← The Wolf Of All Streets
The Wolf Of All Streets
Fed Drops Crypto Reporting Rules for Banks! Big Win? | Crypto Town Hall
00:59:36
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- [00:00]
Scott
Welcome everybody to Crypto town Hall. Friday, April 25 and it's a pretty nice market this morning. Things look pretty interesting. Curious what people are thinking. You know, to me, 94 was a pretty important level. And with the Michigan sentiment being slightly better than people thought it was going to be, looks like the world is pushing forward and I suspect we saw some short covering over the last hour. Anybody really care or think that this stuff matters or are we just looking onward and upward in the bitcoin world and waiting to see how the rest of crypto reacts?
- [00:40]
Alex
It kind of feels like an alt season coming. We got bitcoin pumping, a lot of profits to take there in the future and it feels like a bottom on the altcoins. So I don't know. It's exciting.
- [00:54]
Scott
I mean, from my perspective, I've been looking at this. I talked earlier this week that 94 was sort of the flip level where technicians were all kind of leaning on it. On the short side, if most of the technicians and momentum traders start moving towards long rather than short, that creates a pretty interesting dynamic because that's where the supply has been coming from. The one thing that is clear, and we've seen it, is, is there is long term buying by smart people. I don't know if people saw this morning Senator Dave McCormick from Pennsylvania, who also happens to have pretty significant chops in the investment community from his role at Bridgewater, disclosed he owned more BITB than I do and quite a few other people. So other than him picking the same vehicle that a lot of us did in terms of the ETF space, I think that's kind of an interesting sign. You're getting more and more smart people disclosing and being willing for people to know that they're long bitcoin. And that makes it. It's just this kind of snowball effect where people start saying, okay, I guess it's okay. I don't know if anyone else has been talking a lot of people in the, in the tradfi community, but I have and it's definitely becoming more normalized.
- [02:16]
Eladio
Thanks for jumping in. I was in the glitch. I actually missed the question. So go ahead and jump to the panel and see what they're saying and I'll catch up.
- [02:23]
Scott
Well, what I was asking Scott, is if people in their conversations with what we in the crypto world often call normies, although I suspect it will be mainstream in the not so distant future. If you're seeing detecting a change in thoughts in terms of the risk of bitcoin and its place in the portfolios. I mean, I would say that sea change is definitely happening. And that is not a small thing, in my opinion.
- [02:49]
Eladio
Yeah, I think you're 100% correct. We've talked about this. There's no question that bitcoin is just becoming a mainstream asset. It's alongside any others in the ticker. And I think at this point, nobody thinks you're nuts to have at least 1 to 5% exposure in your portfolio. That seems to be pretty standard across the board. I get questions all the time about bitcoin, specifically from Wall street friends. And they're interested. They definitely are calling me and telling me that I'm crazy for investing in a scam or a Ponzi scheme the way that they used two years ago. That said, once you get beyond bitcoin, they do have a lot of those questions. And I think that consistently still hear about the nonsense of Trump token and meme coins and definitely about hacks and scams and things like that. But that seems to be now outside of the bitcoin narrative, which is definitely wildly positive, as you said.
- [03:48]
Matthew
Well, I'll even add to that something kind of anecdotally I've noticed from just older people that you just kind of know in your life. Kind of the 50 to 70 year old crowd who used to be on Facebook but now, believe it or not, is on Instagram, deep in the algorithm on Instagram. That group of people, I've seen a lot more favorability around bitcoin and then also things that I think have somehow done really good marketing towards that group and position themselves as xrp, believe it or not. I've talked to numerous kind of 50 to 70 year old people and when they know that I work in the space, the things that they're asking me about are bitcoin and xrp, which I find to be kind of interesting. So I think outside of professional investors that have kind of viewed bitcoin as having more legitimacy, you also see that into the retail kind of older audience, which is unique to kind of the like tech bro or finance bro or like E Commerce category of like younger crowd that had been traditionally into it.
- [04:52]
Scott
Yeah. Speaking of someone who's in that 50 to 70 year old category, I. I can.
- [04:57]
Eladio
I'm almost there, buddy.
- [04:58]
Scott
Almost.
- [05:00]
Dave
Yeah.
