hear what you guys think.
- [36:14]
Mike
Can I ask one that he's tariffing. Sorry, is he tariffing specific companies or. He's Just exempting others.
- [36:20]
Scott
I mean, he's exempting, he's exempting some and he's, and he's, what he's doing is, he's, he's. Nvidia and AMD agreed to pay 15 of their exports to get an exemption is how I understand it.
- [36:36]
Dave
So the whole thing is, is you can understand the reasons. I mean, the reason is you, obviously you start with the big. To try to get. It's the 8020 rule. It's classic business management. The very first thing you learn when you're running a big team is you go after the things that will net 80% of the value of 20% of the effort. Now obviously those numbers move around a lot. Right? That's what he's doing. The implication of what he's doing, on the other hand, is pernicious. And I don't think he cares, which is our country is already crony capitalist to a ridiculous extent where big companies are advantaged over small. This extends that. So I can only imagine what small manufacturers are going through right now. And that's not a good thing. And, and I'm not gonna, I'm not gonna sugarcoat it, you know, I, I will defend the administration on multiple things that it's doing. I, I hate this aspect of what they're doing because they're making it for those, those emerging growth companies that are smaller competitors. They have no way to negotiate specific.
- [37:42]
Scott
I mean, it could be seen as they're picking winners and losers. That's not exactly, that's kind of the.
- [37:46]
Dave
Same thing of what I'm saying. But it's a broad, broad based thing. The bigger gets bigger, smaller gets hurt. And that's a bad thing for the economy. I, I just don't know.
- [37:54]
Scott
Especially u. S. Economy, which is driven by small business.
- [37:58]
Dave
It's been one of my biggest bugaboos. Right. You know, it's like, it's, it's interesting. But. Yeah. So Mike likes it when I, when I, when I flip over to his side and actually criticize the administration because I'm generally pretty supportive. I think, I think I'm the token, I'm the most right wing person here. Although I'm not really all very.
- [38:15]
James
Right.
- [38:15]
Dave
Right wing.
- [38:16]
James
When's the last time you heard me criticize administration? Here's a key fact. All that matters.
- [38:21]
Dave
You started with the criticize the administration. You said him firing the head of the bls.
- [38:26]
James
Okay, that wasn't a criticism. No, I'm pointing out you took it the wrong way. Okay, let me, let me have two Minutes here we equal time. That wasn't the criticism, that was a fact of what I expect to happen in markets. The bottom line here is I think this, we have to look back from this in future. And if what Mr. Trump is doing, we can all agree he's doing something that's very much unprecedented on a global basis and certainly in this country. To look back from this future and say, yeah, we only had a 15% correction in the stock market, but it was fine, it worked out great and he ended up in Mount Rushmore would be wonderful. But it's very, very low probability event to me as we tilt past August and look forward to the future. All that matters to me is what markets. I'm a strategist. So it wasn't criticism as well. It was what I think gold thinks about. Mr. Trump is wonderful. I love you, Mr. Trump, because you push back. And some of these institutions have set the stable US Made America great historically, even the Fed independence now. Go ahead, Dave, push back. But that's the key thing, remember is what we all do. And with Bloomberg terminals, we can test and push back in every single piece of data from this government. I mean, we have an army at Bloomberg that does that. And if there's issues growing up, it's becoming politicized, it's fine. But all that matters to markets and the bottom line to me is to look back from even five years or four years and say we didn't get, we just kept running on this, you know, running the US Stock market hot at two times gdp, the most expensive ever. As this very person, significant person came into present. I'm, I'm pointing out facts of market. So here's the key thing I'm worried about now. He's completely emboldened. Now, we all knew that when he was stuck in exile for four years and got reelected. You don't mess with this person. These are the things we've been pointing out. He's going to completely stay emboldened and he's completely emboldened by a higher stock market. Tariffs will not be reduced until stock market tells it. The Fed even potentially easing would not ease much until stock market tells us to. This is the stage we are in markets based on. And also this individualize our presence. So I look for kinks in the honor arm. Okay, well, the gold, the bitcoin to gold ratio is stuck at the same level from 2021. That's probably not a good sign. We looked at, we pointed out gold silver ratio reached 100 just a few months ago. I pointed out that is expensive. But still it's, it's, there's, there's a major, seriously historic things happening in commodities like gold versus crude oil, just things like that. But the key thing is think about what it means for markets. This is not political at all. What it means to market is to, to make, to shift the world order this much and not have some major discombobulation in this country. Yes, the rest of the world's facing it. It would be unusual. I would love to be able to put that in a book. But you got to expect some volatility.
