← The Wolf Of All Streets
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- [00:01]
A
Good morning everybody, and welcome to Crypto Town hall every weekday, 10:15am Eastern Standard Time here on X. And if we want to talk about reasons to have a good morning, it's because it's very likely that even if only temporary, Elizabeth Warren is having a bad morning. And I don't often celebrate the misfortunes of others unless their names are Gary Gensler and Elizabeth Warren. And if I have even a hint that either of them could possibly be having a bad day, then generally I lean towards having a good one. If you're wondering why, you'll probably see the story above. Crypto mogul CZ Mulls suing Elizabeth Warren demands retraction for alleged libel after Trump's pardon. In case you were living under a rock and missed it, I also pinned my my tweet up above Elizabeth Warren had said CZ pleaded guilty to a criminal money laundering charge and was sentenced to prison. I wrote, shame on you, Senator. He did not plead guilty to money laundering and clarified that he pled guilty for causing Binance to violate the Bank Secrecy act by failing to implement an effective anti money laundering program. Ocean of difference between the two, of course. Then we all started spamming our contacts at Twitter to get her community noted, which she did. And then as all these tweets about, not just for me, everyone went viral, people kept encouraging CZ to sue her and maybe that's going to happen. Perry, Ed, you were the first person that actually sent me the tweet about CZ potentially suing. I mean, this doesn't get any better than this, honestly. Entertainment value at least.
- [01:43]
B
I mean, as someone working in crypto policy, this is definitely a very fun development. It definitely makes the job a lot more fun. We've had many, many years of the anti crypto army just attacking us relentlessly. And Senator War has been at the forefront of that. And she has disparaged our community. She's done everything she can to try to kick companies out of the United States, try to harm innovation, harm our ecosystem, and no one's really stood up to her. And she has a very long history of just saying things that are not true, that are not factually accurate, that aren't correct. And she's never really been held accountable. So I'm really proud of Cuz FCC for taking this extremely bold move. It takes like a. It takes a lot of courage to push back against someone as powerful as the ranking member of the Senate Banking Committee. This isn't just any rank and file member of Congress. Senator Warren does have very real power and she does sit in an influential position over the financial industry. She made a mistake, a very, very critical mistake in the way that she went about disparaging cz. Members of Congress do have special protections, whether or not we think they're fair or not. But they do have special protections when it comes to, to legislative acts, like official, legitimate legislative acts. So if you're on the floor of the US Senate or if you're introducing legislation, there's a speech and debate protection where it's quite broad, I'll let the lawyers opine on it, but you can kind of get away with saying basically whatever. So I think she's really abused that for many years or maybe taken advantage of that to paint a very particular narrative of our community that that's not true. She made a big mistake when she came on crypto Twitter.
- [04:06]
A
Yeah, don't tweet it when you come.
- [04:08]
B
On X, like this is our domain, this is our territory. Right. So she came on X, spewed her garbage, lies, and now there is an opportunity to, to hold her accountable to these disparaging statements. So it'll be interesting to see how it plays out. If you read the letter in detail, she has seven days to retract her statement. So we're just going to watch very, very closely over the next week to see if there is a correction made and if there's not, there was a very legitimate threat for a, a lawsuit. So this story will be developing over the next couple days and weeks and I would bet that Senator Warren's going to play the victim card here. She's going to go use that speech and debate protection. She's going to do something in an official senatorial capacity. Maybe she'll give another speech. I do think the resolution that she introduced on Monday, the resolution she just introduced with Schiff, I do think that was her backtracking a little bit to try to cover her tail on, you know, what you said. Can you guys still hear me? It's got a note saying my connection was lost.
- [05:30]
A
Okay, so you're good. Yeah, it happens.
- [05:33]
B
Yeah. I think the resolution was a little bit of backtracking and covering her her tale by putting the narrative back in that in an official legislative act. So this will be developing. There's a lot more to dig into, like into the resolution itself. You can't really undo like the Senate does not have the power to undo a parted like what is she trying to do? Is this obstruction of justice? But this is the same story. And I feel like every time I come on Crypto town call. We're always talking about Elizabeth Warren. So it is a good day to see someone stand up and, and push back and hold her accountable. And it's, you know, it's, it's really about time.
- [06:13]
A
Yeah. My only fear, obviously, is like, that it could be expensive for cz and I don't know if he can afford the lawyers, so he should probably start a GoFundMe.
- [06:23]
B
Yeah, well, I'm sure she, Elizabeth Warren has access to ruthless lawyers, I'm sure, and probably the scummiest of the scum out of the DC squad swamp. So I, you know, I'm sure there will be a very interesting legal strategy that comes from the other side. But, you know, she's picked a fight with someone who. Money isn't really an issue and who actually does have the resources to bring in the right people that can, like, truly challenge, you know, challenge hard. And hopefully, you know, my hope is that we just put an end to defaming our community, that crypto innovators can build in a fair way without members of Congress or policymakers trying to shape the market into what they think it should be. Let the free market operate. Let innovators innovate. Let builders build. We should have guardrails. Right? We should get back to working on market structure legislation instead of spending our time debating if President Trump is, you know, should be issuing pardons or not. He can do whatever he wants when it comes to pardons. Let's get back to creating a regulatory framework for crypto so we don't have another ftx. So exchanges and crypto companies can operate with clear rules to the road so they can become registered and regulated here in the United States with the highest investor protections for American retail investors. That's what we should be doing. But instead we're playing Elizabeth Warren's political games. And that's taking away from the real work, which is building the regulatory framework for the crypto markets.
- [08:07]
A
Since I happen to have you, and before we go on to the rest of the panel and the other topics, where do we stand on all of that? Can you just give us the quick TLDR on odds of market structure clarity getting passed and when that might happen, because we've had some roadblocks.
