← The Wolf Of All Streets
The Wolf Of All Streets
Bitcoin Ready To Explode As Trump Era Is Officially Coming
00:47:27
Bitcoin Ready To Explode As Trump Era Is Officially Coming
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- [00:01]
Scott Melker
Bitcoin dropped below $90,000 on Monday, only to be trading back above $100,000 48 hours later. Largely on some macroeconomic data around CPI, but also on anticipation of everything Trump that's coming in just four days when he gets inaugurated. There is so much to unpack today. Very lucky to have Matthew Siegel here, here with me from Van Eck to discuss everything. Macro, crypto, bitcoin, and of course, what's coming in 2025. Let's go.
- [00:37]
Matthew Siegel
Let's do.
- [00:53]
Scott Melker
What is up, everybody. I'm Scott Melker, also known as the Wolf of Allstreets. Before we get started, please subscribe to the channel and hit that like button. I'm going to bring on Matthew right now, the newly minted spokesperson for the entire crypto industry, the most famous person in crypto. I can't turn on my television or open my X feed without seeing you retweeted 97,000 times your face on the news, dude. You're like, you're the new Sailor. You're our guy.
- [01:19]
Matthew Siegel
I don't, I don't think you want to be the main character in crypto. That's what I heard. So it's some, you know, accident.
- [01:26]
Scott Melker
I mean, I guess it's fair to ask that. Are you worried about Sailor's main character ness? Do you think that could go wrong for him?
- [01:33]
Matthew Siegel
Yeah, yeah, I am. Yeah.
- [01:35]
Scott Melker
I think a lot of people are, as they look at it, but I think we have a new main character, right? So we can play. We can, we can go for best supporting actor.
- [01:43]
Matthew Siegel
Trump is the main character, bro.
- [01:45]
Scott Melker
Yeah, it's Trump. And holy shit, man. Sorry to use the S word, but this one, this one I'm about to bring up. This rocked me. This rocked me. Trump receptive to include US Based coins in America first crypto reserve from the New York Post. So we all know about the strategic bitcoin reserve. We all know that Lummis has said it's going to get crazy. She's going to be working on this in a matter of days. Bitcoin, bitcoin, bitcoin. Trump spoke at the bitcoin conference, which last I checked, is bitcoin. Only about a billion bitcoin reserve. Can you imagine the smell in the crypto community if it becomes a crypto reserve for America first assets like XRP and Solana. What? Come on, man, let's go.
- [02:30]
Matthew Siegel
Yeah, I can smell the XRP at $3. That's what it. That's what it smells like. Look, when, when we present the investment case for Digital assets to clients. We put bitcoin in its own category and the position size that we have owning 10% of our own ETF, it's just the scale is beyond what it is for any single altcoin. So I think the devil's in the details here. But if he's going to buy American crypto, why not Nvidia, why not startups, hey, why not subscribe to Vanec Ventures, our new seed stage venture fund, right? The possibilities are limitless. I think it may be one of these negotiating tactics to just widen the overton window on how friendly the administration can be. If you create jobs and create intellectual property in America, we'll have to see if it's a position size of 100th that of Bitcoin, then kind of what's the big deal. But if you start talking real numbers, yeah, it's surprising.
- [03:45]
Scott Melker
The big deal is that bitcoin maximalists are literally going to stroke out and have to somehow intellectually accept that their bitcoin only maxim is being violated by their God king.
- [04:01]
Matthew Siegel
Maxis get bloodied. That's what I say.
- [04:04]
Scott Melker
I mean the more cynical view of everything that you just said is more people to raise funds from. I mean, the more, you know, the more that he pushes the crypto industry itself, the more he woos people back to the United States, the more fundraising and hype he gets. And by the way, that I don't think that's a negative thing, that's politics. But it seems like it would make a hell of a lot of sense for him unless he alienates and loses the bitcoiners that we're supporting before, which I don't think would happen.
- [04:38]
Matthew Siegel
Yeah, I agree with your take.
- [04:40]
Scott Melker
Yeah, I think that that maybe is a cynical view, but I think it's accurate. I mean, we saw the idea floated, although I never heard it from his mouth, that they would even eliminate capital gains taxes on American based crypto projects and trades. I mean things like that are just so astoundingly like bullish and catalyst for this industry. It's hard to even fathom if these things happen. But this is, I mean it's just crazy to me. I want to. Here, let's go. Van. Right. Van files prospectus for On Chain Economy etf. You just mentioned this, obviously passively. I'll tell you the reason that he's not going to add Nvidia as a reserve asset though is because the AI industry is not going to throw him a bunch of extra money. But yeah, go ahead. Let's talk about the on chain economy etf.
- [05:26]
Matthew Siegel
Yeah, thanks for noticing that prospectus that we filed yesterday. It's a preliminary prospectus so, you know, things can change. But this strategy would be an actively managed ETF that would be our first in the space and it would invest in a combination of digital asset instruments. So These are crypto ETPs like Bitcoin and ETH and hopefully more and then what we're calling digital transformation companies. So these would be equities of firms that are operating in blockchain infrastructure, digital payments, owning Bitcoin or other crypto. And yeah, like we think we've, we have a passive fund in this space.