- [05:01]
Scott
Age is a number, dude. We'll leave it at that. But I still don't have an Instagram account, you know, but that's a different story. I waste enough of my time on X and I don't need, I don't need more social media distractions. But what is interesting. So I actually had a conversation with my daughter, if you could believe it, who's asking me about allocations. And I told her at her age I would, she was talking about account. I said, you know, it was a fidelity account. I said, just buy FBTC and call it a day. And she's like, well, shouldn't I? And she was the scared one. It was like, if you had told me that that conversation is happening, you know, a few years ago that, you know, the old dude is telling the young person, hey, listen, you know, this is why, and trying to orange pill my own daughter. I think I'm succeeding now. But it's kind of funny, right? You know, in terms of what's going on. But it's easy to see when you have pretty much the main leaders in this administration and many others who are all saying, look, this is an undervalued asset. It's pretty simple. So I know a lot of you, I say, I can't tell. He says, listener, but I can't tell if it's, if, if you're, I feel.
- [06:08]
Eladio
Audio as a speaker, but welcome to spaces.
- [06:10]
Scott
Yeah, yeah, yeah. I, I, I assume that, you know, you keep talking about bitcoin leading. I mean, what do you make of this morning?
- [06:17]
Dave
Well, I mean, not just this morning. How are you all doing? I hope you're all doing well. The bottom line is we got to, we got to a point where, where we're oversold, obviously, especially with the drop that we saw on Monday. And you know, let's be honest, I call it as it is. Trump is, Trump is a crying uncle here. He's negotiating with himself more than anybody else. He's, he's made some serious blunders. I think he's wasted a lot of political capital. We're about to hit the hundred days and that big beautiful bill hasn't been passed. And I think a lot of political capital was wasted, especially early on in the term with this, with this, you know, so called trade war, which is really, only really directed to China. That's what it seems. But the bully pulpit that the Fed and Trump have and, and, and let's be honest, you know, Joe Biden, poor guy, didn't know how to use the bully pulpit. This guy knows how to use the bully pulpit. And, and I remember 2009 and 19 where we had about 50 Chinese deals. And I think the calculus in his mind, and it's a different mind, is that, is that since we're the, we're the importers, not the exporters that, that, that everybody was going to give in, you know, and, and especially China. And, and I, let's be honest, there, there's, there's been too much throwing spaghetti on the wall. That's the problem. And the market got oversold. The market does one thing really, really, really well. It overshoots when things are good and it overshoots when things are bad. The inefficiencies of the market are exploitable. And I've been saying for a long time that you wait for the market to come back to you and that this is an opportunity to move up to higher quality. But there is a problem. We're seeing a leadership change in this markets. So the Mag 8 that includes Netflix, they're not going to be the same after this. And, and you have leaders that are coming in and that are clearly outperforming on a relative standpoint. And, and you know the names, you know the usual Netflix Palantir is one of those new ones. And, and, and the outperformance has been so, so massive that it has been easy to see who looks like is going to, what companies are going to be the new leaders. And yes, bitcoin turned green first. It did. And literally the market then followed suit. It doesn't work perfectly. Correlations aren't perfect, they're transitory at times. But let's be honest, Bitcoin broke down in November when liquidity was taken. November 2021 when Powell talked about taking liquidity out of the market, it was one of the first assets to break. Lower quality small caps and mid caps broken down earlier in 2021 when we had the meme phenomenon in March of 2021. And like everything that happens, lower quality breaks down first, higher quality breaks down last. And, and then one of the things I look for is what turns green or what has fought the downturn the most. The, the outliers. And there's no question then you look at risk, you saw bitcoin which is really in my opinion the only real player XRP might be have a lot of potential. And I've said this before in the same way that, that silver follows gold but let's be honest, bitcoin is the king. That's it. Everything else is just falling along. So the good news is I think personally this looks like a double, like, like, like an attempted double bottom that we saw on Monday and it looks like it's going to hold. That's my best guess. And we're not out of the woods. Earnings are going to be uneven. But in the world of AI and in the world of experienced CEOs, there's not going to be this disastrous earnings. They're going to either find a way to announce the downgrades or do it in a way where they could time the bottom of the market. I believe we may have bottomed it may. But you know, there's no variable for Trump. There's, he's, he's literally something that you, that you have to exclude and try to play the headlines as best as you can. But we still have one problem. The debt that we have to refi in June is not going to get refi if rates are at this level without the help of the last buyer of resort, which is the Fed. And I do believe if rates are where they are here today, the Fed is going to have to reintroduce quantitative easing. The market's going to love it and so is risk assets such as bitcoin, such as the QQQs, such as the S, the SPX, which is the S and P and value is in trouble still because of Lowe's long term rates being high, you're not going to get a rotation out of tech like all of the doomsdayers want because the buyer of last resort is probably going to get into the market and buy bonds and in order to reduce long term rates.