- [08:25]
B
Right. Well, I actually do think this is very much related to market structure. So I think all of this whole, you know, we're in political theater. We're watching the show political theater play out in real time here. So the real work is getting the Clarity act or market structure legislation passed President Trump made very clear that he wanted this bill on his desk before Congress left in August for August recess. It's now almost November. August has come and gone. And the bill we, you know, we still really don't have, you know, a bicameral bill to work off of. Congress still has to do its job, and the House has passed there, so it's in the Senate's hands. So when the CZ's pardon came out, you guys probably saw a big part of the narrative was corruption, quid, Pokemon, quid pro quo. This was, you know, someone buying their pardon. And if you really dig down into the tea leaves, all of that is absolute nonsense. There is no partnership between CZ or Binance and anyone in the Trump family. It just doesn't exist. It was literally made up. Why? Why would they make this up? Well, that would be a really great narrative if your objective was to slow down crypto policy because you don't actually want it, because you want to crush the industry, because you're in the anti crypto arm. So all of this is just a distraction to slow down the real work of what's happening in Congress. Come up with any narrative you can to try to derail the conversation and waste precious calendar time on something where the real intent is just to try to stall the industry, stall the industry from making any progress, stall innovators or companies from being able to build in a regulated format or fashion. So it really all comes back to that in terms of timing now, you know, it's, it's, it's hard to say. We're in the middle of a government shutdown, so there's really not much happening on Capitol Hill right now until that gets resolved. I don't know when that's going to get resolved. That's kind of a whole, you know, we should have probably a whole nother town hall just on what's going on with the shutdown. But people are very, very hopeful that it still could be this year. It does need to happen this year, next year, it's still on the table. This is the most important item in crypto policy agenda in D.C. there's just other, bigger political things happening, like the shutdown that are taking place.
- [11:00]
A
Matt, you had your hand up.
- [11:01]
C
Yeah, thanks, Scott. Perryanne, I love your work. Just really curious. I saw Ro Khanna coming out, moving some type of legislation forward, wanting to ban Trump and all that. Can you give us any insight on the legitimacy of that, what the legs look like on that, and just your thoughts on how that might play out?
- [11:21]
A
I'm not sure if Perry. And did you hear the question?
- [11:25]
B
No, I can't hear Matt at all.
- [11:27]
A
Oh, yeah. Welcome to Spaces. It works exceptionally well, almost honestly, like, Spaces has been in a. In a Twitter shutdown. It's like a government shutdown, but all the time.
- [11:38]
C
Scott, did you get the question?
- [11:39]
A
Yeah, I got the question. And Perry, he basically said Rokana floated that legislation to ban. I mean, it said Trump, but I think it was everybody. All government officials. Yeah, I think it's all launching, but. But owning cryptocurrency, which was kind of wild. And I think, Matt, just want to know if that actually had legs and what that looked like.
- [12:01]
B
I mean, it probably doesn't, but I mean, why. Why stop at crypto? Why not?
- [12:06]
A
That's my question.
- [12:07]
B
Yeah, why don't we ban, you know, the Trump family from owning real estate or. Or gold or anything? Like, why crypto? Why are we singling out crypto? I mean, that's really. This is the whole thing of crypto policy in the US for decades, which is we're.
- [12:25]
D
Because they can't. Insider trade crypto.
- [12:27]
B
Yeah, we're going to demonize the crypto industry, hold it to a completely different standard. Completely ignore that. You can have, you know, bad things happen in every other industry, but no, we're going to hold crypto to a very different standard. And that's exactly what happened to cz. He was held to a totally different standard. He's the only person in the history of our country that went to jail for a single violation.
- [12:52]
A
He's also not American, last time I checked, but I guess that's just a rounding error.
- [12:57]
B
Yeah, and he didn't. His business wasn't operating here. I mean, there were US Persons that had accessed Binance, but that their company was. Was not here. So they used that to use the long arm of the DOJ to go after Binance and him personally. But it's the same thing. We're going to hold crypto to a very different standard. Why? Because their objective is actually to shut us down. And that's called discrimination.
- [13:22]
A
Yeah, Ryan, you had your hand up. I'll just say we also had the DOJ just go reach that long hand over to Cambodia and snatch up 127,000 bitcoin for our strategic Bitcoin reserve a couple weeks ago. So they'll take it if you have it. Go ahead, Ryan.
- [13:40]
D
I mean, I felt like CZ getting arrested felt more like a prisoner of war than, like, justice. It's. I mean, like, as you said, cz was not a United States citizen. He wasn't operating here. It was just, oh, man, I don't know. I have a lot of very polarizing beliefs in this area. And when it comes to them trying to ban ownership of crypto, oh, why don't we just make them, like, ban ownership of the stock also because everyone knows how Congress can enrich themselves on passing legislation and knowing inside information on the stock market or private equities or anything else they enrich themselves on. It's just this whole system's absolutely, unbelievably corrupt. And I hope he goes after Elizabeth Warren. She deserves it. She, you know, CZ took down ftx, he can take down Elizabeth Warren. Like, CZ has my full support to, to start going after these people.
- [14:36]
A
I would just make the argument. I always hear people. So I think people conflate a lot of different things. Right? So there's a. And I, I like cz, so just putting that out there. But a lot of people don't like what CZ's done at Binance or all those things, but that still. And then they'll say, so it was justice served and he shouldn't be pardoned. But those are completely two different issues. You can dislike how Binance operates and still not think that somebody should unjustly go to prison for something that they didn't do. Right? And so I think it's just weird when you get on social media and people start digging so deeply into these things that CZ took down ftx. Ryan, you're right. But I would point out, and I always do, when people say that you can't take. Couldn't have taken down FTX unless SBF was a massive fraud and they were literally, like, doing something wrong. It's not like CZ may have, like, you know, been the straw that broke the camel's back or given them a little push over the edge, but I think we can all agree that we're all better off right now, even through all the pain for FTX having collapsed when it did 100.
- [15:38]
D
And I guess my point being making comparison with Elizabeth Warren, maybe, maybe CZ's the strong.