- [06:17]
Scott Melker
Dapp.
- [06:18]
Matthew Siegel
Dapp. And given, you know, the size of the team and some of our success in some of the private liquid token funds, we're going to give a shot at creating some alpha here and running an active fund in the space.
- [06:34]
Scott Melker
Okay, so this gives us the opportunity to dig into the brain of Vaneck and see what you guys think is proper allocations across the board in the crypto space because you're going to be actively managing and we'll see how much of everything you put in. But are we talking about how far down the curve of Bitcoin and crypto adoption do we go? Is it, you know, PayPal in there because they have a stablecoin, or is this primarily miners and microstrategy sort of structurally what we've seen before? And is it leaving room, I guess, for Solana and XRP ETFs and all those that come down the road?
- [07:07]
Matthew Siegel
We're taking a pretty wide view here. It's companies that either are active themselves in digital assets or those that sell into the digital asset ecosystem. So that can include energy companies, you know, if they are specifically selling to miners, it can include data center companies that are kind of running hybrid strategies, certainly exchanges, Miners, Hodlers. So it does not have to be a pure play to be owned in this strategy, but there has to be meaningful business and the prospects for growing in the space, I think this would be, I mean it's going to be volatile. So it's not like a core S and P replacement type holding. This is for folks who want exposure to the long tail of equities in the space. And just speaking from a macro perspective or bigger picture, there's going to be market cap growth in this space this year, if only from upliftings. We had Exodus already move from Canada onto the big board. There's probably going to be other names like that Coin check just went public. That's a Japanese owned exchange operating in the U.S. you know, circles on the horizon. So I think there's going to be, you know, bigger hunting ground here and you know, some people will want exposure to that.
- [08:50]
Scott Melker
Well, it's novel because it actually keeps the door open to adding things in the future that have not yet even adopted a bitcoin or a crypto strategy, which I think most ETFs don't have. Right. Because I think we know that in 2025 a lot is coming. I think we're going to get nation state adoption according to Fidelity multiple nation states, this will be the year sovereign wealth. But then of course, just this corporate adoption following MicroStrategy or miners or any of these others that we've seen. I mean, Hunter from Bitwise tweeted this. I don't know if you saw this, but we just provided some information for a nation state asking about Bitcoin ETFs considering moving some exposure from foreign currency government bonds into bitcoin. Bitcoin is entering a new chapter. I mean, that doesn't mean it's happening. But these conversations, we see them anecdotally every single day. Right? I mean, how do you even handicap the tailwinds that we have right now? I want to have some bearish case. I want to not feel like the new paradigm Wall street cheat sheet euphoria guy. But when you look at the news, everything aligned so perfectly. Trump's return to Washington kicks off flurry of crypto related activities. IRS challenges focus on crypto debanking. I mean, we're getting an end operation choke point 2.0 and clarity on that. Probably we're getting a wholesale change at the sec. Probably going to see the coinbase and cracking actions disappear. Right. I mean, what's stopping this?
- [10:19]
Matthew Siegel
Yeah, I agree with you. I don't want to get too cute. I guess if there's one thing to be aware of, and I posted this on Twitter last night, the chart of the odds of a strategic bitcoin reserve and the bitcoin price are moving, you know, in tandem and each spike in bitcoin has, has been connected to a spike in, in those odds. So, you know, and speaking to other like managers in the space, there's definitely a feeling it's a, it's a binary situation that if a reserve is announced, bitcoin goes up, if not bitcoin goes down. So I guess, I guess that's the, the cautious argument. But you know, I agree with you that this is the year when everything is kind of lining up. There's just going to be so many headlines once the new administration takes office around the repeal of negative rules like SAB121 enforcement resolutions, more support for deregulated energy markets, like all of the things that turbocharged adoption. Yeah, thanks. You got the chart right there. So when I saw last Friday, the altcoin drawdown reached 35%. That is the largest altcoin correction post an election in the last three cycles. So 35.
- [12:02]
Scott Melker
Sorry, was 35%, like, on average across the board?
- [12:05]
Matthew Siegel
Yes.
- [12:05]
Scott Melker
Some went down 50. Some went down 50. Okay. Exactly. Yeah.
- [12:08]
Matthew Siegel
We've got an index of alts that was down 35, 35%. And we're using the same methodology to Track performance in 2020, 2016. This drawdown was larger than any of those, and it corresponded with, you know, funding rates going negative briefly. But that usually indicates that there's been deleveraging and some of the more speculative money's been washed out. Funding rates are still like, you know, right around where they were at the election. So a lot of the optimism kind of came out from the short term. And I think that sets us up to move higher when these positive headlines start to hit in the new administration, with the caution being that the SBR is kind of a delaying option. The longer that that doesn't happen, the more that people might latch onto that as a negative.