- [12:04]
Scott
So I want to take the other side of a couple of those things, Eladio. I mean, I generally tend to agree with you, but I think this classification of risk assets, people need to understand that yes, multiples can expand under quantitative easing and in fact will, but if earnings don't follow suit, and there's every reason to believe that, that, that won't be the case in a lot of companies, that a pure liquidity play, bitcoin is much more of a pure liquidity play and should, you should see significantly more and I hate to use this word, but this is how it will be looked at. Beta to the upside, then to the downside, which I know sounds crazy, but it's really a question of first principles, which is Bitcoin is a pure play on quantitative easing and liquidity and the melting ice cube of the US Dollar. Whereas it's very indirect with, with stocks because you're essentially saying, well, you know, if interest rates do in fact come down, then I need, I can, I can have some multiple expansion. So it is a, it is a different method of effect. But the other thing that, to keep in mind, and we're going to probably talk about it on Monday, Scott, you know, I know you'll be on a plane, but, you know, we'll still do macro Monday. You know, James can talk about, James Lavish can talk about it. It's not as binary as people think. I mean, they could easily keep things on the short level in June and as we approach it and look to term out later if you can't get things done now. So it's not these dates are sort of arbitrary. They're not nearly as, as set in stone as you think. That said, there's very little doubt that there needs to be some form of liquidity injected. There's a lot of risk in the treasury market. And I would advise, I would tell anyone they should listen to the podcast that James did with Marty Bent where they went through, they went through this and talked about that over the last, you know, talked about the potential from the Brookings Institute, talking about potentially taking on the basis trade away from hedge funds so that they don't default if things blow out a bit on the curve. So, you know, these are the sorts of things that get people really fired up about what's happening to the US Dollar as an asset and where bitcoin really does have an opportunity to shine. Matthew?
- [14:24]
Simon
Oh, yeah. Hi, everybody. Thanks for that. Dave. I agree pretty much with what you're saying. U.S. dollar expectations, well, interest rate expectations are we've got 93% chance of a hold according to the market for the May 7 meeting. And so that's basically we're almost nailed on for a hold in May, June. We're actually looking at a majority now, 58% chance of a cut in June, 25 basis point cut in June. So I'd agree with what you're saying pretty much about where the market's going. I just wonder at the moment with Bitcoin whether we could be having a buy the rumor, sell the news event with Trump talking now about having a trade deal coming with China. And maybe the market's pretty euphoric on that and we've seen a good push higher. But I'm just a bit worried about this push higher that we've had, because from the low that you talked about, the 74,000 low, which was, I think was April 9th, we've had a clear ABC higher where whereby the C wave, almost exactly where we just peaked at now almost exactly equals the A wave. And that's very typical of an ABC correction to the upside telling me that we're likely to have one more push down. And that would make sense if you know if there is still going to be some uncertainty about interest rates. So I am expecting possibly there's too much euphoria and we're seeing some green shoots here and everyone's getting really enthusiastic about Bitcoin's going to push to new all time highs from here. I think probably one more push down. As we say, one swallow doesn't make a summer. And I think that's the case at the moment. I think probably based on this ABC movement to the upside, we've also still got some bearish divergence telling us that potentially we're going to get another push to the downside. And that's one of the more accurate indicators, you know, looking at an oscillator like RSI against price peaks. So I do think there's likely. But as somebody said, I was listening to a show earlier, chartists don't have any, you know, any sort of crystal ball into the future. Nobody knows precisely where things are going. This is all just looking at probabilities. And I'm just saying this is a good risk reward level right now. If we do break higher from here, we've broken above that high that we had back at the beginning of March, March 2, the high of 95,000 there. So if we do break clearly above and stay above 95, then I would be bullish for us to continue to the upside now. So it's a great risk reward level to take trades potentially either way, keep your risk tight and with potential reward either way. So just saying be careful, watch the markets. Obviously we're Trump dependent at the moment, so let's just be very cautious and see what Trump has to say next.
- [17:17]
Scott
Alex?