- [41:01]
Dave
Well, when you're talking about causes, I mean James, you could go and say this but effectively when you're printing and printing and printing, you get all these things that are linked. I think that you're half right. I think tariffs are going to be the stock market. 100% is the only signal that he cares about in terms of tariff negotiations, full stop. I think when it comes to yields, you got it wrong. I don't think he cares about the stock market for yields. He's looking at real estate and he's looking at the housing market and he's looking at getting reelected. And the mortgage rates. Owner's equivalent rent is so important in cpi. His economists are telling him, and they're probably not wrong, his economists are telling him that if you lowered rates, inflation would actually come down. And as I said last week, you know, you look over 25 years and the fact that we've had 20 years of low CPI with negative real rates kind of indicates that the market's perception just off of one rate cut this, oh my God, you know, the long bond. I mean and James, you talk about demanding risk premiums. I mean, yeah, there's some of that. But the reality is the data says 20 years of negative real rates with low CPI. Because CPI has a lot to do. It's a recursive effect. Right. When rates are low, owner's equivalent rent is low and that makes up 40% of the CPI. At the same time, when rates are low, companies can invest more cheaply in things that bring prices down, whether it's on shoring or automation etc. So there, there are multiple cross currents here. There is a direct link between rates being low and asset prices increasing. Absolutely. 100, you're, you're right there. But there is no direct link from rates to consumers. It is at best indirect and it is definitely there as cross currents. And I find it amazing how so called economists won't recognize that fact. Now you could argue and you could come up with models to say which side will matter most. But people who think it's a linear correlation, they're just fucking dumb. I mean, it's just, it's dumb. You have 20 years out of 25 that show the opposite. So why the hell would you make that statement as de facto true? Now you haven't. To be fair, Mike, I am not talking about you. This is not about you because I haven't heard you say anything like this. What I think whatever you say is the stock market is the key. And by the way, if anyone who thinks Trump doesn't look at the stock market, he probably has the stock ticker in his office.
- [43:37]
Scott
It's on it, it's on it all day long.
- [43:42]
Dave
Yeah, it's there. So, but, but I do think that the key is real estate. And, and look, when it comes to bitcoin in particular, Bitcoin is going to be 10x these prices at some point. I, I, I genuinely, I, I, I believe it from my, my toenails. What?
- [43:58]
James
Yeah, you put it up. I'll tell you, it's declining. Bitcoin.
- [44:01]
Dave
I didn't say it's not 10x in a minute. I said it's going to be 10x someday.
- [44:04]
James
Okay.
- [44:05]
Dave
I think that, that, you know, this, the Bart Simpson pattern is going to be a harbinger. I think we will be higher by mid September. Significantly higher. I do think all those things, but.
- [44:16]
Scott
I think you just made a view.
- [44:17]
James
On the stock market too.
- [44:19]
Dave
My view is the stock market's going to hang in there between now and September and then we're going to have an interesting October. I think October is going to get really interesting and I don't know which way it's going to go, but I think that it's, I, I'll tell you what, if I were trading volatility, I would be long, I would be long October volatility right now. And you know, you know, if there's all sorts of option strategies one could use now, I am not trading. So please, dear God, don't interpret this as, okay, let's go buy puts in October. But you know, volatility, there are, there are trades that, that professional options traders who understand. And if people ask me why October, it's, well, and I've said this before, but it's just to be clear, October is the period of time when all portfolio managers around the world get their portfolio going into year end. They don't wait till November and December. There are lots of fiscal years that end in October. So people who are taking money off the table. It doesn't take a lot to move the market. There's, there's a herd behavior in investment management based on risk factors and, and models that I can get obscure and.