- [13:01]
Scott Melker
Yeah, so you got your bottom signals, basically, you know, like, we had a larger drawdown than anticipated. Open interest, crashed, funding rates go negative. People are too bearish. Obvious counter trade. I mean, on Monday during the show, I literally bought Bitcoin and Solana while we were on macro Monday, because it was during this show that it dropped below 90 and, you know, and Solana was hitting support. If you're looking at a chart on the 200 MA, it just seemed like a gratuitous buying opportunity. People were just way too bearish for what's coming, you know, and. But now, so my bearish case, I can't even call it a bearish case. I think it would be short term. But it echoes what you said, and I keep saying it, it's. That we're. I do feel like we're priced to perfection because we've gotten all of his appointments and news and expectations of what will happen. So we are set up to have disappointments if crypto is not an immediate priority. Like it kind of along the lines.
- [13:54]
Matthew Siegel
Of you saying, I think, like, when you're. For those who are watching the tape and the algos that are kind of trading, you Know the, the red stickies on Bloomberg, the headlines, are they positive or negative for crypto? I think that the ratio of positive to negative is just going to be much better once the administration takes hold. So it's hard. Of course those could be sell the news type events but when you add up how many are going to happen I think and as long as the market stays reasonably stable, I have a hard time making a bull a bear call.
- [14:31]
Scott Melker
Yeah, I think to clarify if you know we've seen reports that we get Multiple Executive Action SAB121 as you alluded to the first day, you know, or if the first hundred days we don't even see the strategic bitcoin reserve brought up because they're arguing about immigration or another, you know, or the war in Ukraine or something like that. Basically just if we don't get the enthusiasm from the administration immediately. But to your point, I think, I mean you can just see that there's so many headlines they're not gonna just wholesale ignore crypto. There will. I think these executive orders are already sitting there.
- [15:08]
Matthew Siegel
Yeah. Oh the other thing I should have mentioned that I think contributed to the sell off to below 90 and is a whole lot of unlocks this week there's like 3 billion worth of alts unlocks. Most of that is ondo but some reasonably well held tokens also unlocking this week and I think that was made the markets a bit jittery. You know we've seen from the past that those tend to be like by the news events people position ahead of that. So that's why in the short term also we got a bit more confidence.
- [15:48]
Scott Melker
Yeah, and those unlocks are going to keep coming though, right? I 100% agree with you. But at this point there's so many tokens either from last cycle that are you know, now vesting two or three years later to VCs or that have been waiting for the right conditions to launch. Right where you're going to get the first 10 or 15% unlocked, that that's going to be a persistent issue.
- [16:09]
Matthew Siegel
Yeah, for sure. Last year's vintage of kind of high market cap, low float tokens, we've talked about this many times that we really managed our position sizes around those because yes, when, when, when the market's going up they're illiquid and they can move a lot. But on the down days the drawdowns are just that much when you're dealing with the high inflation of those types of tokens. But still this week was particularly large in terms of size of those unlocks.
- [16:38]
Scott Melker
You definitely get that mentality in either a bull or bear market. If 20% of your tokens as a long term investor unlocking you say I still got 60% more. I'm just selling these. No question. It's an automatic sell, especially if you're representing investors or have some fiduciary duty. So generally these do get sold off is basically what I'm saying. Yeah, that makes sense. So listen, we've talked about obviously the bitcoin strategic reserve. I think what you said makes sense in the shorter term, but I think that would get absorbed even if we don't get the strategic reserve immediately. And I don't think it stops the bull run like you know, China ban in 2021. Right. Or what are the ones that we've seen in the past. But we also have this state level sort of battle now for strategic reserves. Oklahoma introduces bill to establish bitcoin as strategic reserve asset. Last Friday on Spaces, Dennis Porter on crypto town hall announced that New Hampshire had launched basically the same initiative. I think we're up to six or seven states now. And we have got Texas, he's out here saying we got to do this first. I saw guys in Florida meeting with legislators. How important are state level strategic reserves? I mean Texas is the seventh, I think largest comedy in the world. It's bigger than Canada. You know, so we talk about Canada getting reserve, but Texas actually would be a bigger deal theoretically as far as just sheer asset size.
- [18:05]
Matthew Siegel
Yeah, I love the way that Texas is going about it where they're not proposing to put any taxpayer money to work. They're just saying, hey, we'll accept taxes and other payments to the state in bitcoin and then we won't sell it for five years. That seems a good compromise because I do think that putting taxpayer money to work in the open market and buying bitcoin raises a lot of political questions around who benefits and who doesn't. Right?
- [18:34]
Scott Melker
You mean we shouldn't print money to buy bitcoin?
- [18:38]
Matthew Siegel
Well, you know, Bill Ackman has this idea to like give every kid born in the US $7,000 a stock and kind of like eliminate Social Security, but just set these kids up with stake in US capitalism from the day they're born. I would say, well, why not give them like $700 of Bitcoin as well and then you can solve that political problem. But you know, on the topic of the state legislation, I know there's been a lot of, you know, I'll hate to put it mildly on X around what Dennis is doing. But I've attended one of these conferences with Dennis that attracted elected officials at the state level, treasurers and auditors and you he gets in the room with the right people. And it takes a different type of talking to deal with these lawmakers who are focused on the election cycle and you know, their own political prospects. So like I love, I love this state level approach and I think that our call is that at least one will be passed this year.
