← The Wolf Of All Streets
The Wolf Of All Streets
Crypto Market Rebound & Big Day For Bitcoin | Here Is What Comes Next!
00:56:03
Crypto Market Rebound & Big Day For Bitcoin | Here Is What Comes Next!
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- [00:01]
Scott Melker
Crypto markets are bouncing all over the place. If you watch Macro Monday, you know that this was arguably the worst weekend in history for liquidations in the crypto market, but not necessarily in bitcoin, of course. After bottoming, bitcoin bounced all the way back up to 102,000 now settled right around 99,000 because China tariffs. We saw the Mexico and Canada tariffs basically canceled or renegotiated before they even happened. What will happen with China? Are we going to tariff the moon? I have no idea what is going on, but it's making for a lot of volatility and fun in the crypto market where we of course have a huge press conference this afternoon from David Sacks, the AI and crypto czar about America's leading role in the world of digital assets. There's so much to talk about. I'm glad that I have Matt Hogan for Bitwise here alongside Andrew Tillman from Arch Public. Let's go, let's go.
- [01:11]
Matt Hogan
Let'S go.
- [01:12]
Scott Melker
What is up, everybody? I'm Scott Melker, also known as the Wolf of all streets. Before we get started, please subscribe to the channel and hit that like button. Guys, I know you can see here it's too bad I'm still suffering from tds. I've got medication here. I going to be cured. It's going to be fine. It's going to be fine. I don't have tds. I literally tweeted yesterday that it was a strong arm tactic, had nothing to do with fentanyl. We talked about it to death here and that the tariffs would be canceled before they even started and it happened. I'm an expert in tariffs now just like everybody else on X. I've got some other experts here probably on tariffs, infectious diseases, politics, crypto markets. We're all experts on everything now.
- [01:55]
Matt Hogan
Well, we, I believe we sent Matt to the UK as part of our tariffs against the uk. I, I, I think that's what's happened. We sent Matt. Here's your tariff deal with him for the next 30 days. I think that's what we've done.
- [02:08]
Andrew Tillman
On the theme of everybody's an expert, I'm looking at an article this morning that says expert day trader buys $1 million of XRP in the dip. And they're talking about Dave Pointo. I don't know when he became later.
- [02:24]
Scott Melker
But following, you got a show and a following. You're officially an expert. That's how it works. For those who are doubting me, I even did it with a meme. Guys, look, I Did it with a meme. This was yesterday. It would be hilarious if Trump lifts the tariffs today after speaking with Mexico and Canada sends crypto back to Valhalla. I did the Pepe meme with the thing, so, you know, it's serious. But yeah, guys. So this was obviously like a strong arm negotiation tactic, but it leaves us, you know, now wondering what will happen with tariffs on China, which it looks like are largely symbolic because it's on a. We've tariffed them on a bunch of stuff we don't need, and they've tariffed us back on a bunch of stuff they don't need. I mean, Matt, this is all just distraction, right? I mean, we're going to dig into obviously what's happening in this market. These are distractions for crypto.
- [03:07]
David Sacks
It is all just distractions. Yeah, that's. That's my base case. For what it's worth, if tariffing me into the UK was what it took to get Bitcoin back to 100k, I think that's a good, good deal. I'll do that for the people. Yeah, I think it's a distraction. I mean, my view, Scott, you know this, my view is that macro doesn't really matter, that crypto investors are fighting the last war. The last war was fought over macro. And what matters now is this press conference. What matters now is institutional adoption. We see these low liquidity moves over the weekend, you know, to fade them long term. And I think that's what we're seeing here. So, yeah, I think, I think the Canada tariffs didn't matter. The Mexico tariffs didn't matter. I think the China tariffs don't matter. If anything, they're a long term catalyst. That's sort of the gut view here at Bitwise is that these will ultimately be a long term catalyst, but the story is about what's happening in crypto. I really think macro is the last war.
- [04:01]
Scott Melker
How much does this matter? President Donald J. Trump orders plan for United States Sovereign Wealth Fund. You could see Lutnick was standing on his left. You could see advice sent on the right. Everyone always seems so uncomfortable speaking when they're standing next to him. I love it. It must be so intimidating. I mean, Letnick, these are like the most powerful men in the world. And they're like, and we will do this for you, Mr. President, like @ the end of every single. It's unbelievable, right? But United States Sovereign Wealth Fund, this seems like a very big change in our operating procedure here.
- [04:34]
Matt Hogan
I don't think it's any surprise that there's that announcement that's quickly followed up by David Sachs at 2:30 today. I think that was part of a, a plan and, and, and part of something that they thought that they do and, and fairly telegraph that that that's going to happen and there's going to be a conversation and there'll be a few more details about what the idea of a sovereign wealth fund is going to be. That will probably be part of the conversation today. And it's a massive deal. It's a big deal, right? I mean take a look at what sovereign wealth funds do across the globe. Sovereign wealth funds are effectively set up to make strategic investments when they're needed. And so you know, it's, it's, it's what a, it is hard to quantify from a communication standpoint what a sea change we've seen in a month. I mean it's, it's, it's radical. It's really something like I said, I just, just said it's hard to communicate what a radical change that we've seen.
- [05:44]
Scott Melker
This is so that we can buy TikTok or own TikTok. I'm just telling you, right? I mean, because like imagine if the United States government can buy a, you know, potentially trillion dollar company at an extreme forced discount and that taxpayers or the government actually gets the benefit from that. But this could also, Matt, I mean, couldn't this be a very creative way to add Bitcoin and I don't know, maybe Ethereum without having to go through the whole strategic reserve process. And let me show you guys a tweet from yesterday, this from my newsletter, but Eric Trump, in my opinion, it's a good time to add eth. You can thank me later, guys. He removed the you can thank me later part and edited the tweet as though remove that conveniently. Maybe the lawyers had something to do with bags. But Matt, I mean if Andrew's right that this is aligning with Sachs, I mean, sovereign wealth fund, you got this.
- [06:41]
David Sacks
Kid tweeting, it's, it's absolutely stunning. And you find yourself thinking it can't possibly be that he's so obviously tipping what's happening. And then you step back and say of course, of course, that's exactly what it could be.