- [15:47]
A
I mean, listen, I, I pinned this tweet above about Elizabeth Warren. Probably my, like, my most viral tweet late was when Maxine Waters tweeted that I don't have it exactly in front of me, but, you know, she tweeted that that Trump was giving out political favors to people who, like, gave him money. And I literally just posted a picture of her with SBF. I didn't even say anything. Just like SPF's arm around her. I mean she literally took campaign contributions from the guy who's the actual fraud and has the like hubris to tweet about what Trumps are doing. It's just the double standards and the whole thing is just astounding. But I just wanted to make the point that regardless of what you think about cz, he went to jail for something that every banking executive in the United States should have gone to jail with a hundred times over. If you believe that he should have gone to jail for it, including Jamie Dimon and all the others who have paid tens of billions of dollars of fines transparently for literally allowing money laundering. Talk about Epstein's bank. But they, you know, Wells Fargo, these companies have paid tens of billions of dollars for money laundering. And allowing money laundering worse than what CZ went to jail for. Anyways, we should probably pivot to discussing the market further. We obviously have the FOMC today at 2pm the most important FOMC meeting. Until the next FOMC meeting, I guess. 99.5% chance of a rate cut today. Most people pricing it another rate cut at the next meeting. So at least two this year. Seems like we're heading in a very definitive direction here. Interestingly, I think I said, Mike, I want to talk to you about this. Interestingly, I think I saw a stat today. There's only been three cuts in history. It was something three, three or four. Three cuts in history, I believe where the S and P has been at an all time high. And we've had interest rate cuts and all three of those times the market was up massively a year later.
- [17:50]
E
I love those quotes that are just not wrong for someone who's been trading for almost 40 years. I remember being.
- [18:01]
A
I lost you, Mike. Did you guys hear Mike? No, he rubbed.
- [18:05]
C
We lost him.
- [18:06]
A
Yeah. Damn. You know, I threw up the alley oop and just slammed space into the back porch. Happens, happens on X. Mike, we can't hear you. If you can hear us, I'm. I'm sorry. But anybody else want to run with that one? Obviously FOMC today and president there.
- [18:26]
F
How about.
- [18:26]
E
Am I back now?
- [18:29]
A
There he is.
- [18:30]
E
I got, I got a phone call. So same thing in 2007, the first Fed first started cutting rates. Market went up and then it dropped 55%. That's the S&P 500. So I'm in a similar predicament now. I was really bullish in stuff like gold back then, but not anymore. It's already had its run and now we have its complete consensus. I mean just, just like there was complete bullish consensus for cryptos a few months ago. That's when you know you're supposed to be getting out. There's complete consensus in the narrative now. You got to be long equities, you got to be in the market. Fed's easing, it's all good and it's just never happened with the stock market this expensive. Now it depends how you measure it, but I do versus market cap to GDP versus the rest of the world, all those things. But it's complete consensus that you have to be careful. And that's why I point out that macros so the Fed's going to cut 25, it's priced in the market. They're going to be at 3% a year from now. That's already in the system. We have to have that. The only really way to get more than that or below 3% is if stock market.
- [19:26]
G
Goes up.
- [19:27]
E
So but the key thing I'm, I like to point out is we've seen pretty significant divergent weakness and toppish activities in the tip of the iceberg. That's cryptos. First of all we've had you know, massive pile on into poor performance and massive euphoria and hubris. It's classic signs of peaks. And then I look at the Bloomberg Galaxy crypto index, it's up about 10% on year and beta S and P 500 is up about 20% in here. That's a bad sign. They also look at the key thing I'm watching is the tip of the tip of the iceberg is MicroStrategy. MicroStrategy is backed up to 280. That's a level that has to hold. I mean that was the gap when Trump got elected and it looks like it's tilting down at the same time I look like T bond futures are tilting up. Now I mentioned that one because MicroStrategy I've never been so more closely touched to a stock because I've had two years ago two fathers of two sons asked me why, you know, tell me talk their sons out of being in it. And I used to be in the trading pits in the T bond. So to me the macro is it's so priced in now and then I look at things that are historically have never happened. We've never had a rally like this in gold up 53.3percent in the year and a decline in crude oil like this down 15% in the year which is More than the extreme in 2008 ever without, you know, it usually means something. So that's when I tilt over to what's where's I'm seeing divergent strength in markets. The S and P Bloomberg 20/ treasury bond index, it's up about 10% on the year, despite the fact that stock market's up, you know, creating that massive inflationary wealth effect. So there's, what I'm looking for is the next big trade, what happens. And crypto is a great leading indicator. So I stick with that buy gold's way too overbought now. So that's was the bias at the beginning here. That's done. The only thing I have left is treasury bonds. And gosh, you know, stock market has to go up. That's why I look at it as, yeah, I've been wrong on that one for a while. But there's been better things the last five, 10 years. You're much better off in cryptos and certainly for the last few years you're much better off in gold. But now we're so dependent on the stock market going up, you look for alternatives. And sometimes I'm just fearful a little bit of deflation ticking in and I'm seeing all the divergence kicking in. And so I think leading indicator is microstrategy. It has to bounce from here. And so I look as a trader, if you like, in, in 2008, I was way short everything and I bought Lehman at when it dropped below 2. I had to just, just in case the, you know, the Fed, you know, bailed them out. It would cover all my shorts and I was happy to lose money on that. And this way I look as I was a trader. And if there's anything you're supposed to be defense, right? You have to test this 280 level in MicroStrategy and if it holds, great, everything's fine. But if it breaks down, go with.
- [21:56]
F
Wait, Mike, you didn't tell us what to buy, man. Tell us what to buy.
- [21:59]
A
He said bonds, treasuries, okay.
- [22:01]
E
You can never go wrong. I'm sorry. It's also one of those things I do have to hop off. I apologize. But just also, sometimes that's a good indicator. They want me to talk about soybeans on radio. Oftentimes those are signs, either peaks or bottoms.
- [22:15]
H
Hey, Mike, I had a quick question here. Bloomberg basically came out with an article about how the TIPS market's getting mispriced because you don't have inflation data. That's 7 trillion fixed income Market Granted at some point in time the government gets back to work but we don't know how long the shutdown is to going, going to run. Just give me your thoughts on that development.
- [22:35]
E
Yeah, again I think that's a key thing from the macro standpoint. It's from Anna Wong is the shutdown is very bad economically partly because for every one government worker there's two contractors that they're just not coming back. And part of this shutdown is why the Fed's going to be easing. But as far as that, I mean that's part of the dicey part but we have a lot of other indicators and that's why I look at just what I'm seeing in with crude oil dropping. When I was trading Treasuries used to always watch crude oil. It's pretty signs of deflation. But the number one factor for the TIPS and everything is we all know is if the stock, stock market is a 10, everything else is a 5 or below even CPI. When you get 2.3 times GDP it is the economy and if it goes down there's severe deflation and if it stays up that's going to keep inflation sticky. I, I do have to hop off though. I apologize.
