The Wolf Of All Streets – Crypto Town Hall

Episode: BTC open interest hits 2024 Low TradFi leaving? #CryptoTownHall
Host: Scott Melker
Date: February 13, 2026

Overview

This episode features a spirited conversation about the state of Bitcoin (BTC) open interest, institutional participation in the crypto markets, sentiment shifts between retail and institutional players, regulatory and privacy issues, and the rapid evolution of AI in relation to both the markets and broader society. Host Scott Melker is joined by an array of regular crypto finance commentators who dig into macro trends, ETF flows, regulatory challenges, and the implications of decreased Bitcoin open interest.

Key Themes & Discussion Points

1. Bitcoin Open Interest at 2024 Lows: Cause for Concern?

• Definition & Context:
  The panel notes BTC open interest has reached new lows for the year, sparking debate about whether this signals waning demand (particularly from traditional finance - "TradFi") or simply a reduction in derivatives hedging and leverage.
• Analysis:
  • Lower open interest does not necessarily mean lower spot buying demand; it may indicate less derivatives hedging. (B, 01:52)
  • This could be "less bearish" rather than outright bullish or bearish because over-leveraged retail is often a sign of market tops. (B, 01:52)
  • "Retail are followers...Retail will get excited when price goes up, and retail gets morose when price goes down." (B, 04:10)

2. Retail vs. Institutional Sentiment

• Retail Despair vs. Institutional Excitement:
  While retail sentiment (as captured by indicators like the Fear & Greed Index) is extremely poor, institutions and family offices remain eager to accumulate BTC at what they see as attractive prices.
  • "'Right now, you're depressed if you have no dry powder, and if you actually have money on the sidelines right now, you're ecstatic. And that's actually the bullish, bearish divide for vibe.'" — Scott quoting Tillman (A, 03:57)
  • "Every single institution and wirehouse is coming to conferences like this hungry to figure out exactly what their plan should be." (A, 05:45)
• Institutional Onboarding Process:
  • Institutions and especially RIA (Registered Investment Advisors) have a multiyear process: research, limited allocations, then broader rollouts.
  • Recent ETF and wirehouse infrastructure means "they're not even looking at the price action." (A, 07:43)
• Patience is Key:
  • "Nobody gives a shit if it's 120k or 60k. Like a bunch of retail people who can't stand watching their balance drop in US dollars are freaking out. But everyone else with a long time horizon, it's a rounding error if their thesis is right as to where price is going..." (A, 07:53)

3. Market Sentiment, Price & Fundamentals

• Crypto Trades on Sentiment, Not Fundamentals:
  • "Price is down, fundamentals up, it means more potential upside. And over time, prices have to follow the fundamentals." (D, 12:07)
  • "So many people just let price inform their view of the fundamentals...letting price inform your view of the fundamentals is the exact opposite of what you want to do. And it's actually the perfect recipe to buy high and sell low." (D, 12:26)
• Narrative Follows Price:
  • "Wall Street pathology is: narrative follows price instead of price follows narrative." (B, 13:08)
  • "Every story that we're missing right now, if bitcoin goes up $20,000, will be the biggest bullish story of all time and we'll be going to a million, right?" (A, 12:50)

4. The Privacy Debate in Crypto

• Regulatory Headwinds:
  • Deep discussion on the perceived loss of privacy in recent legislation such as the "Genius Act" and the Clarity Act.
  • Chris Giancarlo (ex-CFTC) warns that stablecoin legislation "has locked in every fear that we've had as an industry about surveillance...the worst case scenario." (A, 15:00)
  • The Genius Act gives "government surveillance locked in...all of the features of the Bank Secrecy Act...and gives private companies full visibility into every one of our transactions, which is the double worst case scenario." (A, 15:50)
• Constitutional Protections:
  • "If we had a central bank digital currency... we would have Fourth Amendment protection. And we do not with private stablecoins in the Genius Act." (A, 18:48)
• Practical Perspective:
  • "I think the average person really cares about decentralization or privacy...People are willing to give up their privacy to Google or Facebook for the ease of single sign-on." (D, 21:30)
  • "But do you have privacy? No. 90 some odd percent of [Dubai] is covered with cameras. So do people really care?... People vote with their feet and Brian's undeniably right there." (B, 23:09)

5. Technical Solutions & Institutional Needs

• Financial System Obfuscation Layers:
  • In equities, privacy through intermediaries is standard (e.g., buying through BlackRock/Fidelity). (B, 25:17)
  • Canton's permissioned blockchains are highlighted as "picked by DTCC" due to the privacy needs of big players — "Nobody wants to buy stock having the entire world know..." (B, 25:54)
  • For institutions: "Citadel can't have their block orders broadcasted. They need privacy." (A, 27:46)
• Retail vs. Institutional Rules:
  • The rules that protect privacy for institutions may not translate to everyday users, sparking fears of "living on a social credit system." (A, 27:46)