- [06:54]
Matt Hogan
Right?
- [06:54]
David Sacks
The Overton window of possibility is so much wider than we are used to. There was the other tweet from Lummis which you probably saw. This is a big deal with the bitcoin. Bitcoin.
- [07:05]
Scott Melker
B, she, she trolled us. Well, she blew it last time. But yeah, I'll give her credit on this one.
- [07:11]
David Sacks
I, I, you know, I agree. I just think, yeah, the scale of what is happening is, is so significant. The sovereign wealth fund is so significant. Sachs's press conference is so significant. It'll probably be slower than crypto Twitter wants. But I am shocked that the market hasn't reacted more to it than what we've seen, to be honest. I think the market is, is, hasn't recalibrated to what a big deal this is and how big the shift is.
- [07:40]
Matt Hogan
Not to hijack the show, Scott, but.
- [07:42]
Scott Melker
Hijack away, my friend.
- [07:44]
Matt Hogan
Let's talk, let's talk about the sea change here because we've got, you know, the CIO of bitwise, haven't you guys gone from like a billion and a half in AUM to 12 plus billion in what, 18 months? 12 months, whatever the number is. A really short amount of time, right?
- [08:00]
David Sacks
Yep. Yeah, about, about 14 months. A complete sea change. I'll give you another one on the sea change front. We worked seven years on a bitcoin etf, finally got it approved, you know, bleeding through our eyeballs. And then last week I found out on Twitter that they had approved our 19 before for a Bitcoin ETF. You know that that's not usually the way it happens. They're not just like yellow shipping.
- [08:26]
Scott Melker
Yes, that's where I found out I was a scammer.
- [08:29]
Matt Hogan
Exactly, exactly.
- [08:30]
David Sacks
And, and an ETH guy, I believe.
- [08:33]
Scott Melker
Oh, today I was told I was an eighth guy.
- [08:36]
David Sacks
Yeah, but I mean that it is such a game change. Yeah. One to $12 billion impossible to faster than even bitwise anticipates. Yeah, it's, it's, it's completely different.
- [08:50]
Scott Melker
So what is that fun? Yeah, go ahead, tell me please.
- [08:53]
Andrew Tillman
I, I would just echo the same thing I, I would say though, the thing that continues to surprise me, when he made this announcement and David is going to speak afterwards, I thought again he would have mentioned bitcoin. And I'm waiting for that moment where he does and he, he continues to avoid it. And I think it's purposeful. I think that at this point he's not going to show all of his cards and the things that he did announce are, are so logic based and so needed and like you said, I mean, TikTok is kind of the worst example of the bunch. But that example holds true across the board that this could be used as a way to strategically, you know, acquire value when taxpayer dollars are being poured into a specific industry.
- [09:41]
Scott Melker
Imagine Tillman, if every company that had been subsidized by the United States government in the past. The United States government held an equity staking.
- [09:50]
Andrew Tillman
It's a no brainer, right? They become, they, it, it's good for everybody and it's a much better system than what we have now, which, you know, it's progress and, and not perfection. Right. We've just got to move forward and find better ways to do things than we're when, than we're currently doing them.
- [10:08]
Scott Melker
So obviously we had this kind of major speaking of Ethereum because I'm so passionate about it.
- [10:16]
David Sacks
Nice hats, guy.
- [10:18]
Scott Melker
I wore my wrong hat for my ETH maxi days. Sorry. US Ether ETFs hit record volume as Trump tariffs rattle market. So obviously this wasn't necessarily the kind of volume we wanted to see. But what was happening. The ETFs did echo what was happening this weekend in markets. We had this sort of crazy scenario with Ethereum that I've been trying to dig into, but it seems like Coinbase went down as usual. Market makers panicked and pulled some of the liquidity and that caused everyone to panic everywhere. So ETH got disproportionately basically wrecked.
- [10:47]
Matt Hogan
Who approved that headline by the way? Pull that headline back up. So US Ether ETFs hit record volume as Trump tariffs rattle market. That's like, you know, that's the most antiquated headline I've ever seen. So the markets are terrible, but ETFs are hitting record volume. Like what, what are we talking about here? It's, listen, we just talked about the fact that, that, you know, bitwise has gone from 1 to 12 plus billion inside of 14 months. If, if you're reasonably good at math, that's nearly a billion dollars a month. So of course Ether ETFs are hitting volume records all the time. And that's going to continue. The more that Scott talks about is Eth Maxi commitment. There's going to be continued flows.
- [11:30]
Scott Melker
I'm going to pump my E Max so hard I can move the price of ETH with a single.
- [11:36]
Matt Hogan
Right. I'd love to hear Matt's thoughts on, you know, the first, let's call it 90 days of the ETFs and the last, the, the, the previous, you know, the 90 days that we've just gone through. I would imagine there's been a massive sea change there.
- [11:54]
David Sacks
Yeah, there's been a sea change. I think it started to change. I mean it's worth noting for the first 90 days the, the, the numbers that are quoted are wrong because there was A lot of short term trading in E that rotated out much more even than in GBTC on a proportional basis. So you see these reports that there were net outflows. I don't think that's true, but it is true that the inflows really accelerated at the end of the year. And I'll say, like, you know, we go around and do meetings. It's not every meeting that wants to talk about ETH ETFs, but about one in three really do. And I think people are underselling how quickly ETH will resonate with the institutional community. The institutional community that's coming into ETH doesn't share the baggage of the crypto native ETH community. Right. They're not in this dungeon of despair worrying about blob fees and L2 cannibalization and Solana's eating my lunch. And what about Monad and what about bera? They're like, oh, this is an asset that's useful, let's buy it. That's their view. And so I think the ETH ETF inflows are going to surprise to the upside. It's probably going to be one of the things that helps ETH shake its funk, if it does shake its funk over the next few months.
- [13:14]
Scott Melker
I would also imagine that if Purse is true to her word, or at least her predictions, that getting staking in the ETH etf, although those yields aren't particularly that high, would make it more attractive. And maybe you can also talk about the potential of having in kind redemption for the Bitcoin spot ETFs and a conversion there. Would those be new products, by the way, or it would just be a conversion within the existing ones?