- [19:46]
Scott Melker
One would be good. I think it only takes one. Although the second one is where the adoption happens, which we've seen with corporations as well. Like there's never been a second microstrategy. There hasn't been a second El Salvador yet. Right. The first is not the catalyst. It's when it becomes a crowd in my opinion that, you know, everybody feels forced to do it. The exception being if the United States central bank or fed does it. Because if we get an sbir, everybody's going to have to.
- [20:10]
Matthew Siegel
Were you saying there, there isn't a second microstrategy or there is.
- [20:14]
Scott Melker
I'm saying there's yet to be a second. Michael Saylor there's plenty of companies adding it to the balance sheet but I don't think we're, you know, I don't know that we ever get another person who's, you know, that religious about the buying and, and what he's doing.
- [20:26]
Matthew Siegel
But yeah, fair enough, fair enough. And on El Salvador, you know, they do stand alone on the legal tender front. But there's seven countries that are mining bitcoin using government reserves.
- [20:36]
Scott Melker
Why does anybody talk about that?
- [20:37]
Matthew Siegel
Nobody talks about every time. Three of them were last year. And all three, Argentina, Ethiopia, Kenya, all have deals with the imf. So you can really start to see a pattern here that when a country is over indebted and has to restructure their IMF loan and the IMF comes in and tells them like hey, you will roll over your debt but you need to raise taxes, do this, do that. That becomes a political hot potato in that country. Who's ever the opposition. It's a great opportunity to say, hey, why are you selling out our country to these unelected bureaucra? And bitcoin becomes a third way to restore some sovereignty. So I think there's going to be definitely more countries that declare that they are mining bitcoin. Actually Russia I would add to that list. They pretty much admitted it this year. They've been. Bhutan's already on the list. Yeah, they were first 35% of GDP is their Bitcoin stack.
- [21:38]
Scott Melker
They're small, but that's a pretty absurd number to see that it's done. By the way, the IMF doesn't give loans guys. They give indentured servitude people contracts. But if you think banks and credit cards are predatory, you should take a look at what the IMF's pulled off since the 1960s and 1970s around the world in cahoots with the CIA and American corporations. But we don't need to go too far down that rabbit hole. I agree with what you said about Dennis, by the way. The guy is out there doing the work. Right. And I think people just, in this industry have a big problem with conflating the messenger with the message. And they like, they literally, if they don't like somebody, it literally doesn't matter how much work they're doing. It dampens sort of the enthusiasm around all of it.
- [22:23]
Matthew Siegel
But one state to our point on main characters, right, you want to avoid that.
- [22:28]
Scott Melker
Yeah, you definitely want to avoid being the main character. I do want to talk about MicroStrategy. We kind of alluded to it at the beginning. Like if we're talking about black swans, I don't think this is even possible. I don't, I don't know the math. But like if somehow Sailor blew up, you know, that could be the thing that sort of puts a damper on the industry. This article saying MicroStrategy's preferred MSTR issuance seeks returns and volatility at 1.5x Bitcoin. Sailor says, is that really what people who are buying these notes are looking for? I mean, is that the pitch?
- [22:58]
Matthew Siegel
Well, I think take a step back. They have very successfully innovated in the convertible bond market. And now MicroStrategy plus the Bitcoin miners are up to like 6 or 7% of the convertible bond index. So it's become a meaningful part of that market. You wonder how much bigger they can get in that asset class. And so innovating in another asset class, specifically these preferred securities that attract a different type of buyer generally longer term sticky money is, I think it's a smart approach. It's a big market, multi, multi hundred billion dollar market. And I think they're going to find a buyer, buyers for this paper. But that's a function of the fact that the convertible market is probably getting a bit tapped out. And the math is such microstrategy has become so big that in to increase the amount of bitcoin per share, which is really the metric that matters for the valuation of that share. They need to buy more Bitcoin and then it gets even more. It's not a linear relationship.
- [24:18]
Scott Melker
Yeah. People view it as an infinite money glitch, but you're offering the very obvious opposite side of that, which is that it becomes increasingly more difficult as the price goes up basically to keep the percentages afloat.
- [24:33]
Matthew Siegel
Exactly. And more dilution. So I think it's important to prove that there are buyers for these preferreds. I think there will be. So I don't think it's going to crash. But yeah, MicroStrategy is the bigger things get, the harder it is for them to grow.
- [24:48]
Scott Melker
I was having an interesting conversation now it was on YouTube, I can't remember who it was with, but basically that we kind of came to the conclusion that MicroStrategy stock was sort of the pre ETF way to get exposure on the market. And by creating these convertible notes or fixed debt, this kind of instrument, he basically opened Bitcoin now to insurance companies and a whole other huge wall of money that couldn't even buy MicroStrategy stock really to get exposure to Bitcoin. So as much as we talk about the performance of it or whatever, I think he really just tapped a market that even if it's a small percentage of it, wanted exposure to Bitcoin, still couldn't even with ETFs and microstrategy or individual equities. And now by giving them the convertible note, it's just like another way for another sort of swath of investors to get access they couldn't.