- [17:19]
Alex
Yeah, I mean, I think we can do all the analysis we want on the short term of the market, but I think it kind of doesn't really matter the idea that I don't think bitcoin's going up because people think a Chinese trade deal is coming. I think if anything it's going to be going up because they think it's not coming. The market's very much do not press traffic at this point or anything coming out of the White House, especially if it relates to Grade. And I think there's this interesting thing. You know, it's not that I don't think anyone thinks we're particularly going to get a strategic reserve or anything like that, but the level of instability that he's causing in the markets and basically deep free trust in US's role as a stable point people looking for other things. And I'm not Saying that big time or being able to reserve currency tomorrow, I'm not sure it really ever will. But it is floating out there as kind of reasonable alternative for a lot of things. And you've got folks who are looking to just bounce out and offset risk. So again, it's going to go up, it's going to go down. We're obviously going to see corrections to the downsides and who knows, Definitely at some point drop fast to the first number being an eight, and maybe it drops back to the first number being a seven at some point, then it goes back up and it all kind of doesn't really matter anymore. It's long term, it's just going up.
- [18:38]
Scott
Yeah, I mean, look, nothing goes in a straight line. You know, we, we understand that. I mean, you know, at least anyone who's in the market, except for these idiots who like 50 or 100 times leverage, who just assume that they're picking off the bottom or they're picking off the top, depending on whether they're going long or short. You know, markets don't move like that. I mean, it just isn't. But we've had this really interesting dynamic of patient buyers and nervous sellers. And I don't see any difference in that dynamic at 94,000 or 95 actually as we are right now, but 94,000 as we did, really at 78,000, I mean, it's the same. And you know, that is a little bit different from a chart perspective. I mean, look, the technicians will flip because they'll say if, in fact we do get an impulse down, which I think makes sense, you know, just in terms of normal market reaction, you'll get a higher low. Right. You know, and so that's the sort of thing, I mean, Scott, you're always talking about this. I know you're on the, on the verge, one step out the door. But you know, to me, isn't that what we're seeing if in fact that that materializes?
- [19:48]
Eladio
If that was for me, Yes, I think so.
- [19:52]
Scott
Yeah.
- [19:54]
Eladio
I'm in and out because I had to. I have to run in a minute. But, but, but, yes. I mean, my general view is that we've changed the trend and that it's, it's trending bullish now until proven otherwise. Once you make a higher high, the bearish trend is broken. You could start a new one right away, of course, but if you're looking at. Technically we've entered a new bullish trend by breaking above 88,800, and that's disputable from A chart perspective.
- [20:19]
Simon
But you're right about higher highs and higher lows. But that's why the really important level is 69,000, the peak of the last bull cycle, 69K. So if we were to break below 69 that'd be really worrying. So as long as we stay above that 69 level then I'm bullish and I'm very confident we'll see new all time highs reasonably soon. But that 69 level is absolutely key as far as I'm concerned.
- [20:41]
Eladio
Yeah, Matthew, I'm generally with you there and I even add to that that I started to get a little bit nervous I guess personally below 74ish and we that are 70ft, whatever that previous all time high was from last year, the fact that that got front ran slightly, you know by $100 was a very good signal to me that that was bottoming well.
- [21:03]
Scott
You know, you have to ask yourself, I mean first of all the time of year that that happened was, is very important. People always forget that the year after a strong year, that period in time, those the three or four weeks before April 15, you know, when people are paying taxes matters. When you consider how many ETF holders probably traded it got in and out and made money. There was a fair amount of selling pressure that that's gone now. So now we're in a new world where it's okay, you know, are miners being forced, forced to sell because of sovereigns pushing up the hash rate? You know, is that where the selling had been coming from? You know it really is interesting to understand where the supply is because when you have the people buying are buying for the long term and you're seeing a very strong trend toward, you know, whale wallets buying. And you know we all kind of see it anecdotally. It's really a question of supply and demand. I mean we saw what happened with gold, but if bitcoin does a similar thing that gold did, you're not talking about 300 or $400 here. You're talking about a push well be an impulse well beyond the all time high into price discovery. And we haven't talked about that. But the difference is the last time there was a fair amount of speculation it went up really quickly. The strongest rallies are grinding higher rallies. You want want people to say things like Matthew did. I mean I'm not, not picking on you because I say the same thing, which is you want people to be nervous about a rally, right? You want it to climb a wall of worry. And it feels like there's A lot of that right now. And, and that, that to me is the kind of thing that there's no euphoria in the market, clearly, but there are people who are like, yeah, okay fine, I own this and I'm now I'm going to go to the beach, you know, that kind of thing. Anyone disagree?