- [13:38]
David Sacks
I think in kind is probably a conversion and staking is to be determined. Certainly the industry wants staking to be added on, but there is some complexity on that. I also think that's the order of operations. I think in kind is easy, right? Virtually every ETF uses In Kind creations and redemptions. It was blocked at the sec, as we've discussed, Scott, by one person there who didn't want it to happen. And I think, yeah, exactly. And I think that's changed. Staking is going to take longer and be more complex. My guess is that crypto Twitter's view of in kind is too bearish and its view of staking is too bullish. One will happen faster than expect, one will happen slower than it will expect, but we're going to get there eventually. But from a. From an institutional perspective, the E story is really Simple. It's tokenization, stable coins, agentic AI. All of that's taking play on, on eth. I should buy some. It's really that simple. I think crypto Twitter ties itself in knots on ETH and, and is going to take longer to figure it out.
- [14:43]
Scott Melker
Yeah, I agree with all that, but I think that we do see this sort of clear split in the market right now. Right. I mean, bitcoin Yesterday had an $11,400 candle spread or something. Right. I mean, I think it started the day at 97, went down to the mid 91s, and ended up back up at 102, and now we're sitting at 98. So, I mean, yeah, you had like, you know, 9, 8%, 10% volatility within that candle while altcoins were down 35%.
- [15:14]
David Sacks
Brutal. You know, I think one thing that's really changed over the last six months is there are now value buyers in Bitcoin. I think for the first time in its history, right, we used to get 10% down moves, and everyone would enter exponential despair. Right. We're going to zero. Cue the obits. Let's crawl in a dark cave. Now. For the first time ever, we have value buyers who come in, but those value buyers don't exist anywhere else. They don't exist in eth. Yeah, they don't exist. Even though it had a ridiculous balance in xrp, they don't exist in, in, in other assets. It's really only in bitcoin. But they're very strong. I don't think they're going to let it drop significantly. They're just waiting to pounce.
- [15:54]
Andrew Tillman
That's. I, that's a key point. I, I think I've been watching the bitcoin dominance number this cycle closer than I ever have because it's different than it ever has been. And I think it's gonna only get wider, to be honest with you. I think we're seeing a massive consolidation of all of the fringe product projects. And you're gonna see ETH grow because it's being endorsed by Wall street, in my opinion. And I think the new you. You know how powerful it is when a meme coin gets listed on a big exchange. I think we're seeing the new era of the endorsed coins, or the endorsed projects are going to be the ones that have ETFs and have financial backing from Wall street. And the ones that don't are going to be looked as kind of incubator projects that haven't made it to the finish line yet. And until we cycle through all of the wealth that's been accumulated across a lot of the junk product projects that we see into kind of East Bitcoin Salana, like the big, the big ones, you know, we, we're going to continue to see an upward trend on those major projects. I, I personally think, and I think that top 10 list is going to finally be solidified kind of in a, in a more concrete manner than it has in the past. I think in the past it's just fluctuated and you've had a kind of a mixed bag of, of which projects at what market cap. And I think, you know, the market is choosing clear winners now for specific purposes. And it's based upon liquidity they can put to. Towards that purpose. Right?
- [17:31]
David Sacks
Yeah.
- [17:32]
Scott Melker
Every single sizable dip we've seen on a news event for the past few months on bitcoin has ended up with a huge long wick down immediate demand and all the selling being bought back up. Every single one. You know, and so that's not the case on most altcoins. But Matt, is there just enough liquidity in altcoins now that people don't have to sell their bitcoin, they can just sell a bunch of altcoins when they're panicking? Looks like that's what happened.
- [17:57]
David Sacks
That's an interesting idea. That may be true. And also they're playing the beta game right when they want to get out of it. Like, why not, why not focus on that? But I think you're going to continue to see there's just a raft of people who need to allocate to bitcoin and they're going to take every dip as an opportunity to do that. And I don't think that's true in the altcoin space. You know, right now. I also think altcoins have made this sort of Faustian bargain with the world about monetizing and talking about revenue and talking about flows, and now they're getting measured against that. And that's just a very difficult game. So I think bitcoin gets bought on every balance. I'm not sure altcoins do. And I agree with Tillman. I think we're going to see a real separation. I like the listing analogy. I think that's a good throwback to the old days when listing was such a big deal. And I think that's the equivalent of what we have today.
- [18:48]
Scott Melker
Well then let me ask. So we're in this new regulatory regime you guys are applying for Doge ETFs, right? Salon ETFs. XRP, ETFs, everything being filed for. I mean, we giggle, but it's happening, right? See, I'm here for it. Will that help choose winners in the altcoin market? If those start to be approved, can they basically like sort of jump the creek from being bucketed with all altcoins to more serious institutional investments that get these sort of passive flows? You expect these products to be big.
- [19:23]
David Sacks
Yeah, definitely. I mean, you just think about the capital that can access the market, right? If there are not ETPs, you can't tap into the tens of trillions of dollars that needs to access that market. Think about the net new buyers of Bitcoin. Last year was essentially corporations and ETFs. Those were the net new buyers. And if you don't have an ETF listed, you won't be able to access that. That's why all the foundations out there are reaching out to ETF issuers and trying to figure out a way to support them moving into launching various ETFs. That's why you're seeing so many filings. We'll have to see when it happens. Until it does. For what it's worth to get to Tillman's point, there's a sort of regulatory moat around Bitcoin and ethics that should be supportive for them over time and should be different from what we see in these other assets.
