Podcast Title: The Wolf Of All Streets
Host/Author: Scott Melker
Episode: Bitcoin Sell-Off SHOCKS Markets. Here's Why Investors Are Flocking To Gold! | Macro Monday
Release Date: March 17, 2025

Introduction

In this episode of The Wolf Of All Streets, host Scott Melker is temporarily filled in by Noel Atchison, the author of the Crypto Macro Now newsletter. Noel joins regular panelists Dave Weisberger, Mike McGlone, and James Lavish to delve into the recent tumultuous events in the financial markets, particularly focusing on the significant Bitcoin sell-off and the subsequent surge in gold investments. The discussion navigates through macroeconomic indicators, central bank policies, cryptocurrency dynamics, and global liquidity trends.

Market Overview and Macroeconomic Concerns

Mike McGlone initiates the conversation by expressing concerns stemming from a recent Bloomberg morning meeting with top economists Anna Wong and Gina Martin Adams. Both economists maintain a bearish outlook on the equity markets, emphasizing that their perspectives are not swayed by senior management influences typical of sell-side analysts.

• Key Quote:
  Anna Wong: "The FOMC is coming up market. The market's not ready for a hawkish FOMC."

Mike highlights a 10% correction in the S&P 500 and a 25% drawdown in Bitcoin, noting Bitcoin's relative stability compared to the S&P 500 due to its lower volatility.

Bitcoin's Decline and Gold's Ascent

The panel delves into the implications of Bitcoin's 30% drop from its all-time high and the corresponding rise in gold prices. Mike McGlone draws parallels to historical economic events, suggesting that Bitcoin often lags behind money supply changes by two to three months, indicating that current macroeconomic factors are influencing its decline.

• Key Quote:
  Dave Weisberger: "If you get a normal, we get another 10% correction in the stock market. Now that's very serious. That gets Bitcoin to 50, we get another 10% and gets it too close to 20, it's not a big deal."

Mike argues that Bitcoin serves as a leading indicator for market volatility and that its decline signals broader economic challenges, including potential further corrections in the stock market.

Liquidity Dynamics and Central Bank Policies

A significant portion of the discussion centers around the global liquidity landscape. Dave Weisberger emphasizes that government deficits worldwide are creating structural liquidity issues that cannot be easily remedied. He critiques current fiscal policies, particularly the reliance on deficit spending and the inefficacy of cryptocurrencies like Dogecoin in addressing these deep-seated economic problems.

• Key Quote:
  Dave Weisberger: "The liquidity is coming from the deficits that all the governments are running... the entire system is based upon the notion that asset prices will go up over time."

Mike McGlone supports this by highlighting the absence of a traditional "Fed put" in the current economic climate, meaning that central banks are less likely to intervene to prop up markets during downturns.

• Key Quote:
  Mike McGlone: "It's just normal reversion. The key thing is now we have the potential that's going to happen. We have the means for it to happen."

Global Perspectives and Future Projections

The panel broadens the discussion to include global perspectives, particularly focusing on China's and Europe's economic strategies. Mike McGlone warns of aggressive fiscal and monetary stimulus measures being employed by these regions to sustain their economies amidst geopolitical tensions and internal challenges.

• Key Quote:
  Mike McGlone: "We're fighting for survival... they're doing what Japan did 30 years ago."

Noel Atchison adds that global liquidity and demand, especially from emerging markets like Brazil, India, and Russia, play a critical role in sustaining risk assets, including cryptocurrencies. However, he questions the sustainability of such liquidity amidst declining collateral values and increased corporate costs.

Cryptocurrency Market Dynamics

The conversation shifts back to cryptocurrencies, with Dave Weisberger and Mike McGlone debating the future of Bitcoin amidst the proliferation of over 12 million cryptocurrencies. They scrutinize the viability of altcoins versus Bitcoin's position as a store of value.

• Key Quote:
  Dave Weisberger: "There's probably fewer than... fewer than a snowball's chance in hell that within three digits of cryptocurrencies right now that have any value."

Josh concurs, emphasizing Bitcoin's status as a major asset comparable to traditional giants like Meta, Berkshire, and Tesla. He argues against the notion that Bitcoin will plummet to $10,000, advocating instead for its enduring value as global currencies continue to debase.

Regulatory Environment and Future of Stablecoins

The panel discusses impending regulatory clarity around stablecoins like Tether (USDT) and USD Coin (USDC). Mike McGlone speculates that the government understands the necessity of these stablecoins in sustaining treasury sales globally, suggesting that regulation will be tailored to preserve their functionality without directly challenging Bitcoin's role.

• Key Quote:
  Mike McGlone: "We're going to have some sort of regulation and clarity around all of the tether and USDC stable coins."

Dave Weisberger counters by highlighting the structural necessity of liquidity from government deficits as the primary source of market support, regardless of cryptocurrency regulations.

Predictions and Concluding Insights

As the episode draws to a close, panelists share their forecasts leading up to the midterm elections:

• Dave Weisberger predicts that Bitcoin will significantly outperform gold, potentially eclipsing it by a substantial margin.

• Mike McGlone anticipates continued bearish trends in cryptocurrencies, aligning Bitcoin's movements closely with global liquidity patterns.

• Josh underscores the inevitability of a Fed put during significant market corrections, reinforcing Bitcoin’s long-term upside despite short-term volatility.

• Key Quote:
  Josh: "Bitcoin is the only one that's fully decentralized... As the US dollar continues to debase, Bitcoin will continue to rise in value."

Conclusion

The episode provides a comprehensive analysis of the current financial landscape, highlighting the interplay between declining Bitcoin values, increasing gold investments, and broader macroeconomic challenges. The panel emphasizes the role of global liquidity, central bank policies, and regulatory developments in shaping the future of both traditional and digital assets. Amidst uncertainty, Bitcoin remains a focal point for investors seeking a hedge against currency debasement and economic instability, while gold continues to serve as a traditional safe haven.

Notable Quotes

• Anna Wong (00:59): "The FOMC is coming up market. The market's not ready for a hawkish FOMC."
• Dave Weisberger (04:28): "There is no difference between $10,000 Bitcoin and any other asset."
• Mike McGlone (35:27): "The key thing is now we have the potential that's going to happen. We have the means for it to happen."
• Josh (48:51): "If you look at the stock market, GDP, maybe it just drops back from 1.9 to a very healthy historical elevator about 1.7. That's Bitcoin at $10,000, unless we show divergent weighted strength."

This episode serves as a crucial resource for investors and enthusiasts looking to understand the intricate dynamics between cryptocurrencies and traditional financial markets amidst evolving global economic conditions.