6. The Rapid Advance of AI

• AI as a Game-Changer (and Risk):
  • Bill Barhydt's caution: "Anyone who's doing that, that does not have coding knowledge, you're going to hack yourself. And maybe, I don't know, Skynet's going to kill you." (A, 29:27)
  • He describes automating his whole life/work in 10 days and warns of both utility and dangers.
  • "He was more complimenting exactly what it does, but a cautionary tale of what it could do." (A, 33:21)
• Practical AI Adoption:
  • Discussion of configuring personal/company-level AI agents— "There are ways that you can get this running... automate different things... educate it on your personality..." (C, 31:37)

7. ETF Flows & Institutional Onboarding

• ETF Flows Slowing, but Not "Cascading Outflows":
  • BTC ETF inflows:
    • 2024 - $35B
    • 2025 - $22B
    • 2026 (so far) - -$3B
  • "That new demand is falling like quite significantly...but I kind of think for like the near term, it's hard to argue there’s less demand from the ETFs versus at least that first year." (D, 37:26)
  • Previous fears of ETF-driven market cascades have not materialized: "Most of the investors in the ETFs are making long-term allocations and in fact that we're only down $3 billion given the fact that we literally hit an all time low on Bitcoin sentiment is I think a really good result." (B, 38:38)
• Institutions Move Slowly but With Force:
  • "These institutions...first thing is, hey, let's make sure we don’t get in trouble, let's make sure we don’t get sued...and we'll make the money in three years." (F, 34:39)
  • Once motivated, "they move. Now, does 'they move' mean they're going to jump in and push everything up immediately? Of course not…but it becomes, they're not going to stop." (B, 35:18)

8. Macro & Trading Structure

• Correlations and Crowded Trades:
  • "The narrative...is that the recent correlation of Bitcoin to SaaS companies effectively sweeps Bitcoin lower when the SaaS companies go..." (B, 49:31)
  • Markets regularly experience "once in a lifetime" events every 1-2 years due to crowded trades and overfitted models. (G/B, 51:28–52:28)
  • "The most dangerous set of words in the world for investors to say: 'well that can't happen' because it occurs." (B, 54:01)

9. Coinbase Earnings & Crypto Stocks

• Coinbase:
  • Missed earnings but surprised to the upside in market reaction, up 14% on diversification away from just retail trading revenues.
  • "They're trying to be the first one stop shop...their profit engine is crypto..." (B, 44:45)
  • "If people start getting expectations of the market improving, they're a high beta play. Way to play it." (B, 45:45)
  • "It's a gratuitous buy. If you're a chartist and you actually believe the narrative of Coinbase's growth." (A, 46:28)

Notable Quotes

• "Retail are followers, meaning that retail will get excited when price goes up and retail gets morose when price goes down." — B, 04:10
• "Nobody gives a shit if it's 120k or 60k...It’s a rounding error if their thesis is right as to where price is going." — A, 07:53
• "Wall Street pathology is: narrative follows price instead of price follows narrative." — B, 13:08
• "The Genius act has locked in every fear that we've had as an industry about surveillance and the worst parts of central bank digital currencies. And we all just cheered it." — A, 15:50 (paraphrasing Chris Giancarlo)
• "If we had a central bank digital currency, we would have Fourth Amendment protection. And we do not with private stablecoins in the Genius Act." — A, 18:48
• "I think the average person really cares about decentralization or privacy...People vote with their feet." — B, 21:30–23:09
• "[AI] is like having 10 of the best chief of staffs ever." — A, 30:44
• "You don’t get FOMO chasing rally type stuff. That’s just not happening. Advisors won’t say that...But the mechanism that they buy is far more controlled." — B, 35:18

Timestamps for Key Segments

• Open interest & cycle analysis: 00:15–03:21
• Retail vs. institutional sentiment: 03:21–08:16
• Institutional adoption process: 05:45–08:16
• Sentiment, narrative, and price: 12:07–13:48
• Privacy discussion (Genius Act, Clarity): 13:48–18:48
• Practical privacy vs. actual demand: 21:30–27:46
• AI as both tool & risk: 28:34–33:21
• ETF flows & institutional process: 34:29–39:39
• Macro, crowded trades, and market structure: 48:17–54:01
• Coinbase earnings and stock reactions: 41:53–46:33

Conclusion

This episode offers a candid view into how market participants are interpreting technical, regulatory, and macro signals at a period of cycle transition for Bitcoin and broader crypto. While open interest is low and retail is “morose,” the institutional apparatus is patiently onboarding and remains undeterred about long-term prospects. Privacy and legislative issues loom large, but there is optimism that the space will innovate solutions. The fast-expanding impact of AI is both awe-inspiring and daunting for industry veterans. The general consensus: volatility and fleeting "down cycles" are part and parcel for crypto, creating opportunities for those with patience and perspective.