- [22:56]
Eladio
I agree with that 100%.
- [22:59]
Dave
May I, may I say something, Scott?
- [23:02]
Scott
Yeah, go ahead.
- [23:04]
Dave
I agree with what David said wholeheartedly. I also agree with the fact that when the market, for whatever reason, there's always going to be a reason. Okay, Trump finally decides that he's going to stop, you know, waging the war against everybody else. It's a, except China or, and then now he's so, so, so the power of that pulpit is powerful. Rhetoric is so powerful. If you recall when, when, when Powell had his pivot, the market smelled it two months before in October of 2023 and, and, and we bottomed and then in December the confirmation came. There is a problem that the Fed has. The short end is not going to help the long end. I keep saying that and other people have said that too. You look what happened. The Fed lowered rates four times in the last six months prior of the previous year, 2024 and we got a converse increase in the 10 year and long term rates that was equal the amount of the decline. I will say something. I agree wholeheartedly that regardless we got to a negative sentiment. I mean look at X, everything was, everything was about to fall apart. And I hate to tell you but unfortunately there's also a narrative driven investment idea where half the people are against Trump and the other half are for and they make decisions based on policy of Trump or short term. That's just ridiculous and absurd. Like I said, there's no quantifiable formula for Donald Trump and what's in his mind about how he is the best chess player in the world at any given point.
- [24:48]
Scott
Does that really matter? I mean let's, let's, let's, let's be honest. I mean markets in Main street, you're 100% right. Look, we have a more divided country than we've ever had before. But if you read, if all you did, if you literally just read, you know, mainstream, you know, media, newspapers or watched msnbc, your view of the world would be, you know, like I always use the blind man and the elephant analogy. The view of the world would be, oh my God, America is falling apart. Look at how horrible it is. And yet you go out and you look at actual opinion polls and where things stand. And it's totally the opposite if you talk to people in, you know, businesses in various places. And I have been, I mean, the people who are running businesses in California, for example, are terrified. They're absolutely terrified. And they don't know what's going to happen to their business because they're afraid that their supply chains are going to be screwed up, et cetera. Then you talk to people in the middle of the country and they're like, yeah, whatever, we'll work it out. And it really is a crazy time in our lives, but I don't think people allocate money that way. Maybe I'm crazy, but I had a dialogue with the stalwart Joe always in the this Morning on X where he was showing that consumer sentiment over time. Yes, we had a small beat this morning for those who aren't paying attention, but it's still lower than it was in the global financial crisis. Weirdly, it's not as low as it was in 2022, which I have no idea why the hell 2022 was lower than the GFC or Covid, but it's true. But consumers are kind of crazy. It's still, however, over 50%, which is not a horrible number. So, you know, people, I just don't think people are making the financial decisions based upon the what they're yelling about nearly as much as people think.
- [26:43]
Matthew
I mean, how long in advance are things priced in? Like, because now, I mean, since bitcoin's an asset that trades 24 7, there's, you know, by now it's so mature that there's venues for options and future and leverage. And how far in advance is this stuff priced in? And is there just such a regular cadence of there's some big event, some big shocking event and then prices sell off? Was that due to that event or was that the pricing in of the global consciousness predicting the next shocking shockwave thing? I always wonder if the price action today is from the news of today or if that's the pricing in of, you know, the news next week. Like that's kind of how. What I always try to wonder.