- [20:13]
Matt Hogan
The we can laugh at, you know, for example, a DOGE etf. But the reality is, you know, that that's a. To, to quote one of Matt's colleagues, Jeff, you know, it's the gamification of markets, right? As a reminder, you know, the most traded ETF in the world last year was a 2X Nvidia, you know, ETF. That's gamification of the markets. Sure, Nvidia is the underlying asset for that particular etf. But a DOGE ETF would effectively be a proxy for all altcoins associated with crypto markets. Right? So not functionally all that different in terms of the why and the how of why that particular unit would be traded. So funny or not, it's also a reality. And it's also a reality associated with how markets are traded these days. And ETFs are the end all be all when it comes to trading and assets that move in the markets these days. And oh, by the way, we're going to get to a space in two to three years where all this is happening 24 hours a day anyways, right? So that's further gamification of the markets. That's further access to constant price action in the markets. Heaven forbid we take a look at, you know, S P and NASDAQ futures charts on, on, on Sunday afternoon and evening and what the difference was in the gamification of those gaps between when it opened and, and when we opened on Monday. So, you know, we're headed in that direction. And a month ago I, I was of the opinion that, you know, a Doge ETF is just peak stupidity. But I adjusted no Trump token and I adjusted the thought process there because, you know, reading some stuff frankly from Bitwise, that makes sense. And a correlation between a 2x this or a 3x this or a 2x short, this, that or the other. The gamification is already here. That bridge has been passed. It's just a question of to what level will crypto ETFs participate. And they absolutely will participate.
- [22:30]
Scott Melker
By the way, this broke yesterday. To your point, CBOE plans to extend equities trading to 24 hours amid global demand. When you were talking about it, I just remembered that I saw that at some point after our shows yesterday. I'm not saying it'll get approved or what's going to happen, but I mean, whether it's tokenized or not, there's demand for these markets to always be open.
- [22:52]
David Sacks
It's, it's, of course it's going to happen long term.
- [22:55]
Scott Melker
I mean, what.
- [22:55]
David Sacks
One interesting thing about this market move, to a degree I haven't seen before, is every media story written this weekend about the market move referenced what happened in the bitcoin market because it's become sort of a primary macro trading tool. It's really a sort of signal of its, its maturation. Two years ago that wasn't true. Right. The, the 4:15 press release on Friday is designed to give the world two days to think about it before it reacts on Monday. But I think those days are over. So I think what CBOE is doing is right. I think it's just a matter of time before everyone else in the financial world loses their nights and weekends like we have.
- [23:37]
Scott Melker
There's going to be a lot of pushback from guys who want to be in the Hamptons on the weekend. I mean, Tillman, though, this would effectively mean people didn't have to sell off their bitcoin and crypto on a weekend. Right. Like we have this big. Our biggest strength is our biggest problem right now. I think we all know 24 7, 365 means when you're panicking on Saturday at 4am you need to find Something to sell. It can't be your, your, you know, the, the mutual funds in your, in your retirement account.
- [24:07]
Andrew Tillman
It's choose which monster you want to face. Right. If you don't do that, you're going to ultimately see a separation in price between Bitcoin ETFs and spot Bitcoin because the volatility is so high. And so you've got to mature the markets in a positive direction, which instant settlement allows you to have markets open 24 7. I do think everything will be tokenized. Bitcoin is going to be, to Matt's point, kind of the shining star, the North Star in, in the entire market. And the people that are coming to the table now, they like diversification. They're not, to Matt's point earlier, they're not judging eth on the baggage that we know eth has carried through the last, you know, 10 years.
- [24:51]
Scott Melker
Development have baggage.
- [24:54]
Andrew Tillman
Neither does Solana. But, but, but the point is, is like they want more horses to, to buy at the track. This is a new track. It'd be like you as a business starting to take Visa for the first time. Well, what does that do for your business? Well, it allows you to take online payments. It allows more people who don't have cash in their monthly budget to finance your services until next month's paycheck. Like it opens up the top line growth considerably for your business. And the productization out to Andrew's point, you know, he says gamification, I would add the productization of those games are really what people are after. If you look at the meme coin craze, no one has any loyalty to the memes. It's like the NCAA football, you know, landscape now. Everyone's just shuffling the deck based upon how much money they can make in the mom at the current time. And so, you know, we're going to see that continue to develop. Why? Because market makers like to serve clients and, and traders. And the more you are able to serve, the wider the, the funnel is on the top end. The more money you make in transactional fees and the more capital you manage. And that's, that's ultimately what the market is. So I think it's an inevitable force and I do think the instant settlement of, of blockchain technology, whatever backbone you want to use to delegate it. I think that, you know, instant settlement allows the markets to very easily stay open 2477 and give people exactly what they want and, and globalize that productization. Right. So that everybody at, and every portion of the globe can play at the same time that, that, that's a huge market.
- [26:40]
Scott Melker
That's. But I was told that Meme coins were collectibles that were passionately collected by deep rooted communities that care. Like, you know, it's like NFTs, they're, they're not.
- [26:51]
Andrew Tillman
I love the shakeouts because it's giving me a prime teaching lessons for my kids and my son not to join.
- [26:58]
Scott Melker
The fart coin and butthole communities.
- [27:02]
Andrew Tillman
But listen, it's an addiction and I, I will tell you this, say what you will, but Meme coins do onboard new crypto users, 100% do. And the more real world brands and real world personalities adopt them in their ecosystem, the more it's going to bring, you know, new users to the table. And the education and the journey that we're seeing, even Wall street go through right now, we, we went through a long time ago. It's fun, it's, it's nice to see the naivety, the naivety come to the table and get fleshed out at your point. Much, much faster.
- [27:40]
Scott Melker
Yeah, I mean, you get wrecked. We used to take like a year of a cycle to get wrecked. Become passion. Takes 30 seconds now to get your first dose and then you can either leave or you try to move on. You know?
- [27:53]
Andrew Tillman
Exactly.
- [27:53]
Scott Melker
I mean, listen, I don't not pick on Trump Coin memes are destroyed. It probably has outperformed most memes, but like Trump to Melania was about as fast of a, like, flip for your average retail person trying to catch up as you could ever see.
- [28:09]
Andrew Tillman
I thought a lot about that because it's bothered me, because it doesn't, it looks like it seems like a tactical error. And so you question it wasn't a tactical error or was it a signal? And I'm, I'm leaning towards a signal. I think Trump is all gas, no brakes on everything. I don't think there's anything, I don't think, I don't think there is a stop button that he's looking at in terms of innovation. And so to him, he doesn't care about the Trump token and he doesn't care about the Milana token. So he's like, yeah, do both of them, do five more behind it and 10 more in every variety. Let's get as many ice cream flavors in the ice cream shop as we can develop. That's, that's what his mentality looks like to me from, from way over here.