- [23:21]
H
Thanks.
- [23:23]
A
Thanks Mike. There were quite a few hands went up and then they all disappeared for me. So Andre, I think you were up.
- [23:31]
I
Yes, thank you. Yeah. I think you do have inflation data despite the government shutdown like alternative inflation data. Like inflation.
- [23:39]
G
Right.
- [23:39]
I
And it's been accelerating. Right. It's been accelerating to I think year to date highest it's now at 2.5%. The last print by the BLS was 3%. Right. But it tends to, it has under shoot it like the real BLS number so far. But it essentially means during this shutdown period US inflation accelerated. Right. And I think if the Fed ended QT today it will would most certainly be a kind of signal for higher inflation tolerance. But like I want to also comment on, on Mike's, Mike's thesis. I'm actually taking the other side.
- [24:16]
H
Right.
- [24:16]
I
I wouldn't say like sentiment in the stock market is like euphoric.
- [24:20]
A
I mean there's also 10 fear and greed by the way on the stock market was in fear today with this stock market an all time high.
- [24:28]
I
Exactly. Fear like it was even extreme fear. I think last week. Right. Touched extreme fear. We had extreme fear and crypto fear in the crypto fear and greed index. We talked about like this bummed out sentiment during the 10th of October.
- [24:42]
E
Right.
- [24:43]
I
Was like super asymmetric we talked about this at Nauseo.
- [24:46]
A
Right?
- [24:47]
I
But so I, I take the other part because even despite the fact that we are probably all time high in valuations, right. There's no doubt about it whatsoever that like the stock market's overpriced, but it will keep. My view is it will become even more expensive because liquidity is accelerating. Right? And even despite like recessionary, in a recessionary environment, we, we haven't really seen like a huge stock market crash right, in April, but we had like max uncertainty, tariff policy uncertainty and so on. But so my, my own bullish thesis centers around rate cuts essentially, but not only like Fed rate cuts. If you look globally, right. The number of rate cuts, and I think the bank of America put out that chart. The number of rate cuts around the globe by major central banks over the past 24 months is now higher than after Covid. So it's second highest after subprime.
- [25:50]
H
Right.
- [25:51]
I
It's just crazy. There's like a huge amount of rate cuts, huge amounts of monetary easing and it tends to lead what I call animal spirits, which is like the Philly Fed forecast, six months forecast for manufacturing activity and. And so on, which also leads the ISM manufacturing index and all these other leading indic risk. Right. So the whole business cycle. And so that's one part rate cuts, monetary easing and ETP flows. Right? And ETP flows into crypto, they tend to be risk on, risk off.
- [26:22]
A
Right.
- [26:23]
I
They tend to be like the marginal buyer, but they cycle with sentiment, like global risk appetite, crypto sentiment and so on. So I think because this macro cycle will continue to be bullish, right. Based on monetary policy easing, I actually expect that these ETP flows will not only grind fire structurally because of higher adoption, right. But also from a pure cyclical perspective. And there's also seasonality in these ETP flows. I mean you've already seen these kind of bar charts with like bitcoins performance seasonality where like November is like the best months. But Q4 in general also tends to be the best month for crypto. ATP flows for Bitcoin, they tend to shoot up because of window dressing ahead of year end and also rebalancings and so on. So I actually remain quite bullish even even if the Fed doesn't end QT today, even if they don't deliver another rate cut.
- [27:23]
A
Matt, I think you had your hand up. They all disappeared again.
- [27:27]
C
Yeah, yeah, great comments there, Andre. I just wanted to bring it back to maybe the FOMC and obviously I think we all know that 25 basis points is baked in. But I'm just kind of really curious as far as the guidance moving forward because I think, and again I'm not super smart so I'm glad that we've got really brilliant people in here. But I'm kind of watching this $31 billion in options that are set to expire here Friday. And what is the tone from the FOMC set for those, those options to expire? Is it going to be dovish, is it going to be in line, is it going to be hawkish? And what does that do? And we're looking at some strike zones around about 114,000 for the max pain level is what I'm seeing. But I just didn't know if anybody else in this room on the panel. Scott, I know you do a lot of in depth work on this kind of stuff. What are you seeing from your 31.
- [28:10]
A
Billion is huge is a huge number for the Friday expiration. I think it's the biggest we've ever had. But we always hear the max pay narrative and rarely see it play out. So but that said we're very close. So to me that would mean that the most likely thing actually maybe we get some FOMC volatility is that we just kind of chop sideways and don't make a big move because we're actually so close to it. I mean the narrative is always that if it's kind of, you know, distant but reachable then you see a ton of volatility in that direction. But I haven't even looked at what we're trading at right now. But I mean if the max pain is 114 and we're at 112.6, I mean it's around a year.
- [28:46]
H
Yeah.
- [28:47]
B
Right.
- [28:48]
A
So but that would be it. Yeah. Anybody else taking a look at the options expirations? 31 billion is by far the largest I think that we've had on a single day at least. And yeah, if not we can just keep kind of continuing on the market conversation. Mark, I would actually love your thoughts on what's happening with the Fed and you know, kind of year end how you view market movements to likely go.
- [29:14]
G
Yeah, it seems like there's a big catch up trade here. You guys know Mike Howell who does the liquidity out of capital wars I think is the name of his firm.
- [29:27]
A
Yeah, yeah, yeah.
- [29:29]
G
I think he's the best. And what he's setting up for here is, and I, I do outsource some of my work, meaning I, I know some folks go deeper into an area, I do audit it and have followed it not as closely as he does. And I'm bringing it up because we are at the end of liquidity. It's metal on metal. The TGAs at max repo's drawn. And you know, the Fed is reducing, you know, balance sheet expansions. We know, sorry. The Fed has been shown to be dribbling out of QT and like, well, QE's next, like maybe. But the other aspects, which is TGA and, and the repo facilities and then globally is there's no tailwind left. So these folks have to double down and there is a risk of a fall. And if I had to say 50%, you know, a setup here is the liquidity will force a decline in the market in the next three months and they'll come, if something will break and they'll come in and do a BTFP or something like that. So I think that's the thing that's not being spoken about is we are declining on liquidity. And this has been a liquidity Fed market globally, not just in the U.S.