- [45:25]
Scott
Talk about and potential bonus pays out payouts according to performance and where you are positioned for the next year on risk measures.
- [45:33]
Dave
That's right. So October is always the most there is. It is not, it is not remotely surprising that the biggest stock market volatility downside moves have happened in October in history. It doesn't happen every year by any means, nor am I saying it's going to happen this year, but that is the riskiest month. And so if those things that you're talking about come to roost, that's when it will happen, in my opinion.
- [45:54]
James
Well, just one, just follow up on that, just one statement. If you think Bitcoin's higher by the end of the year or at any pair any fully probably should be saying that.
- [46:02]
Dave
Yeah.
- [46:02]
James
I expect the stock market to be up too. That's my point. It's all the same though. It's just, it's the same trade. One thing, magnitude, one thing that's somewhat different is gold and treasury bonds.
- [46:14]
Dave
Gold is wonderful because it's stable, but Bitcoin feeling. All I want to say Mike, is Bitcoin ceiling is, is its short term ceiling. Short to intermediate term ceiling is gold is what is, is gold is telling you as gold rises, Bitcoin ceiling rises. That's all I'm basically saying.
- [46:35]
Mike
Would you make that point about Ethereum even if you agreed on Bitcoin?
- [46:39]
Dave
No.
- [46:39]
Mike
I guess my question is we see Ethereum making this, obviously this massive move. We have Ethereum, almost 97% of all ether holders are now in the green. We obviously know that we're ramping up massively on the treasury side. Tom Lee is out there being Michael Saylor. Let's say Ethereum, which has not made a new all time high this cycle. So let's say Ethereum is the equivalent right now to Bitcoin at 55,000. Right. Because the all time high was 69 and it was trading under it.
- [47:11]
Dave
Do you think that Ethereum is approaching right now is well over half a billion dollars in market cap. That's the number that matters now. So you're talking half a billion dollars if you believe Ethereum is going to be as essential to the modern economy as Nvidia. Nvidia is, is its cap at least today. I think that, you know, and I'm saying Nvidia because it's considered the backbone of AI. You could pick any of those other stocks and that's a very long way.
- [47:39]
Mike
But my point being then I can see Mike's point very clearly with Ethereum and down for the correlation to tech or the stock market more than Ethereum.
- [47:50]
Dave
Has to be correlated to tech because it is tech. It's not just correlated, it is. Bitcoin might be correlated to tech in terms of the way people trade, but it isn't tech. Bitcoin is a monetary asset. At least it's aspirationally a monetary asset and at least the vast majority of new buyers believe it's a monetary asset. If you're buying Ethereum as a Treasury company, you're basically saying it's not like you had the opportunity to buy a share in Linux when Linux was going to take over. I'm not kidding, it's a perfect analogy. The difference was there was no token.
- [48:22]
Mike
Inside investing in the Internet Internet companies.
- [48:25]
Dave
Yes, that's right but it's. But I don't know anybody who thinks that Ethereum isn't correlated to tech. I mean I agree with my. If Mike was talking about Ethereum this way, I'd agree completely because it is tech. There's no question that it's tech. You could put it in a Treasury company, but it is what it is. I mean if. Let's just say for the sake of argument this is stupid because it didn't happen. But let's say for the sake of argument that Red Hat, which was the proxy for Linux back when us old fogies were trading, right? You know, because Red Hat was a company that packaged Linux and did whatever. If you could by buying Red Hat, own a share in the growth of Linux, there would have been treasury companies that would have adopted holding Red Hat. They couldn't because in fact it wasn't, it was just a service company. But there were people who talked about it in those sorts of glowing terms back then but no one actually did it because it really wasn't the same thing because there was no barrier to entry. The difference is is theory in the token and the Ethereum the ecosystem there is no. I mean, yeah, I mean the, the competitors to that are Solana and Aptos and Sui etc and so if you think that there won't be indices based on. On layer ones to power the new economy, they will be. But explain to me how that's different than buying a basket of tech stocks that are going to power the new chipsets that are going to power AI. If you could explain that difference to me. I'm all ears. But I hate agreeing with Mike because it makes the audience mad. But Mike's right on this. It those, they are tech stocks. Stocks or tech assets.
