Podcast Summary: The Wolf Of All Streets — "Bitcoin On The Edge! Fed Signal Sparks Big Questions"
Host: Scott Melker
Guests: Iago & C.J.
Date: August 21, 2025
Episode Overview
Scott Melker welcomes two prominent Bitcoin builders, Iago and C.J., for a timely conversation on the state of Bitcoin amidst ongoing Federal Reserve speculation and shifting macroeconomic forces. With Bitcoin holding around $113,000, the group digs into interest rates, the evolving power dynamic between the Fed and government debt, the rise of "Bitcoin balance sheet companies," and the disruptive advance of stablecoins. They also touch on innovative Bitcoin-backed mortgage solutions, offering real-world insight for holders seeking financial flexibility.
Key Discussion Points & Insights
1. Bitcoin Market Sentiment and The Fed’s Influence
00:01–04:07
- Context: Bitcoin is steady at $113,000—high by historical standards, yet sentiment is oddly subdued.
- Fed Watch: The community's focus is on Jerome Powell’s Jackson Hole remarks and the probability of a rate cut, which fell from near certainty to about 79%.
- Psychology: “It’s not only just price going down that makes people capitulate, it’s price not moving anywhere that drives them absolutely nuts.” — Scott Melker [03:05]
Memorable Quote:
“I would have thought at $113,000, everybody’d be amped up… But it’s like Bitcoin’s going to zero and we’re at 113k.” — C.J. [02:42]
2. Does the Fed Still Matter? The Shift from Monetary to Fiscal Dominance
04:07–10:32
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Old Narrative: For decades, markets ran on the assumption that rate cuts meant more liquidity and asset price growth.
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New Reality:
- Iago's Thesis: Increasing government debt—and the associated interest payments—are now the main source of new capital, reducing the Fed’s power.
- Fiscal policy (government spending/debt) has overtaken monetary policy as the driver of asset prices.
- “When the Fed cuts, it may be net neutral... There’s just this slow, continuous grind of new capital... coming in to the market.” — Iago [06:55]
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C.J.’s Perspective:
- $7 trillion sits in money market funds; if/when rates fall, that money could flow explosively into assets like Bitcoin, real estate, and gold.
- “If you’re late to the show... you’re going to get less stocks, less Bitcoin, less real estate… the supply is not going to be able to expand fast enough.” — C.J. [09:31]
Notable Exchange:
“The worst thing that can happen to the Fed is that they cut rates and nothing happens. And that seems to be very, very likely. It would... be an admission of the fact that they have been muted.” — Iago [07:44]
3. Yield Curves, Market Mechanics, and Bitcoin’s Antifragility
10:32–14:34
- Disconnect: Lowering the federal funds rate doesn’t necessarily translate to lower mortgage rates or long-term yields.
- Potential Consequences: Could trigger housing market issues if mortgage rates climb while stated rates fall.
- Bitcoin as Collateral: New lending paradigms are being developed, using Bitcoin to cross-collateralize real estate and reduce risk for lenders.
Memorable Quotes:
“If the Fed states the federal funds rate down, that doesn’t mean the two year and ten year have to follow. And that highlights an even bigger problem that could cause even more disruption in the marketplace.” — C.J. [08:03]
“Bitcoin can smell that. And that’s why it doesn’t really matter. Bitcoin is doing what it was designed to do.” — C.J. [12:09]
4. Bitcoin-Backed Mortgages and Disrupting Home Lending
14:34–19:31
- Structure: Borrowers can pledge Bitcoin alongside real estate, reducing liquidation risk and potentially borrowing at rates as low as 3.5%—even below government rates.
- Lending Model: People's Reserve bypasses traditional yield curve manipulation, packages loans cross-collateralized with Bitcoin and real estate, and sells these "Bitcoin powered finance securities" to liquidity providers seeking systemic diversification.
- Vision: “I want a new free market yield curve of the Internet economy to be established.” — C.J. [18:43]
5. Bitcoin for Life: Avoiding The Opportunity Cost of Selling
19:31–21:40
- Hodler Dilemma: Many long-term holders find themselves “asset rich, cash poor” and don’t want to sell Bitcoin to fund home purchases or lifestyle upgrades.