- [30:49]
A
It'S funny though, that means that you get a few months of declining liquidity which causes a massive liquidity event. So either way you end up with liquidity.
- [31:00]
D
Right?
- [31:00]
G
Yep. Have a drawdown fund, everybody run, open up a firm, get a drawdown fund. And that would be a good entry point. I think it'll be brief.
- [31:11]
A
What a market. Andrew.
- [31:14]
I
I think Matt was first, but I.
- [31:18]
A
Think Matt went, but I don't see hands. So just roll, just roll with it. Just roll with it. Yeah.
- [31:25]
G
Okay. Yeah.
- [31:26]
I
So on first on the, on the reserve side, liquidity side, it depends on your definition of liquidity. I mean, have you checked the correlation between net liquidity, slash bank reserves of a PET and Bitcoin or Ethereum or any kind of crypto assets that the correlation essentially broke down in 2025.
- [31:46]
E
Right.
- [31:47]
I
Reserves went lower, net liquidity went lower. But like bitcoin and all crypto assets continue to move higher. So I don't think like that's a meaningful correlation right now. Maybe. I mean if you're bearish, that might imply, okay, Bitcoin and all other crypto assets, assets might follow reserves slower. But I don't think there's like any kind of meaningful relationship between those two. But like that being said, net liquidity is essentially like reserve fat assets minus tga, minus reserve repos. Right. And you're completely right. I mean like TGA is like drawn out. Reserve repos are near zero.
- [32:26]
H
Right.
- [32:26]
I
If they increase, then you have like a decline in net liquidity again. But if, if the. Let's say the Fed ended QT today, right? That that whole calculation reverses, right, because the assets grow again and so on. So. But any. Anyways, I think what's more important in this whole conversation is like money supply, M1, M2 and so on, which are essentially commercial bank deposits. Right. They have been moving higher.
- [32:54]
E
Right.
- [32:54]
I
The growth rate has even been accelerating.
- [32:57]
H
Right.
- [32:58]
I
Unlike Fed reserves. So I think that's more important. And there's been a tighter correlation to Bitcoin.
- [33:06]
A
Anybody else, specific thoughts here on FOMC markets? Otherwise, I want to talk about ETFs, because obviously we had a few ETF launches yesterday. Hedera etf, a Solana staking etf. Grayscale is launching their Solana staking, I believe today. Oh, Andre. I mean the Solana etf. You're, you're, you're bitwise. Hi. This is how good? Well, my brain's working on 11 hours of sleep in three days. You guys. Obviously lots BSOL, it was the most successful ETF launch of the 850 that have launched in 2025. Obviously it pales in comparison to the Bitcoin spot ETF launches and smaller than the ETH launches. But for this year, of all ETFs in all categories, BSOL was the biggest first day, right?
- [33:58]
I
Yes, that's right. So we had 69.5 million in net inflows yesterday. In a single day we had 200, around 220 million in seat. So the AUM increased to almost 300 million. We are, we're still seeing net inflows today. Right. And so, yeah, it's a very good stuff. But to be, to be fair, we've been the only product on the market, right?
- [34:24]
A
Yeah. Is Grayscale launching today? Is it today?
- [34:27]
C
Yeah, they do.
- [34:28]
H
Yeah.
- [34:30]
A
Dude, there's a good, good for you first mover advantage in this space is so big. I mean especially I remember the launches of the futures ETFs when people were jockeying to be like within an hour of each other because it was such a big difference. Maybe the environment has changed now though.
- [34:49]
I
The first move at bunch in the ATP business is like half, half, half of the deal.
- [34:54]
A
Right. And it's the first mover on staking. So it's not even just that it's the first on Solana. Now you have the staking, which is, which is huge. When do you think we get ETH staking?
- [35:06]
I
Good question.
- [35:06]
A
I have no idea.
- [35:07]
I
To be Honest.
- [35:08]
A
I mean it should be yesterday. Like what are we doing here? This is so stupid. Maybe they can just like unshut down the one guy at the SEC who pushes that button and then re shut him down tomorrow after they make one reasonable decision. Go. Go ahead, David. Dave Garrett, you had your hand up.
- [35:27]
I
Hey.
- [35:28]
H
Yeah, I thought that Forward Industries that came out in September was doing Solana staking or at least they're staking.
- [35:35]
A
Yeah, yeah. I mean they are staking their Solana, but you know, and buying a Treasury company and buying an ETF that has staking built in are pretty different.
- [35:44]
H
That's cool. Yeah. Bigger question is, yeah, we can't argue about the news flow being like massively big positive for crypto and yet this market just doesn't seem to be going anywhere. What's up with that?
- [35:55]
A
You know, it's funny David, I, I said this this morning and I actually tweeted something to this effect and I would love people's opinion on this. When I was at Money 2020 I did a couple interviews where I was kind of on the other side of the mic and people kept asking me about before we four year cycle and are we in a bull market and a bear market. And the more I thought about, the more I thought we're absolutely in a bull market.
- [36:16]
H
Right?
- [36:16]
A
I mean Bitcoin's 115ish thousand dollars, 112 rounding error, whatever. BNB made new all time highs. Salana obviously had a run from 8 bucks to 300, whatever. But it's been the absolute worst bull market ever. And I would venture to guess that outside of the very intelligent people who have simply dollar cost averaged into bitcoin and not sold it the entire time, who have made gobs of money. Gary, you and I have talked about this. Like this market has found a way even worse than FTX and Celsius and all those to just rinse everybody and make sure that nobody made money in the bull market. It's pretty unbelievable when you think about it because not only did like there hasn't been the alt season everyone was waiting for, so I think a lot of people are over deployed into alts that have effectively been down only. But on the flip side we had alt season in crypto adjacent public equities. So all the money has actually been in stocks, but even the biggest players in the market went heavily into treasury companies which all look like Christmas tree pump and dump charts from ICOs in 2017 and are all trading either at a discount or below the pipe investment. So Even the big money has largely lost and not profited from this market. And then on top of all that, you have the $19 billion liquidation event in one day where all the people who are actually deeply in crypto got liquidated and lost all their money.