- [49:52]
James
I guess it's not a good idea to piss off our audience. But, Dave, the stuff you nail about precious metals, you nailed it every time. So let's start with a hypothetical for this year. Right now, bitcoin and gold are both up 28% in the air. This is year one of Trump administration 2.0. This is going to go down in history. It might change the world. I mean, if he's right about what he's doing with terrorists, he has a spot in Mount Rushmore. If there's a little bit of a problem with a normal recession wherever, do you know what we're overdue for? I'm looking for sparks for that. That's the big trade. So here's my point. So we have bitcoin and gold up the same amount this year. The fact that the difference is historically, bitcoin's traded with three times the volatility of gold. So you're up the same amount, but you have three times the risk. And that's right now with the S&P 500 total around, turn around 10%. And if you're holding T bonds, if you're holding the Bloomberg aggregate, you're making almost 4 to 5% treasuries. It's the end of the year that matters to me. This is all that matters.
- [50:50]
Dave
Now.
- [50:50]
James
This could set the stage for the next big trade. So the market's complete assumption, markets priced in, yes, the stock market by then the year or next year, just going to add another 10. That's fine. That's one wonderful. But it's completely set in stage. It's just the way markets and human nature works. To me, the next big trade is what could happen is say we end up with the stock market up 5% to only a flat on the year. Now, that's a huge trade. And to me, that's where I think it's going to be kicking in, where we might get that stage where gold takes off, continues, bitcoin goes back down and just corrects with the whole cryptocurrency market and bonds take off and just catch up what they're doing in the rest of the world. Otherwise we just have a normal market that's doing what it's doing. But in the meantime, year one, Trump administration. Year one, Trump administration 2.0 Trump right now, I would say is the golden President, because this risk off, low volatility asset is beating almost everything, including bitcoin.
- [51:48]
Scott
But let's, let's share this one, one screen here.
- [51:50]
Mike
Just because I was gonna say, why can't.
- [51:53]
Scott
Humor me for a second? Just humor me for a second and Dave, I'll let you chime in on this.
- [51:58]
Dave
No, this is, this is all you, baby.
- [52:00]
Scott
This is, this is, this is bitcoin versus gold since the day of the election. Okay, that's, that's really the measure. It's not, it's not, you know, it's not January 1st, it's the day of the election. That's what really matters. Because effectively you had a, you know, you had a.
- [52:20]
Dave
It's like an inverse head and shoulder.
- [52:21]
Scott
Lame duck president for the rest of the. I mean, he was lame duck for years, but, you know, I mean, he was playing.
- [52:27]
Dave
He was lame for sure.
- [52:30]
Scott
I don't know. He was present by committee, whatever. I don't know what was going on. But the reality, I mean, come on, you can't, you can't argue that. But politics, just forget about the politics of either side. It was, it was, you know, it was, it was a charade. So. But this is the, this is what you have to be looking at. And this says that bitcoin is at, you know, is at 1.41 of what it was to gold on the date of the election. And that's really, to me, what is more important measure and metric in this conversation.