- [28:53]
Scott Melker
Doesn't that mean that we're going to need very clear regulation and legislation to support all of that? At some point. I mean, we have Scaramucci saying he thinks pro crypto regulation likely by November. I think a lot of people are looking sooner than that.
- [29:07]
Matt Hogan
That's a really big watch on his wrist, by the way.
- [29:11]
Scott Melker
I think it's an Apple watch. It's either a Garmin or something.
- [29:15]
Matt Hogan
It's digital, really big digital assets almost. I love it.
- [29:20]
David Sacks
Physical nft. I was just at a conference with Mooch yesterday. He's a very good, very good panelist. I think we're going to get that regulation sooner rather than later. It's worth noting the regulation is what created Meme Coins. Meme coins were the only thing you could launch if you're not like, like, you know, okay, it's terrible to build a useful product that has a real token economic value, that delivers value to the token holder. But if you want to launch a Meme Coin, go have as much fun as you want. That's the regulatory regime we were under. So I think that'll get, I think that'll get cleaned up. I think this space will get cleaned up. I don't think Meme coins are going anywhere, but I don't think we'll see quite the wild, wild west that we've seen recently. I think there'll be insider disclosures and those sorts of things. So enjoy the, enjoy the casino while it, while it lasts.
- [30:11]
Scott Melker
It's a hell of a casino.
- [30:13]
Matt Hogan
A point that I made, a point that I made, I don't know, a couple weeks ago on this show and I'll make it again because I think they are somehow in some way connected. You know, there are different flows nowadays to capital than there were five to 10 years ago. Right? So 10 years ago we had a very, very robust IP IPO market. Right. 20 years ago it was even more robust than that. You know, you go back to the, the Internet craze and everybody was IPOing. Those IPOs don't look all that different than Meme coins from about nine months ago. So the shift in capital and how capital is used in, in the way that the structures work is a function of the fact that that old IPO structure barely exists and is now defunct. Right? So three to five years ago there was a shift away from traditional IPO structures to direct listings. Right now even direct listings are almost non existent. So where does that capital go? Where do people go to somehow get the inside scoop on something before it takes off? That all happens in the crypto market.
- [31:23]
Andrew Tillman
Where do they find their Hopium dealer.
- [31:24]
Matt Hogan
Is what you're saying?
- [31:27]
Andrew Tillman
You Got to know where to go get by the hope.
- [31:30]
Matt Hogan
And there's at least an assumption, there's at least an assumption in the crypto space that you know, yeah, you could get rugged quick. But at least I know that. At least I kind of understand the rules of the road as opposed to a bunch of people got Facebook pre IPO only because they're rich and they've been clients at Morgan Stanley for 25 years. And then on the day that it was launched, Morgan Stanley and a couple of the other market makers would not let it go under 35. That felt sounded like a rigged game. Even though crypto there might be some 19 year old kid hitting on pumped up fun, you know, rug, the rug button, at least I know that exists.
- [32:17]
Scott Melker
Right. I was just gonna say literally, I think as much as it's like rug pulls are horrible, scams are horrible, whatever, 99, I would say percent of the people experiencing that are crypto natives who are 100 aware that that's a possibility every time they hit the buy button.
- [32:33]
Andrew Tillman
Well, they know it's a game of musical chairs. They're just trying to get out, you know, quicker than everybody else. And I will say there's, I think there's a hot button issue here that's going to become a big white elephant in the room as it relates to regulators. Because I think we'd all be shocked if we found out how many 15 year old kids are using this technology and playing this game. And you know, do you let them continue? Do you can, how do you prove proof of age before you set up these? Because right now I, you know, if you go on YouTube you can see lot of, you know, 15, 13 to 18 year old kids that are completely obsessed with this market. And I think it's because it's, it's a value proposition. They understand. I can put $500 in increments of $50 into this token and it's like buying a lottery ticket. I literally may print 10k in a week. And for them 10k is, is like winning a, you know, a million dollars. So the value proposition of partying with their, you know, mowing the lawn money is a value proposition that's appealing to them. And I think that that's driving the undertone of these markets. And if you get on the forums and you look, I think that you'd be shocked and I think we'd all be shocked at what that percentage really is. So the markets are, you know, technology is tearing down walls that traditionally keep access at bay. And the question Is is how do we control this now? Wide open access that pretty much anyone can garner through an iPhone.
- [34:05]
Scott Melker
I didn't even think about that. I mean there's no doorman like checking id, right.
- [34:10]
David Sacks
It's, it's amazing. Although I do, I do agree with Andrew that like the community based disclosure, the understanding that's an adversarial environment with rugs is probably better than traditional, you know, hundred page prospectuses. I spent a few weekends ago writing a hundred thousand word prospectus that I will be the only human that ever reads.
- [34:30]
Matt Hogan
That's right.
- [34:31]
David Sacks
Right. But it's out there. And you know, it's worth noting to what you said about Facebook. We're only 25 years removed from Reg FD which was literally an SEC rule. Stands for fair disclosure that they put in place because before that companies could tip off insiders. It was actually totally fine. Right. So like you know, these, these regulations always evolve. I mean it's pretty crazy.
- [34:54]
Scott Melker
I mean bitcoin's trading back above 100,000. But right now. Okay, you can continue that conversation. I was just going to point out that like the market opened 9:30 and Bitcoin bounced from 90.
- [35:03]
Matt Hogan
Yeah, 100k just like that.
- [35:05]
Scott Melker
ETFs buying back up whatever their customers yesterday.
- [35:09]
David Sacks
People want to get in ahead of the press conference. You know, I'm honestly surprised we didn't go higher. I thought we might have broken loose from this one hundred thousand dollar gravity.
- [35:18]
Scott Melker
I mean maybe it's just because we had to start from such a lower point this weekend because of all the tariff nonsense like this. It's one of those things where like if bitcoin had just kind of been trading at 100 all weekend and you had gotten this catalyst, we'd probably be at 106.
- [35:31]
David Sacks
Yeah, probably right.
- [35:33]
Scott Melker
But I mean the demand is just crazy to me. Like this thing gets bought up when markets open every day. Is that like Matt, are the mechanics of it that if I go in my, you know, account and buy BITB at 4pm on Monday, does bitwise have to go buy bitcoin on, on Tuesday? Or do you, is there like a mechanic to do that? Right when it happens?