- [37:41]
H
So the idea here is that we're going to make a T shirts for Christmas, and it's going to say exit liquidity on it.
- [37:47]
A
No, everyone, it's going to say, I came for the crypto bull market, and all I got was this stupid T shirt.
- [37:53]
H
Bingo.
- [37:53]
J
Hey, guys, it's gonna the. The ultimate T shirt is K, I, S, S, B, T, C. Yep.
- [38:01]
A
Keep it simple. Stupid.
- [38:02]
J
Keep it just simple, man. It's gonna freak everybody out that the most conservative play here. Buy bitcoin, do nothing, add more bitcoin, take some debt out, buy some. Bitcoin will be the game of all games. It's irony, man. Right? It, like, it makes so much sense that this is the. The way to make money. And it's effortless. Every other stock or equity or crypto position I have has cost me more headaches than the position deserves. It's amazing.
- [38:42]
A
Yeah. And I've told this story a million times, probably here, but worth reiterating because, Gary, you and I flew to Vegas together for the conference. So this was May, right? Not. Not recently at this point. And we discussed this just the other day on my podcast, but we probably spent literally five straight hours, you and I, talking about the market. We really talked, I think the entire flight, and every hour we would go. Is it really just this easy? It can't just be this easy. It's just this easy. And the conclusion of the whole thing was just do nothing and buy bitcoin. It's literally that easy. Right? I mean, that's what we came to with trying to do for hours.
- [39:21]
J
And like, we have 15 years of history. And, you know, between you and I and a few others, it's not like we don't know people and their stories. Everyone tells the same story. They didn't stack enough, they got clever, they stopped buying, they stopped adding. It's getting clever part. I just don't think you're gonna fucking make decide what this redhead's gonna do. I will refer to bitcoin as the gorgeous redhead for the rest of my life because it just defies anyone's ability to predict its behavior.
- [39:58]
A
Adam, go ahead.
- [39:59]
F
I was just gonna say that sounds like all markets almost, but it just feels like to me, like, this is just the ETF cycle, right? It's just it's all paper. Nothing's on chain. I mean, even just thinking of the, like, NFT cycle, last cycle, you know, you had to buy. You had to buy eth and it had to be on chain, and if you wanted to take part, you just. You had to buy Ethereum and. And have it in a wallet. Right. And this just feels like none of.
- [40:25]
A
That is passed down.
- [40:26]
F
I mean, we had a meme coin cycle, but that was so niche.
- [40:29]
J
It wasn't. It wasn't.
- [40:30]
F
It didn't break into kind of mainstream. And it just. This is the Wall street cycle and it.
- [40:35]
A
So I'm.
- [40:36]
F
I'm not convinced we're gonna have any alt season this cycle and maybe never again, frankly. Yeah, just.
- [40:42]
J
Dude, I'm with you. Yeah, I think it's done. I think it's absolutely done. It's gone to the paper market. Paper market's a better market for all.
- [40:52]
A
Yeah. Alt season is just IPOs and Treasury companies for now. This is what it is. Carrie Ann. Carrie Ann, I see your hand up. I'm not sure if you can hear anyone at this point. I don't think you can, David. Go ahead. I see your mic's up.
- [41:14]
H
Yeah. Just wanted to say alt season, I was. This is a little bit of old news, Kadena. When the foundation came out and just said sort of like unexpectedly, hey, guys, we're shutting this operation down. The token crashed 55%.
- [41:30]
A
I'm surprised it didn't go up. David, in this world, in the. In the Gamestop, like, Hertz goes bankrupt and triples, you know, should have gone up.
- [41:40]
H
No, no, no, I hear you, but you're talking about securities equities on the one hand, and we're talking about crypto and Kadena on the other. Equities have at least some form of financial disclosure. Kadena and alts, obviously, and, you know, don't. So really, investors don't have a chance to kind of like, you know, have knowledge or insight into what the hell is actually going on in these organizations that have supported these tokens. And, you know, without that kind of disclosure, people are flying blind. And, you know, I think that's going to weigh against ALT succeeding. I would also argue Perry Ann's talking about having investor protections for crypto. You know, there needs to be a reporting requirement. There needs to be disclosure. You can't have people just like, you know, pissing away their money or their savings on, like, tokens that, you know, just. David, they could be casino chips, man.
- [42:34]
A
You are aware that the President of.
- [42:35]
B
The United States launches Good.
- [42:38]
H
Well, yeah, I mean, grift is grift and the guy's on a poster for it, right?
- [42:43]
B
Well, once we have. Okay, let's just look. Take stable coins as an example. The stablecoin legislation passed this summer. And look at how many announcements we've had around stablecoins over the past six weeks. Even just yesterday, Western Union announcing.
- [43:00]
H
Yeah, yeah, that's all, Perian. That's all well and good because stable coins are by their nature and by design supposed to be backed, you know, one for one, in terms of, you know, some form of instrument that has the full faith and credit of the U.S. government. You know, we're talking about altcoins that don't have that. So. Stable coins. Yeah, they make all the sense in the world. You know, frictionless, faster. Hell, I use them to pay people around the world. You know, they're really happy.
- [43:29]
A
Yeah, we all do.
- [43:30]
C
Altcoins.
- [43:30]
H
Yeah, I know. Not alone.
- [43:34]
B
Yeah, I'm just making the point that with regulatory.
- [43:37]
H
Don't credit me with anything original, but Perry, using stable coins as a counterfactual here, flat out wrong. Altcoins, they need to have reporting disclosure. That's some sort of financial.
- [43:48]
B
That's exactly what I'm saying. The point that I'm making is that with regulatory clarity, with having a regulatory framework comes more economic activity, more market activity. The stablecoin legislation passed. We're now seeing more economic activity happening in stablecoins. Once we have the market structure bill, I think we will see more activity happening in the crypto space. It's not apples to apples comparisons, but what's a big piece lacking for crypto is our. Is our regulatory framework. I period. Everybody, you know this platform. I hear like half of the speakers. But Scott, you had raised a question earlier of like, it's like, why aren't we feeling a bull market? And I think somebody made this point. I'm not sure because I couldn't hear everybody, but there is a lot of paper bitcoin in. In the system there. We have a lot of rehypothecation happening in bitcoin as well, and I think that is suppressing the price quite a bit.