- [53:02]
Dave
Well, I think that. But that's, but of course that's going to be true. I mean, and look, you know, Trump is good for gold because he is happily and needs to inflate away debt just like any other smart president would have to. It doesn't matter. It's not just him. I mean, Bessette knows what he has to do. We have a $37 trillion debt. They need to inflate it away and grow our way out of it with real nominal. GD needs to go up. Has to. But the real story is whether gold, whether bitcoin will gain that acceptance as a monetary asset. And I talk about this all the time. I know I'm a broken record, but I would say that it looks like it has reached critical mass and escape velocity towards doing so, which is why I think the trajectory is the way it is. But it will not happen in. Well, I don't think it will happen in Omega candles or whatever the, Whatever the cool kids are talking about these days. I think it will happen slow and stead steady and you'll see range to new range to new range and it will grind higher and we'll look back in a few years and we'll see it there. And yeah, it'll be some big rallies in the middle. And yes, if the stock market drops, it will drop. But its correlation even at its highest is like half, it's like half a percent. So it's only half the time that it goes down when it goes down. But the magnitude has been, it's been a ratchet. The magnitude of bitcoin to the stock market is when the stock market gets into a rally or bitcoin gets into a rally off of the bottom, it moves farther and it's the, the than it does when it falls. And it's been doing that since the pandemic.
- [54:34]
James
It has collapsing.
- [54:37]
Dave
Well, the volatility is, is, is collapsed because it's becoming more mature. But.
- [54:42]
James
Exactly, that's my point.
- [54:45]
Dave
The point of if you ask me a question of what will the market do if at a date, it's not that it's path dependent. It depends how. If the stock market, it becomes more mag 70 and the indices hold in there, but there's dramatic degradation across the broader market. That's incredibly bullish for bitcoin. Why? Because it means they're going to be forced to lower rates. So it all depends on how these things go. And the how matters as much as the what. And so it's hard when you're sitting at a point in time and ask it. But in general, you're right. If the market crashes, everything will crash. The aftermath of that will be incredibly bullish. Now the question is if you, if you know that or think that, will it actually happen? Right. You know, or will people try to front run the recovery? And so, and, and we saw that earlier in the year when bitcoin started dropping. You know, when the first tariff tantrum happened, bitcoin bounced pretty quickly. The only trade I've made all year was buying bitcoin. When, you know, Scott, you know, I paid 78. I didn't, I wasn't as good as you.
- [55:47]
Mike
Right. I paid 82 and 78 and 74.
- [55:51]
Dave
Right. I didn't get any at 74. Okay. I was done. I was just, I just, I just fire one bullet, boom, done. But, I mean, you know, but so we've seen it. But, you know, we'll see. I mean, we, we'll be on here talking about it when this is happening right now. Nothing is happening right now. We're in the summer right now. We're in a range and you know, right now the mark, the stock market is incredibly low volatility. I mean I, I mean I don't know what what implies are but realized volatility lately seven crazy low.
- [56:18]
James
Just, just a week ago 30 day realized on S P 500 dropped about 7.2% on A. You know, just on a number of days. I mean for the number it stayed at that level for the lowest longest period since about 2019. So it's just starting to recover.
- [56:34]
Mike
Crazy.
- [56:34]
Dave
Yeah, it was low.
- [56:35]
James
I mean but it's, it's July, right? It was. Now it's August.
- [56:39]
Dave
Yep.
- [56:40]
Mike
Hamptons, 10 o'. Clock. See I, I had one more question. Isn't there a world. Go ahead, James.
- [56:48]
James
Yeah, no, I, I want to pull up.
- [56:50]
Scott
He had one more. We've discussed this a long time ago but just one more chart to, to emphasize a point of what Dave is saying. This is why it's so important. What's so important about this? This is, this is beginning of 2023. Right here is when Silicon Valley bank collapsed. Right here. And look at what Bitcoin did. Look at what it rallied hard because of the type of issue that was in the market. People were really scared they were going to lose all of their money and they need to put it in something that the government didn't control. It wasn't in a bank. It wasn't being held by institutions that could just siphon it away. They were worried that the FDIC insurance wasn't going to cover them, that they were going to lose their life savings. And so some people fled to what, what you're calling, you know, a fantasy coin. It. Some people fled to this asset because they have confidence that it couldn't be usurped, it couldn't be stolen, it couldn't be taken from. They couldn't be just confiscated. It's. It's theirs. And so that. This is a very, very important moment in Bitcoin history that's not talked about quite, quite as much as it should be. This is an important moment. So if and when we do get some sort of collapse, what is the collapse caused by? Is it a credit event? Is it a collapse in regional banks like this? Is it in it? Or is it something else that, that people flee to? Not just this, this gold coin, right? The, this, the dumb rock as you like to call it, Mike, you know, which is.