- [35:55]
David Sacks
The, the way it works is we take orders from the APS at up to 2pm so any open market activity that takes place before 2pm that's what they decide to create. And that's when we get you know, 10 million, 100 million, $200 million of cash depending on how much buying you did. If you do buying after that, it gets effectively rolled into the next day is more or less how it works.
- [36:19]
Scott Melker
So it makes a lot of sense that we see movement kind of around market open or mornings on these things. Because it's yesterday's bottom size.
- [36:26]
David Sacks
That, that, yeah, that's, that's a big piece of it. And different issuers do different things. But 2pm is fairly standard.
- [36:33]
Matt Hogan
Listen, there's a, there's a big percentage of people are going to hate what I say next. And they're, they're mostly Bitcoin, literally every.
- [36:39]
Scott Melker
Time you open your mouth.
- [36:40]
Matt Hogan
Yeah, right, that's true. But Bitcoin has become a traditional financial asset, guys. I mean that, that look at the, look at the price movement. I mean at 9:30 we open up and, and we gap higher to the tune of a thousand bucks. Immediately on top of that you have, you know, Larry Fink talking about bitcoin all the time.
- [37:03]
David Sacks
Right.
- [37:03]
Matt Hogan
I mean literally talking about it all the time, connecting it to the scale and the growth potential of mortgage markets. Actually talking about price targets of 500k to 700k. There's no more traditional financial markets guy than think. Yeah, and, and they won't shut up about it, right? They literally won't shut up about it. So it's a, it's a sea change.
- [37:27]
Andrew Tillman
It's a, it's a hack for them though to connect the global markets. Right. They've never been able to do this across exchange barriers. And so this is, this is the, the final frontier for them. This is the biggest arena that you could build. And I equate it to like Las Vegas hasn't been built yet. We all know what Las Vegas looks like now. Right now the market that we're playing in that we're so excited about is like the gas station right across the Nevada line that you go in that has like 14 or 15 machines in the back. Yeah, they're like 10 year old machine. Like we haven't seen the glory of Las Vegas yet, of Bitcoin City. And Bitcoin is leading the way to Andrew's point. It's been adopted as a traditional finance instrument and it's now got the levers and the pulleys and the buttons that make it useful as a hedge against everything that's denominated in dollars, which is.
- [38:31]
Scott Melker
Bitcoin is all of Las Vegas. Solana is the individual casinos.
- [38:36]
Andrew Tillman
Solana's Reno's Reno.
- [38:39]
Scott Melker
I finally have my analogy or good.
- [38:42]
David Sacks
Luck on Twitter, gentleman. I would just note. I, I think that's right, but I think you haven't seen anything yet. Right. I mean, we just repealed SAB121Y, which people talk about. But what that. What that bulletin said was, this thing is so toxic that if you're a bank and you touch it, you'll die.
- [39:03]
Matt Hogan
Right?
- [39:03]
David Sacks
That was the gist of what sap121 said. And now they've said, actually, have at it. Knock yourself out. And so, yes, Larry Fink is talking about it, and yes, they're Wall street analysts writing on it, but it's an exponential curve, right? You won't recognize what it looks like in a year from now in terms of traditional finances. Embrace an integration of Bitcoin as a macro asset into what they do. It's going to be really, really significant.
- [39:29]
Scott Melker
How fast will we see those banks actually participating now that it's been unwound? I mean, were they waiting on the sidelines and just needed the green light to go? Or is this, now we start our due diligence?
- [39:40]
David Sacks
Some had already started their due diligence. So some of the major firms, they do move slow. But then again, Tether made almost as much money as Goldman Sachs and Wall street no likey that. Right? So I think. I think they're going to move fast for Wall street, slow for crypto. But you start to see the first firms rolling out stuff in this half.
- [40:00]
Scott Melker
You'Ll see another rolling out stable coins to that. I mean, now that you just mentioned that, aren't they all just going to have their own stable coins?
- [40:06]
David Sacks
Jamie Dimon's gonna print a stable coin, and then it's gonna fail. And that's going to be beautiful.
- [40:11]
Scott Melker
Oh, God.
- [40:12]
Matt Hogan
Anybody notice the. The side of his building and what? Actually, the diamonds.
- [40:18]
Scott Melker
Bunch of diamonds.
- [40:18]
Matt Hogan
Diamonds? Yeah, diamonds on the side.
- [40:20]
Scott Melker
He doesn't even know how to spell diamond, though.
- [40:23]
Matt Hogan
Interesting.
- [40:24]
David Sacks
Yeah, I will just add one thought to that. I bet that Wall street overestimates the strength of their brand coming into the crypto market and underestimates the strength of the crypto community. You saw this a while ago where everyone said, tether is dead. It will be all usdc, and that just turns out to be wrong. I think. I think there is a degree of overconfidence that when Bank A comes into the market, everyone will abandon coinbase custody and Anchorage and Gemini and switch to Bank A, even if they charge twice as much. And I bet they'll find out that that is not true.
- [40:59]
Andrew Tillman
Well, they have to cater to an extremely dysfunctional family of crypto buyers.
- [41:06]
Scott Melker
Really wants to deal with us.
- [41:08]
David Sacks
That's right.
- [41:09]
Matt Hogan
Most people. Certainly the first Decade of crypto folks are here because they don't want to deal with banks. So none of those people are going to anything bank related. They don't want to touch it. That's right. And, and those, that first decade of folks are the most moneyed version of folks, generally speaking in crypto. Right. So Matt is absolutely correct on that, that front.
- [41:34]
Scott Melker
Matt, I need to let you go, but I want to ask you a question I kind of always ask you, which is at this point, what percentage of investable US money do you think is now has access to the ETFs? Right. I know it was kind of sub 50%. We're still waiting for the wirehouses. Vanguard will just continue to, you know, play the violin as the Titanic sinks.