- [25:43]
Matthew Siegel
Exactly, yeah. Selling volatility is how he describes it.
- [25:48]
Scott Melker
I mean, it's absolutely brilliant. What's the end game? Be a bank, Be a Bitcoin bank. Bitcoin financial services.
- [25:53]
Matthew Siegel
I mean, you know, I noticed that Coinbase today just reinstituted their Bitcoin lending program. So even US holders of Bitcoin on the Coinbase platform can now borrow against it through a partnership with Morpho. So this is a. I think it's a non custodial solution. You know, we know how that ended last time, with most of the centralized balance sheets, BlockFi, Celsius, Alameda, FTX, etc. Going bankrupt. But in order to get Bitcoin to where we think the price target, where we think it's going to go long term, which is on par with gold, there does need to be a market for leverage and that's part of financial services. I think I literally alluded to at some point microstrategy is going to look to. I mean they already are monetizing it. Right. By using it as collateral for these fixed income securities.
- [26:56]
Scott Melker
Yeah, I had this conversation this morning with Bill Barheit from Opera. Just casually I text him. It's probably, I probably text him at like 5:30 in the morning, his time, because I'm an asshole. But I was like, hey, now that you guys are kind of restructured or whatever, what does bitcoin lending look like right now? Say Bitcoin is 100 grand and you got 10 Bitcoin that you want to take a loan against. What's the ltv? What's your liquidation price, et cetera, et cetera. And went through this whole thing and I had no idea that Coinbase was doing that. But right now, this is the reason I think this is going to be so big is because nobody in their right mind wants a mortgage if you can even get one. People in crypto generally like have some sort of like tax efficient structure of trusts and such that they can't get a mortgage anyways because they're not showing the personal income necessary on there. So I literally called him, I said, hey, if. Not that I am, but if I wanted to buy a house, what does this look like versus a mortgage? And it's actually pretty much it's more attractive. It's like an eight. What is it?
- [27:53]
Matthew Siegel
Mortgage rates just hit 7% yesterday.
- [27:55]
Scott Melker
7.13 or something two days ago. Right. On a 30 year mortgage. So like if you. I guess the question is, are we at the point where like you can safely do it and not worry about the counterparty risk? Coinbase seems like that's making that more realistic. Like I wonder if your loan is insured.
- [28:13]
Matthew Siegel
Yeah, I haven't dug into. I just saw the, saw the headlines and saw it's a partnership with Morpho, which defi platform. So I think, you know, the coinbase liability will be, will be lower, but need to read the docs on that.
- [28:26]
Scott Melker
Damn it, Matt, I forgot one of our main topics, so I got to keep you for a couple more minutes. I'm sorry.
- [28:31]
Matthew Siegel
That's all right.
- [28:32]
Scott Melker
Prediction. Moody's downgrade post January 20th. I mean this is huge prediction. Right. So Moody's threatens US sovereign rating again ahead of election debt dynamics will be increasingly unsustainable and inconsistent with AAA rating. Okay. This could be problematic for markets.
- [28:46]
Matthew Siegel
Yeah, we are. Jan Vanek CEO here has been really worried about the fiscal situation and when you read what Moody's and S and P are saying about it and this is not just the US but for all the countries that they cover the sovereign debt. When the interest payments as a percentage of tax revenues surpasses 20%, then the light starts flashing red. And the US just passed that this year. So I think they've been telegraphing that this is going to happen. I also think that Moody's is a little bit political and they may have been holding this in the back pocket for when Trump takes office because it's, you know, more convenient. And this will be one of the headlines in the first couple months, I think is going to be one of these downgrades.
- [29:41]
Scott Melker
What does that mean for bitcoin? Right. Since we're at a bitcoin show, I mean, do all market. I'm assuming this is because of our endless debt ceiling debates and the kind of nonsense that Moody sees. Every time we get into the political process of trying to figure out what this looks like, we probably should be down.
- [29:57]
Matthew Siegel
Yeah. I mean, it's a reflection of this concept of fiscal dominance. And fiscal dominance is when your debt is so high and your interest payments are so high that monetary policy becomes ineffective. If you have inflation and you raise rates, you just increase the size of that interest burden and it causes a very uncomfortable cycle. I think that is becoming consensus in some parts of the market. It's certainly part of the reason why China and many of the BRICs have slowed down their pace of treasury purchases, have pivoted more to gold. I think that's part of the reason that we're bullish on bitcoin and you're bullish on bitcoin is that it's an alternative for some of the countries that historically have just stuck with US Debt. Kind of depends on what markets have done in the lead up to a headline around a debt downgrade. My guess would be like short term negative for all risk assets, but that bitcoin would act perhaps a little bit better. Similar to what we saw when Silicon Valley bank failed.