- [58:32]
James
I'm.
- [58:33]
Scott
Look, I have been, I have been a gold proponent for many, many years, but I happen to like bitcoin better now. And that's just me, you know, because this is the future. Bitcoin is superior in almost every single way to gold, and people are figuring that out, and that's the difference.
- [58:49]
James
So let me back that up.
- [58:51]
Mike
Go ahead, Mike.
- [58:52]
James
I was very bullish bitcoin back when it was in the 20s and 2023 when I could look forward to ETFs, look forward to having, look forward to the potential that Mr. Trump financialization of it, though.
- [59:03]
Scott
That's really.
- [59:05]
James
No, it just now, now we've had the pile on and the masses are in it. And we had. We. You know what happens when you get the pile and the masses are in it. That was one which a lot of people hated. Now when everybody loves it, it just makes funny sense.
- [59:17]
Scott
How's it different than gold? Everybody knows about gold. It's been around as a financial instrument for thousands of years. How is that different? It doesn't mean that there's not going to be more. It doesn't mean that it's not going to siphon Mike. It doesn't mean that it's not going to siphon more assets out of the other categories of real estate, stocks, bonds, you know, art and collectibles.
- [59:41]
James
So here's one difference.
- [59:42]
Scott
All of the different assets that you're trying, that you're trying to, you're trying to battle, you asked the question expansion of liquidity and money supply. Where are you going to put your money? What's the best place to put your money?
- [59:53]
James
Here's the number one difference with gold. If bitcoin does what it normally does and has a 50% backup, that's a huge systematic risk from its highly volatile crypto digital asset weight that I've never seen. If bitcoin drops a volatility weighted maybe 20 to 30%, it means nothing. That's the point. It's the, this, the, the risk of this asset, systematic risk of this asset. I've never seen anything like this. It's just too risky to be involved. It.
- [60:17]
Dave
Okay.
- [60:18]
Scott
Do you think that, do you think it's okay? So I need to go and I hear you, I hear your point. However, I'll, I'll save it. Amazon. Amazon dropped 95% in the, in its adoption phase. 95. And so this is typical of an adoption of the adoption phase of an asset. This is, this is typical. So I agree.
- [60:42]
James
And, and that's why bitcoin still has potential. It could drop 90%.
- [60:46]
Scott
I don't think it could drop 90%, but I do think it has potential to drop 50, 60, 70% I do, but I think it's going to go up quite a bit higher from here before that happens. That's my personal opinion and I. And I think it has to do with the liquidity expansion globally. And that's what you have to watch first and then position yourself from there.
- [61:06]
Mike
What you showed with Silicon Valley bank actually articulates the, the point that I was going to make or ask you about, which is that I can definitely see a world whether this happens or not. It's not my base case where as Mike says, bonds do well, gold does well, but bitcoin does well for the same reasons that gold would do well like it did in a Silicon Valley bank situation and the rest of the crypto market goes to Hades. I mean, I could dev alongside a dumping stock market. I could definitely see that, that as a situation that happens. And I think, you know, listen, there's only 94 metals, but we don't sit here and compare gold to aluminum. And I don't think we should sit here and compare bitcoin to Shiba Inu. Right. I just think that it's a entirely different thing, even though they may share some, some characteristics. So, you know, we're gonna see what happens. But I, I do at least think there's a situation where bitcoin completely detaches from those other millions that Mike talks about or that it already has. Looking forward to 1005. Yeah, it's 10:05. We lost Dave. Guys, another great show. That was the easiest one I've ever done. Didn't need to say anything. I love Mondays. Joked in the comments I could do my taxes. It's amazing. Just listen to you guys passively and get it done. Appreciate you guys. We'll see you next Monday. Thank you. Have a good one.
- [62:26]
Dave
Let's do.