- [41:59]
David Sacks
It's still sub 50. It's still really small. But I'll tell you, there's a, there's, there's been a change. Last week I went across the middle of the country meeting with national account platforms. And whereas meetings previously had two people who were under 30, these meetings had 10 or 15 or 20. So I do think you're going to see that open up this year. But it's still a minority of people have access this. I'd add one more thing. If you look at the early returns on the 13F filings which show which institutions own Bitcoin ETFs, those roll in until the 15th, so they still have some time. It's already showing a really dramatic uptick in Q4 adoption. So post election, I think you're going to end up seeing the institutional count double in Q4 and then it will double again in Q1. So it's happening, but it's still, the door is still just opening up. There's still a way.
- [42:50]
Scott Melker
And nobody talks about Bitcoin ETFs on the balance sheet, but we should. Everybody talks about bitcoin on the balance sheet, but we don't really hear how much BITB is on the balance sheet. But that's really what's coming.
- [43:02]
David Sacks
There's a lot of that at all levels. Yeah, for sure.
- [43:06]
Scott Melker
Yeah. But you know who's now poor Michael Saylor. He couldn't even afford to buy bitcoin this week, like 12 weeks in a row. And all of a sudden here he goes abandoning the market like.
- [43:19]
David Sacks
And we bounced anyway. We bounced anyway. Right.
- [43:22]
Andrew Tillman
I think he's ahead of his purchasing schedule. Isn't he though, Scott?
- [43:25]
Scott Melker
I think he's, I think when you ask as much in a month as you did in the first year and at a Price, four times as much. Yes. You get a pass for. Actually, it's Michael Saylor's birthday today. Happy birthday, Michael. We're sorry for joking with you. Everything you've done, we appreciate deeply. Same for you, Matt. Always love having you on here, man. Thank you so much. Try to take it easy on the uk. I don't. I mean, I know you're there to broker terrorists, but I'm not actually sure they make or export anything. Well, you may tell me what we get from the uk. Besides, they make a little bear.
- [44:03]
David Sacks
Nice scarves. But, you know, other than that, we'll be all right.
- [44:07]
Scott Melker
Yeah. Do they even make tea anymore? I don't. I don't know.
- [44:10]
David Sacks
All right, guys.
- [44:11]
Scott Melker
All right, man. Thank you so much. Everybody give that a follow. All right. Oh, our face has got huge.
- [44:17]
Matt Hogan
Holy smokes.
- [44:18]
Scott Melker
Look, I can do it. Yeah, it's like DJing. That's why I like playing with this thing. So there's so many things I could do that you guys don't even know about. I'm not gonna do. Look at this one. That's pretty sweet. So let's talk about Arch Public. Because it's awesome. Yeah. Here we go. This is your last tweet. I chose to bring it up. You guys don't get a say in what we talk about. Arts public. Volatility plus Bitcoin equals 247annualized profits. Bitcoin algorithm arbitrage strategy ignores the headline and feasts on volatility. Arch plus Gemini. So I think we had pageant. Was that last week? Two weeks ago. We know we had Jeff Park. Mickey has looked dumb as hell. I meant to ask Matt, like, why he hired Jeff, because, you know, that.
- [45:07]
Matt Hogan
You, like, you're not smarter than.
- [45:08]
Scott Melker
You understand.
- [45:09]
Andrew Tillman
Surround yourself with the smartest people.
- [45:12]
Scott Melker
Yeah, but I think we empowered him, man. Like, I've been reading Jeff's tweets lately, and I do not know what the hell he's talking about either.
- [45:20]
Matt Hogan
Yeah, I'm like, I don't know what this means, but it's probably important.
- [45:24]
Scott Melker
Okay, so anyways, listen, we. Obviously, we've talked at length about what you're doing with Gemini, with the. You know, for dollar cost averaging. So we want.
- [45:33]
Andrew Tillman
We wanted to publish a case study, if you will, and show exactly what the settings are that produce those results. But the point is, is to show how the software is different than anything else out on the market. Why it's different is. Is take, you know, if you are wanting to accumulate Bitcoin, for example, let's say you Take a short term buy position and the price goes against you. Well, if you're wanting to accumulate, you just put that in the, the store pile, the long term save pile and that's what you accumulate. But let's say the price goes up and you want to clip that little bit for some cash flow. The software allows you to determine what that range looks like and what those percentages look like individually and you can put the inputs right in the same input values that we've put inside this case study and you can play around with them and see what it does to the results right there in TradingView. So it's something that should spark interest when you look at it. And then what the next step would be is for us to let you play with the tool and so you can download the software and get started for absolutely no cost for three months and then it's 99amonth after that. If you want to stay with kind of our, our gateway or our starter package that will allow you to play with it with infinite number of variables and fine tune it for your parameters and really what your goals are. So this is a one, you know, one look at what the versatility of this software can do. It's not, you know, it's not the only thing it can do. It's a spectrum.
- [47:12]
Scott Melker
Right. We started with. Go ahead, Andrew.
- [47:15]
Matt Hogan
We get a lot of questions, you know, we've been talking about this particular arbitrage strategy for a couple weeks and we get a lot of questions that say, well, what if I want to take the cash that this generates on an annualized basis and roll it back into Bitcoin? And that, that's the beauty of this tool. If you want to do this, you can have the arbitrage strategy running inside of the tool and then you can have an accumulation strategy also running inside of the tool. That's just a different instance. So taking cash that's sitting there and putting that into your, your, your, your longer hold Bitcoin position. Listen, this is an institutional grade tool that we have brought to retail. And, and I, I cannot stress enough that this is a truly institutional grade tool that it, you can't find it anywhere else. You can find quote unquote, DCA products at every exchange. By the way, Scott, you're no longer allowed to say this is a DCA thing. You're banned from saying that on a go forward basis because it is still.
- [48:16]
Scott Melker
Use it to do.
- [48:17]
Matt Hogan
Yeah, you can, but it is so much, yeah it is, it is so much more than that. And these numbers show that. Right? It is, it is a remarkable tool. And the conversations that we have with people, there's just an escalating version of wow, wow, wow. Okay. I was going to wait a month or two to get involved. I have to do it now, I have to, to do it now. So, yeah, remarkable tool. And I will say this, you know, from the mind of, of Tillman and our development team, I, I just, I'm blown away at the work that they do on a, on a monthly, quarterly, annualized basis. This is, this is something that, again, I personally, and I've seen all the stuff that we do internally, I personally have just been blown away by, by what this tool allows people to do.