- [31:03]
Scott Melker
Yeah, that was like the best unintentional trade of my life. Or one of them was when usdc, when Silicon Valley bank news hit and there was FUD around usdc, I sold my USDC into Bitcoin immediately, just in case, thinking bitcoin would probably drop on the news. And bitcoin went from like 19.
- [31:22]
Matthew Siegel
Yeah, Scott, you should come work for us. That's exactly what we did. It was on a weekend we bought eth. But yeah, and it was like, hey, if, you know, there's 6% upside on USDC and a lot more than that. On ETH.
- [31:32]
Scott Melker
So, yeah, we jumped 19 from 19 to 25, like basically overnight on bitcoin and still holding it. So thank God I got myself out of those dirty, stinky US dollars. So listen, I have one question from the audience before I let you go.
- [31:46]
Matthew Siegel
Okay.
- [31:47]
Scott Melker
Scott asked if when Vaneck will add 1 to 2% of crypto at all or some of its mutual funds ETFs. It's a great question.
- [31:53]
Matthew Siegel
Yep, it is. If there's, I'd say if there's one thing I was disappointed by most last year, it was in regards to these Bitcoin ETFs. The wirehouses, the big bank owned brokerages, Morgan Stanley's, Merrill Lynch's, UBSS. They've all been somewhat slower to adopt the Bitcoin ETFs than I would have thought. Their strategists have not really put out the new wrinkles on the 6040 model that would include an explicit weighting to Bitcoin. And so their financial advisors don't really have the COVID to go out and be like, hey, instead of 60 40, do 6039 1. So in the face of that disappointment, we've really turned up the dial on these model portfolios that can be sold directly to allocators. And we have some very diversified funds that now own somewhere between 1 and 5% in Bitcoin. And that's one of the fastest growing parts of our business. Jan has recently hired several more people to help kind of populate those models. We think it's a great chance for us to gain market share against the legacy guys who have these innovators dilemma. And yeah, we're not, we're not going to add it to all of the mutual funds and ETFs. But if you look at some of our real asset and inflation protection ETFs, you'll find Bitcoin weights in there and they're being managed tactically. We're looking at the volatility as a way to size the position. And you'll see more of that this year.
- [33:25]
Scott Melker
Awesome. Matthew, thank you so much for your time. I know we ran a little bit over. I love what you do and you put things into a perfect perspective and actually have data. It's a nice thing instead of just some wild opinions. But I think personally it's going to be a great year. It's funny somebody here said that I think said the election is a buy the rumor, sell the news. I thought that, but I think we just did that. I think that was Monday, a week ahead of the election. So I don't think that guy's wrong, but I think that's what happened. Guys, you can give Matthew a follow on X. Please do is great. It's Matthew Underscore Siegel S I G E L as you can see it right there. And Matt, look forward to speaking soon and hopefully seeing you soon.
- [34:08]
Matthew Siegel
Catch you later, Scott. Thanks for having me.
- [34:10]
Scott Melker
Thanks man. Have a good one. All right everybody, we are going to go ahead and move on to the next part of the show. I didn't think Dan was going to be here. You had connectivity issues.
- [34:21]
Dan
Yeah. Shaky Internet yesterday, but looks good to go today.
- [34:25]
Scott Melker
He's here and that's all that matters. So listen, we've what. What a time to be alive since we spoke last.
- [34:31]
Dan
Yeah.
- [34:32]
Scott Melker
Alluded to it at the beginning but we did. The bitcoin goes to sub 90 on Monday and it's trading at 100 two days later.
- [34:41]
Dan
Yeah, it's that continued lack of acceptance under that ninety two thousand dollar level. And anytime you keep breaking a level with no follow through, you start to scout a wedge. So this is a potential daily falling wedge on bitcoin that I'm keeping an eye on. And oftentimes wedges turn into head and shoulders or inverse head and shoulders. And so you know, if we reject here and pull back, the best case for the bulls would be to confirm the daily uptrend to break that resistance level. But essentially we, we got to have that trend change because what we did last time is again that V shape. But if you're not establishing many supports on the way up, it's easy to retrace a lot of that move as we saw. And so again you just want that healthy daily higher low. Give us a new base so we can move on from this 92 to $90,000 level and have a new level. That's the goal for the bulls here. And again, overall there are no red flags. Weekly EMA 12 keeps holding. This is, this is an attempt to be a bull flag as the dip keeps being bought.
- [35:42]
Scott Melker
I mean does this we have to see all the day closes. But does the rejection, so to speak here at 100 concern you all? I mean I kind of have it at 99,860 is the level I had, you know, from that high. Obviously tested it quite a few times. But you know, if we close back below, you know, 199, 860, any of that, is it even on your radar or is it not a big deal yet?