- [27:29]
Scott
Yeah, I mean, I wonder the thing, you know, it's, it's always like that. I, it my analogy to the, the, the, the first establishment of the all time high right around the inauguration was the old Roadrunner cartoons with Wile E. Coyote. I don't know if people remember those things. I'm an old dude, so I like that one. But effectively everyone starts running and running and running and they Oh, I gotta buy, I gotta buy, I gotta buy. And the actual real buyers, the ones that are propelling the market, are slow, methodical, patient, and don't go there. So people are in this big cloud and they look below them and all of a sudden they realize they're alone and they're out off the cliff and kaboom. And I think you see that in markets where it gets, where you get blow off tops and it gets ahead of themselves. Where it gets interesting is when those patient buyers don't have, can't find supply at their levels, and then they capitulate and say, okay, I guess I got to participate at new price levels. And that's when you get into price discovery. We have not seen that happen yet. This entire rally has not seen that happen yet. I mean, we're now up to 80 companies who have Bitcoin on the balance sheet. We now have two or three companies who are using Bitcoin as a financial engineering vehicle to monetize their stock volatility to be able to buy more. We have n number of states, n number of sovereigns who are looking to accumulate. And with all of this, there's been net selling from the crypto community. Ask yourself when that happens, when that reverses. To me, that has not happened yet. I mean, that's the kind of thing that it's a different scenario. But if you look at the 2017, what happened in 2017, people don't remember. Bitcoin was traded from 2000 up to almost 5000. Then there was China FUD and it went down to 3000. And then it's 6x. Right. You know, I'm not saying we're going to 6x from here. I'm not saying that at all. Although anything's possible, I suppose. But, you know, markets, this, this market is, is different than people are looking at. And, and when you're trying to use old, you know, financial models that are used to assets that don't have the kind of supply dynamic there, there aren't very many fixed supply assets out there. Right. And so it's really hard. And so that's why I always caution people to be careful, careful with leverage on both sides, not to get too, you know, tied down to betas and other relations that don't necessarily hold up because they're not very stable. That's kind of the way I look at it. I don't know what you think. I mean, you've been looking at this stuff too.
- [30:09]
Dave
Dave, could I ask you a question? Because I do think crypto has or specifically Bitcoin has a huge advantage as a risk asset. Normally what I like about stocks is that I could see outliers. There's so many stocks and you see what's outperforming in when everybody's running for the exits. You saw how Facebook rallied 20 straight days prior to this downturn. I mean it went up in January, I think in the first few days for 20 straight days. Those are signs when you see these parabolic rallies at the top you have to keep an eye on what is moving up. But here's the deal. All peg ratios, PEs, all these reasons to buy stocks which are absolutely useless when you have the type of panic that we've had in the last 10 days. Fundamentals don't matter when you have really what was panic. But Bitcoin has a major advantage over all risk assets. You don't have to sit there and have a downgrade in earnings. You don't have to sit there and have the CEO time when they're going to take the hit on the guidance lower or when they're actually going to announce near a bottom because CEOs time when they announce good and bad things based on where the market is. It's sort of like a sea captain going in to sea. But bitcoin is a pure asset and it doesn't have all these.
- [31:31]
Scott
But a lot of you trade is because it's not a risk.
- [31:35]
Dave
Okay, well it has it. I know where it's coming from and it will go towards gold eventually if things continue down this reckless path where we cannot sustain the debt. You know this trade war is only about two things. China, okay, that's probably not going to work out as well as they thought. And they managed to do everything correctly about lowering gas prices, lowering the value of the dollar. But the 10 year and the 30 year are not moving in the right direction. And that's the problem. And they can't tell us that we can't, that we can't afford to refi $12 trillion of the $37 trillion that we owe in the next 12 months at these high rates, every 0.1 of a percent is a billion dollars of interest.
- [32:26]
Scott
And they should be, they should be thrilled then because the rate is under 4.3. It's at 4.279 right now and it was 4, 4 headed toward 4 or 5 about a week and a half ago.
- [32:36]
Dave
They should. Well the problem is the debt problem is so bad that we need to go to 3, 5, that's where or even lower because when you quantify the fact that the tenure was at 0.7 when Janet Yellen issued all that debt under five years, the tenure is now at four, three. That's six times higher. Okay, six times higher. And when you extrapolate the number of basis points, that's about 40 basis points. Excuse me, 400. 300. I'm doing it in my head here. 310 basis points. I believe that's 300 billion more dollars of financing cost. Because Janet Yellen did not issue our debt at 0.7 when she came into office.