- [44:51]
A
That makes perfect sense. Could you hear Gary? Gary, you're about to ask her something. I can relay the question for you. You know, we can Western Union it over on our Solana stable point.
- [45:02]
J
Well, now that you bring up Western Union, I think that's worth talking about. Not a great day for one company, but I was going to ask Perry Ann, why would you think that the Stablecoin market will allow the token market. The, the. The. The gentleman was just trying to say, hey, look, the token market has no. There's no liquidity controls. You don't really know what's there. I don't see how the token market survives once stable coins become prominent.
- [45:36]
A
Perry, could you hear him give up? Yeah, Gary, I think we'll just leave it as the question, but I think it's a question a lot of people are asking. And even I would say a lot of places that we saw stable saw tokens being integrated are now just doing it with stablecoins. Right? And I was at Money20 20 this whole week, so it was all about payments and fintech. And I can promise you nobody's talking about integrating a token that can go up or down in value for their payments rather than a stablecoin. Everybody's trying to find their angle with stablecoins. The Western Union thing is bananas to me because Western Union is basically the fucking pony express of payments, right? They charge predatory fees to horse and buggy your money around the world. They've been around for 7,000 years, literally. I think Jesus used it to send. To send wine and water. And they're using Solana to build a stablecoin. I don't know which part of the simulation it is, but I'm fucking loving it.
- [46:45]
F
Why not?
- [46:46]
A
And when they.
- [46:47]
F
I mean, you heard they might have gotten, you know, a nice little payout from Solana to basically do it for them, I mean, it's. I think it's smart. Like, what else are they going to do, you think? I think so, yeah.
- [46:57]
H
Yeah.
- [46:58]
A
No, I think the Solana intern pitched Western Union aggressively and on the tech. Yeah. Listen, it's a partnership.
- [47:07]
J
Hey, hey, hey. This makes a lot of sense, okay? Like, I've been to probably 20 money 2000-20s, and for them to hold that exclusivity, okay, this is an exclusive agreement. The way I read it, which very unique.
- [47:23]
A
And Wells Fargo CEO made that announcement on stage there, by the way.
- [47:27]
J
Yeah. And like I said, I think this is a big deal, okay? Even if. And if I were Solana, I would pay for the distribution also. People that are laughing at that. You should not laugh at that, dude. I would buy distribution all day long. Distribution is the problem. It is the problem. And it's a way for Western Union to remain relevant. Otherwise they're going to die, man.
- [47:52]
F
I agree with you, man. I think it's really smart by them.
- [47:54]
J
Totally, dude. And. And it's XRP up something fierce. This is what I, I told Garlinghouse, dude, don't announce partnerships. You can't secure. The exclusivity comment with Western Union and Salana is really magnificent because most of these deals that are announced at Money20 20 are deals. They're partnership deals. If somebody paid money and it's exclusive, this is going to like. They're putting real thought behind it. Whether it works or not, it's a different question. But they're going to give it time. They're not going to just break the contract. See, that's what I like paying for. You've basically bought exclusivity. You've got distribution and you've got some time to work with a host and make the distribution work. You got to build this out, man. It's not going to just go, you know, you're not going to just light up your iPhone and the whole world is able to do Solana on Western Union.
- [48:51]
A
You can do it on your Solana phone though, because they make that for some reason. Ryan, you had your hand up before. I saw. I don't know if we moved on, but they're flashing up and down you still.
- [49:04]
D
No. When we were talking about. I had been working over the past couple weeks on a trading bot and I had a bunch of different algorithms that I was working on and they had worked manually for me. When I back traded all the way back to 1-1-2024 and then January 1, 2022, it always came out to you would lose 99.99% of your balance within the next 10 months based on the back trading. And I said the best strategy possible would be just to buy and hold and not try to sell it. I did iterate on it and I did find a strategy that I would get about 25% over market, but it took a very long time. So like, yeah, buying and holding Bitcoin seems to be the best overall strategy unless you really get into the weeds with it.
- [49:54]
A
Yeah, obviously I'm an equity holder in a company called Arch Public and those guys are on my show every Tuesday. But I started running a pretty public and very quickly growing portfolio using their Algos and I set up a 12 algo system with them. But literally the entire point is just to buy bitcoin on red candles. But the rest of it is using Solana and Eth. It trades like 2% moves on the two of those to yield me more cash to buy more bitcoin on the dips. And it's absolutely a down.
- [50:28]
D
It's an accumulation strategy that's actually the only strategy I came up with working was just accumulate more bitcoin whenever you can. My strategy ended up being I'm not.
- [50:39]
A
Doing it to make money. It would not work.
- [50:41]
H
Like.
- [50:41]
A
Like you're saying that it's structured to get me more bitcoin at a better price with money I was going to buy bitcoin with anyways. So to be clear, I'm not saying that it's like trading all coins in a way that would be bitcoin. That's not the strategy. But, man, it's a lot of fun.
- [50:57]
C
Go ahead, back to your point about Money 2020. And you did a great job with the interview with Saylor, by the way. So if nobody's giving you flowers for that, you certainly deserve them. But you mentioned Devin McCarron. Did I get his name right? The CEO of Western Union, in his video, in the speech that you saw yesterday, I believe it was yesterday, Scott, that he said they spent 10 years working with other blockchain networks, XRP, and they said basically Solana was the best. So I thought that those comments right there from Devin yesterday really spoke a lot. And I don't know how my friends in the XRP community are doing today. Maybe we should check on them.
- [51:30]
A
They're always fine.
- [51:32]
C
They're always.
- [51:34]
A
If you, if you believe there's no evidence in the world that can change your belief, that's not exclusive to xrp, that's just humans. But, like, wasn't the whole narrative for XRP that it was going to be like incorporated into Swift, and then Swift made an announcement about other blockchains or something, and I literally just saw the post about how bullish it was for xrp. I don't know. What can you do, Andre? Go ahead.
- [52:00]
I
I just want to comment on the backtesting of bitcoin.
- [52:02]
H
Right.
- [52:02]
I
I think the reason why many are struggling with like, long, short strategies on bitcoin is you have this kind of return skew.
- [52:12]
E
Right.