- [36:05]
Dan
I mean we're still paying attention to that Resistance. But again, even if we, you know, straight up just ran and broke it, it wouldn't be enough for me just because I need this daily trend change to confirm. We need to pull back, get that higher low, and then follow through. And again, just comparing to Nasdaq, the Nasdaq's doing the exact same thing on the daily chart with its attempt at a falling wedge. And again, it's still potentially forming a daily lower high here. So no red flags. Just ensure that if we do start retracing more significantly, you don't want to give back more than half of that move, ideally, which is the $95,000 level. So in an ideal world, pull back, find a, a daily higher low, 96 or better, ideally 95 or better, and then confirm that trend change to get over where we just topped out 101 essentially in that previous top 103. That would be smooth sailing, ideal scenario.
- [37:01]
Scott Melker
Got it. Perfect. So then, what does that look like for you in context of everything else happening? I mean, I think we have a potentially volatile period coming.
- [37:09]
Dan
Definitely. The dominance chart weekly is just tightening up nicely. And in an ideal world, what I would love to see just in terms of previous patterns and how it has played out in the past, is if bitcoin confirms this bull flag here and obviously all eyes are on Monday. Is it a seller news, the news event into Trump and what's going on there? The harder we run, the more likely to be to sell the news. So for example, I mean, today's Thursday, Friday, Saturday, Sunday. If we just go straight up for three days from here, then it's more likely to be a sell the news. If we establish a daily higher low, then it's less likely. But just be aware, if Trump doesn't give us something on day one that satisfies the mob, then we can see short term weakness in response to that. But back to my statement, in an ideal world, I want a bitcoin bull flag 100 to 10,000 plus and then the dominance chart to collapse, breaking bearish from this pattern, showing us altcoins getting a big time leg up. And that would be the healthiest crypto environment in my opinion, if it were to play out like that.
- [38:18]
Scott Melker
I agree, it was interesting because obviously we all talk about the bitcoin pump yesterday on the cpi, right, which is just kind of hilarious. But altcoins did actually outpace bitcoin on that move yesterday. So bitcoin dominance was dropping while bitcoin was going up. So that does sort of show this slight appetite for risk alongside Stocks that maybe leaks into the altcoin market a little more in a move like that.
- [38:43]
Dan
Yeah, it's, it's, you know, the, the Trump play in the sense that XRP and, and all these coins that are hoping to benefit from Trump, they're definitely a large part that the dominance is dropping here in the short term. And, you know, XRP just perfection on that weekly bull flag as well. And the good news is, you know, bitcoin's weekly chart looks more like XRP than it does a ton of the other altcoins. And it's just that retracement, you know, that retracement was maybe 40% into the continuation bull flag. A ton of altcoins retraced 50 to 60%. They have a much different setup. But again, bitcoin at this point on its weekly chart, you know, from the last leg up that we saw, its retracement is a bit more comparable. It's. It's still at that 382, you know, 40 roughly area. And so that is a bull flag until proven otherwise, which is a comfortable spot to be in as a bull.
- [39:38]
Scott Melker
Yeah. So what are you looking at in the stock market now then?
- [39:41]
Dan
Keep it. I mean, coins. A potential daily falling wedge as well. We have MSTR tightening up. MSTR had a little relative strength in the sense that, you know, bitcoin and the NASDAQ both dropped to a lower low here and MSTR did not. But I just love these tightening ranges. You know, here's a new daily lower high being set, and now we're going to look for a higher low compared to 303. And this tightening range will break at some point next week. But I love these equilibriums that tighten up just in terms of, you know, the ability to position. And again, at this point, we're watching for daily higher lows to be the result of any pullbacks from this level. And again, we just gotta break both. Just have to ensure that the tightening range breaks bull if we're going to try and head back up to the next resistance zone. But again, it's, you know, just give me that daily uptrend. That's what it all boils down to on bitcoin. I don't care if you pull back here, just give me a healthy daily higher low. Don't retrace 60, 70%, because if we do, then we're going, you know, we're going right back to that 90, 000 level again. We got to establish new supports in addition to this 90, 000 level.
- [40:47]
Scott Melker
Yeah, I mean we don't want to go there again. Not after that. Like we got the reaction we wanted. Right. That dip below 90, huge buying, you know, tons of standing orders, that crazy daily candle. But that liquidity is gone now. Yeah, this is a 1289 is not going to have the same reaction again. You know, if it goes down there.
- [41:06]
Dan
Yeah, I want to see a 12 hour higher low and just, you know, prevent too significant of a retracement. You want to see hourly oversold, if we get there get bought significantly. Let's see, if we were to hit to hourly oversold would be roughly around the 96s. So yeah, you wouldn't want to dip more than hourly oversold. So if we were to head to hourly oversold, that needs to mark a 12 hour or daily higher low. In an ideal world if the bulls are going to remain confident.
- [41:34]
Scott Melker
I mean, I guess the stock market just opened because the bitcoin chart obviously. Yeah, good times, good times. I know that. I do believe bitcoin is an uncorrelated asset, but indisputable that the actual bulk of the quick price action happens at the market. Opens, closes.