- Personal Example: C.J. recounts buying his house with 100 Bitcoin (now worth ~$10 million at current prices), and how many have expressed regret at “buying shelter with generational wealth.”
- Changing Mindset: “Can I improve my lifestyle while still holding onto my bitcoin? This is a key question a lot of people are asking now.” — Iago [20:40]
6. The Rise of Bitcoin Balance Sheet Companies
21:40–25:52
- Trend: Surge in companies—up to 297—holding Bitcoin on their balance sheets, versus a small number solely focused on Bitcoin accumulation (“Bitcoin Treasury Companies”).
- New Model: People’s Reserve seeks to blend business revenue streams with Bitcoin on the balance sheet, aiming to eventually pay dividends to shareholders.
- Quote: “It’s our mission to be the first bitcoin treasury company that pays dividends...while maintaining the long term upside of Bitcoin on the balance sheet.” — C.J. [24:36]
7. Stablecoins Challenging Banks—Regulatory Shifts and Banking Disruption
25:52–33:02
- Policy Update: The Genius Act opens the door for yield-bearing stablecoins; banks are lobbying hard against it, fearing loss of deposits.
- Stablecoins as "Narrow Banks": Offer fully reserved digital dollars with yield, threatening the fractional reserve model.
- Compounding Yield: Stablecoins can generate yield on underlying Treasuries and add returns in DeFi markets.
- Paradigm Shift: “I always thought Bitcoin was going to take down fractional reserve banking. I think stablecoins are going to take down banks.” — C.J. [29:41]
- Hal Finney’s Vision: The march toward a “free banking era” is accelerating with Bitcoin and stablecoins at the center.
Notable Analogy:
“What the banks did here was the same level of stupid as IBM did with Microsoft DOS... Now that the law’s passed, they’re realizing ‘Oh fuck, we just shot ourselves in the foot, lost our business. Is it too late? Probably yes.’” — Iago [27:17]
Notable Quotes & Memorable Moments
- Bitcoin Market Irony: “It’s like bitcoin’s going to zero and we’re at 113k.” — C.J. [02:42]
- Fed Power Shift: “That was because [the Fed] were the primary spigot of money ... That is no longer the case.” — Iago [06:10]
- Lending Innovation: “Having the pristine collateral makes you the risk free borrower.” — C.J. [15:23]
- On Stablecoins: “Tether is one of the most profitable companies in the world with the least amount of employees. Their profit per employee is astronomical.” — C.J. [30:52]
- On the Future: “When you zoom out ... there’s just so much being built on bitcoin and it really is just so early.” — Scott Melker [32:40]
Important Timestamps by Segment
- Fed/Market Dynamics & Bitcoin Sentiment: 00:01–04:07
- Does the Fed Still Matter? 04:07–10:32
- Market Mechanics & Yield Curve Discussion: 10:32–14:34
- Bitcoin-Backed Lending and Mortgages: 14:34–19:31
- Lifestyle, Hodling, and Opportunity Costs: 19:31–21:40
- Bitcoin Balance Sheet Companies: 21:40–25:52
- Stablecoins Disrupting Banking: 25:52–33:02
Conclusion & Takeaways
- Macro shifts are redefining how markets move: The power of the Fed is waning amid relentless government debt expansion and associated fiscal stimulus.
- Bitcoin proves resilient and antifragile: Despite a muted market, participants see clear pathways for explosive growth—especially as traditional finance mechanisms stumble.
- Innovation on Bitcoin is accelerating: From real estate lending to corporate finances, new models like Bitcoin-backed mortgages and stablecoin banking options offer more control and fewer systemic risks.
- The old vs. the new: It’s clear that legacy financial institutions are losing ground to blockchain-based alternatives, with both Bitcoin and stablecoins leading the way.
- It’s still early: The prevailing sentiment—voiced by both host and guests—is that we’re in the initial innings of a giant financial transformation powered by Bitcoin.
For deeper insights, engaging explanations, and more hot takes from leading voices in the Bitcoin space, this episode is a must-listen for anyone curious about the intersection of monetary policy, crypto, and the future of finance.