- [52:13]
I
I think like 58% of all weeks are positive for Bitcoin while only 42 are negative. Right. I mean, in simple terms, it goes from like bottom left to upper right corner. Right. We all know that. So there's a drift in, in the performance. And so these accumulation strategies, they tend to work better than like long and short strategies. Right. That's why it makes sense to just buy the dip in instead of sell. Sell the rallies, sell the rips.
- [52:43]
A
Right? Yeah, yeah. I mean, listen, I'm just going to shill the podcast that Gary and I did that came out Sunday four Days ago, Gary, we sat down in person and had the same conversation where we just say, buy bitcoin over and over and over again and then people buy Trump coin instead. But Gary, I mean, maybe give us the 3 minute TLDR on the bitcoin as a business view that we discussed, because you really, even in all the conversations you've had, and we've had a lot of them, you kind of really changed my mental modeling.
- [53:16]
J
Yeah, well, so all I've ever done is build businesses. And they take somewhere between, if you're lucky, 6 years and 12 years, and then by the time you build a business and you brag about not taking any debt, not not having any shareholders, you know, if you have a partner, he or she may want to get out at half a billion dollars or maybe they don't want to get out. And then you have, you have the investment bankers, you get chewed up at the end. So I look at bitcoin and go, gosh. And this is what Scott said to me. I said, look, bitcoin's a business for me, right? I buy bitcoin and I don't waste money and time and energy focused on other businesses. Right now, I am simply buying Bitcoin. It is my business. And he said, well, you need some yield, don't you? And I said, well, why would I need yield? Because no other business that I've ever built in my life paid me a salary, much less positive earnings. I have to build the business for four or five years and then it starts generating earnings. Unfortunately, I'm not Netflix who can just get a bunch of free money and then sell crap to the whole world and generate revenue out of thin air. I don't do that. So I have to create a product. I have to hire people, I have to hire a lawyer. I have to put an LLC together, I get K1s, I have employees. I then have an HR department. If I'm successful, successful. I have 150 people of which I can't manage. After 150 people, after 15 people, I'm pretty done. But 150 people is impossible to manage. And yet I have a business called Bitcoin that's going up. Let's just say it's going up 8% a year. 8% to fund my own business. I will be richer than my twin brother because I am buying bitcoin. I have no partners. I didn't use debt. I'm using cash or I use my own debt. I'm not making any fees and no one can Push me out of my position. I am literally buying into a monopoly and I have no DOJ exposure. I have no paperwork to do. I have no lawyers, dude, like Scott said, hey, you want to fly to Vegas and go to Monday 2020? I'm like, yeah, I'd love to, dude, but I'm not going to spend. I'd rather buy bitcoin now. He thinks that's odd. But dude, my core business is buying bitcoin right now. It's not going to trade shows. So. So this is the way for me to keep investing in it.
- [56:00]
A
Right.
- [56:00]
J
Like, I just think it's a great business, man. No bosses. Everybody in the world says they want to own their own business. Here you go.
- [56:09]
A
Dude, I literally had nobody. Yeah, but I had nobody.
- [56:14]
I
Yeah, bitcoin's the new hurdle rate, right?
- [56:16]
J
That's what I say, you know, millions of dollars, man. But I've had thousands of headaches. Thousands of headaches. Thousands. And I don't have headaches when I'm doing my private equity deal with bitcoin. So that's my pitch on it. If it's good for Sailor, it's got to be good for an individual family.
- [56:36]
A
Family. Yeah. Well, I mean, I totally support your idea of not spending money to go to Vegas with me, but also, can you really put a monetary price on playing double down blackjack and not even knowing the rules of the game? Heavy. At a table with me at 3 o' clock in the morning? Because I don't think there's a price for that. And that's what we didn't make. Hey, hey.
- [56:59]
J
I priced it yesterday. I didn't go well.
- [57:02]
A
I'll tell you this. I. The. And I know we need to wrap here. That the. I didn't really do much in Vegas besides work because I was doing my 6am shows. But I hit the jet lag the second day a little bit. I woke up at 3:30 to like a, you know, some text for my daughter and I couldn't go back to sleep. So I went down to the casino like a real degenerate by myself with a cup of coffee and played craps for like 30 minutes solo at the table. And it was like the most. I should have had cameras on me. There should have been. It should have been like the hangover and it was just me and it was like the most epic role of my life. I paid for our next five or I paid for like our next seven trips to Vegas. So.
- [57:42]
J
No, that is awesome.
- [57:44]
A
And it was just love. Do you know how you're playing if but by yourself. There's nobody betting, there's no pause. It's just like, I mean, I was throwing the dice behind my head, like under my legs, you know, around the back. Just me, nobody there, just me. Weird, strange, but you know, can you imagine, Gary, if you had flown out what we could have pulled off at.
- [58:08]
J
3:30 in the morning, dude, that have been awesome.
- [58:11]
A
Would have been a good time. All right, guys, it's 11:17. We're two minutes over time. Oh, Mark, you have your hand up. I'll let you go, man. What's up?
- [58:18]
E
No.
- [58:18]
G
All right. I was just gonna say some echo chambers are worth the squeeze. Gary, going through the hundreds of millions and thousands of headaches that give and take is huge. And from a portfolio management standpoint, when I used to look at different portfolio managers as the head of risk, the people got in the most trouble were the people who had the biggest, most complex grossed up books and they tried to squeeze out a little net exposure by building up these Babel towers of Babel. And bitcoin keeps it simple. And that was the best portfolio. A clean, simple, liquid portfolio, persevered. So that's the analogy. Love hearing it. Thanks, my brother.
- [59:05]
A
Yeah, Gary really had me, had had me in mental gymnastics with that one because it's just so easy. It's so easy. But if you can mentally model it as a business rather than just an investment, it even I think increases the conviction and makes it that much more clear. So Gary, like I said, man, we need like, you need like a slide deck. And I know you don't want to like go places and see people and do things because bitcoin is your business, but man, I wish you could go on a road show with that speech because. Really good, really good. So maybe we'll just have to steal it or keep doing it on Crypto Town hall. Right, everybody, it was a great show today. Thank you to all of our guests, even those who couldn't hear each other. And we will be back tomorrow for yet another Crypto Town Hall. 10:15am See you guys there. Thanks.