- [41:51]
Dan
Yeah, again, as I mentioned last time, it's such a difference. The correlation between 9:30am to 4:00pm is completely different than everything else. And so you have to view it in two. Two things. One more thing I want to point out. This was the, the quantum stock that I talked about last week. This is just an example of why I love to play bounces and have a bully. And obviously markets go up over time. That's one reason to have a bull lean. But just mathematically speaking, this short, massive, massive drop 75 dump over the span of four days. This bounce in two days exceeded that gain significant or that, you know, maximum amount you can gain as a bear. This little dinky bounce in comparison has more of a gain. And that's why, you know, oversold bounces are one of my edges as a trader. Just because of, you know, when things get extreme, even just the smallest little bounce is very worthwhile. So just real quick on, on these quantum names. Next thing I'm looking for is a four hour higher low. But again, just the volatility in these things. You know, yesterday traded $4 billion. So the volume, the liquidity and the volatility is a day trader's dream.
- [42:59]
Scott Melker
I mean, yeah, if you're short, like if you're selling, if you're shorting something, you can only go to zero.
- [43:04]
Dan
Yeah, it's you know, the best short, the best non Leverage short in history is 100% gain. And obviously stocks and everything, they do that, you know, in a couple weeks in bull markets. So that's my, that's my pitch for playing bounces.
- [43:19]
Scott Melker
Yeah. And it's also, I, I, you know, unless you're a very, very, very experienced trader. That's why I hate the notion so much of like I'm gonna sell some to buy lower.
- [43:30]
Dan
Yeah, it's definitely, I mean these, these, this kind of volatility eats you alive. I mean it eats professionals alive that aren't on their discipline. So definitely need a lot of experience if you're going to be slanging in that kind of environment.
- [43:43]
Scott Melker
So what do you think happens with the inauguration? I'm not talking about up, down, whatever, but like you think it's going to just be extreme volatility and do you think it's going to last?
- [43:50]
Dan
I think it's going to be volatility. I think, you know, it's, it's honest, Honestly, I don't know. And that's one, one thing that, you know, professionals and admitted it's fine. Admit it. It's, it's so often my answer and that is okay, the, the key is, you know, I'll be even positioning myself in a trade and won't know. But the key is, you know, position sell a little bit, get your break even, put your stop loss and then your, I don't know, can play out and sometimes it'll give you a big win. Then sometimes, ideally it's just a small loss and, and again it's, it's just so often that's the answer and I do not know. You know, again, it's a weak, it's a bull flag on Bitcoin. And so the burden is on bears to prove to me that it's not a bull flag. So I default bullish. And XRP hitting higher highs is definitely helping things. So staying bullish. But again, as far as you know, I don't really care about the next three days, what's going to happen. It'll be entertaining. The stock market's closed on Monday, so crypto will be doing its own thing to a certain degree, but I don't know the short term reaction.
- [44:54]
Scott Melker
We get an inauguration without the market open by crypto telling us exactly what to look for. It's going to be wild. I have to say. Xrp, I don't ever view things as missed opportunities because it's like, it's like a bear shitting in the woods. I have no idea if it's happening or yeah, like, but XRP is pretty crazy, I have to say because I had the alarm set. I even shared it like in my newsletter and stuff on the breakout. I just didn't buy it. Yeah, that's tricky. It was right there. I talked, I did it like we talked about it on the show and I was like, hey man, this thing is really breaking out over like the longest resistance ever. Multiple touches consolidated. Then you got, I mean it was, all the signs were there except for the like, why would xrp go up 7x sign.
- [45:41]
Dan
Yeah. And even it's, it's showing us the bull characteristics where again, you know, first 15 minute oversold on that pop marked a four hour higher low into continuation. And it's just an ideal setup. But again, it's the kind of thing where, you know, we watch so many things that there's getting, there's tons of missed opportunities. And the beautiful thing about markets is as long as those numbers keep, keep flashing away, there will always be another opportunity.
- [46:05]
Scott Melker
Yeah, especially once Trump starts to make meme coins. Strategic reserve assets. Anyways, we got chart, guys. Guys, give him a follow. Of course, as always, I, I looks, I brought Matt up so now I'm going to bring yours up so they can actually see it. You know, I want them to see it so they can do it. Look, this is how you follow them right here. See Chart gats guys. See it? Thanks. Go do it. I want to see the, I don't even see the number going up. It's weird, it's awkward because it should be going up in real time. Give him a follow. Check out his YouTube. Great educational content and like it just always seemed like the happiest guy and really even. And it's just nice to not have someone on here screaming at the chart.
- [46:46]
Dan
You know, I try my best. It's, it's required if you're a professional trader. For sure.
- [46:52]
Scott Melker
It absolutely is. Well, man, thank you for everything you do. Thank you for coming on and hopefully see you next week.
- [46:57]
Dan
Thanks, Scott. I look forward to it.
- [46:59]
Scott Melker
Yeah, guys, I'll be on spaces, of course, 10:15am Eastern Standard Time in about 25 minutes. And back tomorrow with the Friday Five with Nathaniel Whittemore. NLW. All right, guys, thank you. Bye.
- [47:24]
Matthew Siegel
Let's dope.