- [49:11]
Scott Melker
These numbers. It's crazy. So you took 100 grand on January 4, 2017. For those of you who may not be able to read this right, 100 grand, January 4, 2017. So yes, it's over many years, but you put in 100 grand, you ended up with 140 grand profit. So let's call it 20 grand a year in cash flow.
- [49:29]
Matt Hogan
That's right.
- [49:30]
Scott Melker
But also accumulated 18 bitcoin and this is at 96,000.
- [49:35]
Matt Hogan
So yeah, it'd be more now $7.
- [49:37]
Scott Melker
Million worth of bitcoin on 100 grand. So your cash went up 40 grand on your initial investment. You got out your investment plus 40 grand cash and accumulated 18 bitcoin.
- [49:49]
Matt Hogan
Well, this is why algorithms, this is why algorithms matter, right? Because ask yourself this. If you were somebody that bought a hundred thousand dollars worth of Bitcoin on January 4, 2006, 17 or whatever, it would you have held it the entire time?
- [50:04]
Scott Melker
Of course, even if you would have you, I mean you'd get like 5x or something.
- [50:08]
Matt Hogan
Yeah, yeah.
- [50:09]
Scott Melker
So 17, it'd be less. Yeah, so you'd be. Yeah, a lot more. But 20x, not even close.
- [50:15]
Andrew Tillman
It's impossible. Here's the thing, it's impossible to move forward with bitcoin with all of your eggs in one basket. The volatility and really the size and scope of it has lent itself to making these decisions very difficult and emotional. And so just like this drop that we experienced this weekend. You know, I don't know about you, but I'm a very seasoned guy. I've seen all of the drops, it didn't faze me. But I heard the house, the skies falling from everybody around me and no one was buying on the depths. They. In fact, people were calling for seventy thousand dollar bitcoin and going, oh, this is my chance, I'm going to load the Boat. You know, the point is, is like software doesn't have emotions. And what you can do with the texts from customers that mean the most to me are we got one. And he goes, I have fine tuned this and it's exactly what I want. And so he has fallen in love with the software like we have and gotten so in depth with it to where he's, he's come up with his own strategy that has his own fine tuning and he's in love with it and he, it fits exactly what his parameters are. But he's doing that out of the emotion of the ten thousand dollar drop in a day. He. And, and so when those types of drops happen, we should be looking that as, as at that as a sale. Like if you love bitcoin and you believe it's going up over time, why, why do we have this psychological barrier where we look at that as a negative? That's like your favorite clothing brand announcing a 15 off sale. You don't go, oh God no Ed, no, you go and buy some. And, and so this software takes the human element out of trading, you know, during the heat of the battle, and allows you to set those rules and parameters up way in advance, which allows you to have greater success. It's a tool that, you know, lends itself towards, towards that.
- [52:16]
Matt Hogan
One more thing to mention, Scott, if you can pull up that graphic on, on that tweet, you know, the internal, the internal things I could do.
- [52:25]
Scott Melker
Okay.
- [52:25]
Matt Hogan
Because we just, we, yeah, we just mentioned, you know, a hundred thousand dollars is the start of this thing and that's all that happened. But if you look closely at the quote unquote parameters of what's happening there when you're buying and selling bitcoin at different, the algorithm's doing that for you. It's $580 and $260 a clip. It's not $19,000 at one time and $21,000 at another. These are micro transactions that you're not having to worry about even if they're happening in the background and you're not sitting at your computer. These are microtransactions that are making decisions for you that turn into remarkable outcomes. It's, it's really something. It really is.
- [53:14]
Scott Melker
Yeah, it is. We're, I'm trying to figure out how to zoom in further on that, but that's okay.
- [53:20]
Matt Hogan
It's okay. Look at it on Twitter.
- [53:23]
Scott Melker
Look at it on Twitter.
- [53:24]
Andrew Tillman
Well, you, you've got the toggle down pat, so keep, you know, you don't.
- [53:27]
Scott Melker
You know, I don't even know where I'm gonna be. It's just me, not even you. You guys are here, but you're on the bottom. There's huge.
- [53:44]
Andrew Tillman
Your producer always posts those clips and they come up on my feed and they literally scare me. I don't know.
- [53:52]
Scott Melker
Your face is very. We. We have found scientifically that your face is very good for engagement. Oh, my God. Okay, we gotta end this, guys. Check out archpublic.com. you can also go to X. Try Arch Public. Follow Tillman, follow Andrew, follow Matt. People are mad. I see in the comments they're saying they had respect for Matt until they introduced garbage. It's not like Matt was like, dude, hit play on Doge.
- [54:20]
Matt Hogan
Yeah, come on. Yeah. They run a business. That business is all about bringing assets to ETFs. Come on.
- [54:27]
Scott Melker
Anyways, guys, that's all we got for you today. I'm gonna. I haven't messed with the arbitrage yet, but I'm gonna.
- [54:34]
Matt Hogan
Yeah, you should. You should.
- [54:35]
Scott Melker
I want more Bitcoin and more money.
- [54:38]
Matt Hogan
Yeah, there you go. Makes sense.
- [54:42]
Scott Melker
Not only do you get big. Would this be of interest of you if I told you that you could put in money and get more money and more bitcoin? Yeah. There's not an Eric Trump tweet one last time.
- [54:55]
Matt Hogan
You know, in the previous cycle, if you wanted a quote unquote cash out of a product that was associated with bitcoin, you had to deposit it and give up custody of it. You keep custody, all this stuff, it's all in your account. It's just arbitraging in a way that generates cash yield without you having to be concerned about, you know, the celsiuses and the FDX's of the world.
- [55:18]
Scott Melker
Yeah, you're not about to mention those. We're not. All right, guys, thank you. Give a Once again, check out Arch Public. Follow these guys. In all seriousness, it's amazing. I know we joke around a lot here, but the feedback has been absolutely astounding. And we will see you guys next Tuesday back here at 9:00am Eastern Standard Time. Thanks, gentlemen.
- [55:46]
Matt Hogan
Let's go.