- [33:20]
Scott
And there's little doubt that, that she left a sandwich for Scott Bessant to have to deal with. There's no question about that. But, you know, look, if you're an investor and you're listening to this show and you're trying to figure out what the hell's going on, all you really need to, your mental model for your investments need to be really, really. A question of Bitcoin. I always ask it this way. It's about adoption. If in fact adoption is doing what we all think it's doing. And I can't tell, Simon, by the way you show as a listener to me, I don't know if you're a speaker, but I know you care about this topic passionately. If Bitcoin's adoption as a store of value is going to materialize, you're going to see there's a 10x of it's at a minimum of a 90% discount to where we look at gold as. And so it's not about getting into it now. It doesn't make it not risky. So bitcoin is a risky asset, but it's not a risk asset in the sense of it doesn't care about rates per se. What it cares about is, is Bitcoin going to gain the critical mass of adoption? And all I'll say about that is every single sign that we've seen is upward. And that's why it rallied. I think the why, why of this week, this week is a really important week, right? You know, if you look how less correlated bitcoin's been this week to others as it's getting towards these, these key levels, it's, it matters. I mean, Alex, I know you, you think the same thing as far as that goes. I mean, this is, this is a trend. And looking at a particular week, we may look back in a year and say, ah, you know, Dave was, was full of shit. But we also may look back and say, okay, well, look, the trend really started Here. Right. And so it's just being paying attention to that from a crypto point of view. The other thing that's really interesting is through all of this today, if you look at the crypto market, I mean, ether is really still struggling. It's still, you know, it's at 1800, sure. But the Bitcoin Ether ratio is still below 0.189, you know,019. Right. But the rest of crypto is starting to do well. I mean, we were talking about Bittensor, I mean, Tao earlier this week. I mean, it's had a very steady, what's it, a 20% rally, 15% rally. I'm not looking at CoinMarketCap right now. I just know that it's up a fair amount from where I bought some. Right. And you're seeing that play out across a lot of crypto. You're seeing Solana getting good news. You're seeing XRP getting things approved and moving, moving higher. So you're seeing the entire crypto verse move higher. That, I think, is more symptomatic of how the rest of the. The markets are working. Whereas I think bitcoin is still marching to its own drummer. I mean, this is an alt season in the sense of bitcoin staying, you know, you know, being, you know, staying solid and the rest of. Of all coins moving higher, which is what you see in all season. We're not seeing that. We're seeing it all move sort of together. Right.
- [36:23]
Matthew
So kind of the way that bitcoin and the rest of the space are kind of moving now, it reminds me of something that, if you remember Trace Mayer, he said this back. It had to have been 2018. Maybe that was at the time when bitcoin, there were just so many forks of bitcoin. There's like bitcoin diamond, bitcoin gold, bitcoin cash, et cetera. And he had funded a developer to create basically a launch pad to make it easy where you could deploy a copy of bitcoin in one click. And his reasoning was that if you make it so easy to deploy a fork of bitcoin, then all the demand from a competitor that could come and supplant it would just get diluted, and it would basically just grease the flagpole. And at the time, that didn't quite make much sense to me because people would always say, like, oh, Bitcoin is the MySpace. Something's going to come. But now I think that point, I think, is true, and it's kind of been reinforced with how so much the retail Demand has been absorbed in basically what I equate to a fantasy football style trading experience where you're trying to bet on what meme coin is going to pump that month or that week even. And so I think that kind of the saturation of retail demand in basically playing this PvP zero sum game, I think that like what Trace Mayer had said in 2018, more in the context of bitcoin forks, but I think that that's actually fully applicable to what we see over the last couple of years.
- [37:55]
Alex
Yeah, I mean I think that's a hundred percent on point. And even if you just look at the evening going sort of like all the bottomless stack, if you look up at the top right, someone like Solana coming up and forcing Ethereum to basically get their attention and say compete on the smart contract element and accountability takes it further away from being sound money. Not that I think it was ever going to be, but it really just. The more anything comes up, the more it leaves bitcoin in its own class compared to everything else.
- [38:30]
Scott
So, yeah, I had a hard time hearing. You're a little garbled there, Alex.
- [38:34]
Dave
Dave, can I push back on something that you said, if you don't mind?
- [38:37]
Scott
Sure.
- [38:38]
Dave
And look, everybody thinks, look, personally, if you didn't buy the QQQs in 2016, sorry, sorry. That's all I'm going to say because you outperformed every stock. When I say that bitcoin is a risk asset, it's not an insult. It's good. Like I said, I find myself buying mostly growth stocks because I feel most people have forgotten that the markets of yesteryear have nothing to do with the markets of today. Innovation that is disruptive is the most important metric. More important than pes, more important than anything. But getting back to the point I'm making, there's no question that there was an inverse correlation since November between gold and bitcoin. So I'm not saying that bitcoin isn't.
- [39:25]
Scott
I understand that a lot of you, I'm not disagreeing with you. Bitcoin is clear. I just think it's terminology. When people use the word risk asset, they basically. And look, intraday. Intraday movements of the Qs and bitcoin are correlated over longer terms, they're not and for very good reason. Similarly, gold is moved because. Well, there's almost certainly. And I think the best explanation, and this is why I'm glad Simon's up here years. I'm curious what you think about this. I think the best explanation for gold's rally was other sovereigns accumulating in central banks, potentially as a kind of warning shot across the bow to the Fed, et cetera. At the same time, they're probably also creating bitcoin mining capacity. And mining capacity doesn't show up in price. It's not the same thing as going and buying bitcoin in the open market. So I think there's geopolitical things that are causing and at the risk of devolving into a geopolitical space, I think that there's a larger part of that and that would completely explain the divergence in Bitcoin and gold over the last quarter if that's true. Now, I'm not saying.
- [40:41]
Dave
But they correlate. That's correct. Because they're both plays against the US Dollar. The only problem I have with gold and with Bitcoin is that they are a bet against how reckless we're going to continue. And eventually the reserve currency of the United States won't be what it was at some point if we continue down this path of disaster. That's why bitcoin was essentially created because of the dollar debasement, makes risk assets go up. But I do think that over time, I agree with you. We're in the early stages of adoption. It's so small compared to all the rest of the assets that it has a big tailwind that other assets don't have. It's that increased adoption as we become reckless with our monetary system. It's the recklessness of what we have done since Barack Obama left office when we were only at 19 trillion and now we've added, we basically doubled the debt over that, that 12 year period or whatever period I think it was since 2016. I mean, come on. So that's very, very long term bullish for both gold and bitcoin.
- [41:53]
Scott
No, that's undeniably true. Simon, are you up here? Can you weigh in?
- [42:00]
James
Yeah. So I guess people are really speculating. So firstly, I believe that central banks have been accumulating gold for the last decade or so. There was an element of market oppression. And then there is a moment where that market oppression is taken away and gold is allowed to return to what its more natural value is. I believe that it is a central bank game and gold is the main asset of central banks. At the same time, when these operations, like what we have experienced, which is this, I believe, the strategic weakening of the dollar, you have a lot of capital outflows that is likely to want to find a new home. But in the moment that it's trying to find a new home, it has to park itself somewhere. It doesn't want to invest in overvalued stocks in the US it doesn't want to play the game of why are rates going up on the longer term, what is the refinancing strategy? So Treasuries are out. It doesn't want to invest in emerging markets yet because it wants to see what the outcome is. And you only really have a couple of places to go. You either go to the Swiss franc for your fx, but you go to gold. And at the same time, BlackRock, in preparation for this event, got the ETF approved, made it trivial for people to switch over to Bitcoin via an ETF and got all of the banks and financial institutions a allocation in Bitcoin. And so there are central banks that are playing the gold game. There's been repatriation of gold around the world. So if you look at the geopolitics you had Argentina sent its gold to London, London gold gets repatriated to us. And you can look at these flows that the central banks were preparing for a significant change in the world order in the dollar. And at the same time, there's a more speculative play, which is Bitcoin. And Bitcoin has been built up not only on the strategic reserve side from the US which we may not even see, but also other countries using Bitcoin as a mechanism for doing de dollarized trades. And so, you know, that's the story is where are you going to go if the world is changing? And do you believe the world is changing? I personally believe the world is changing and we're not going to see. I don't think this is Trump's incompetence that he overestimate. He underestimated what would happen and he's going to find a get out of jail clause and kind of pivot and make themselves look strong into a China victory. I also don't believe that he's playing 6D chess in order to change rates to refinance and playing this game of crashing the economy and then, you know, coming out the other side and forcing the Federal Reserve into quantitative easing and rate cuts. So I only come to the conclusion that the strategy is not incompetence. The strategy is a coordinated geopolitical shift in the world order. And I believe that that was an alternative to World War iii, because World War III was going to be incredibly disruptive for everybody. And so I think the Trump tariffs was a way of resetting the order. Consolidating small to medium sized businesses in America into large multinational corporations, resetting all of the trade deals not for America, but for the large multinational corporations that are going to be on the receiving end of all these trade deals that are being announced and a movement of capital out of the overvalued America into other emerging markets. And so I think the gold play and the bitcoin play, this is what it was designed for. The problem with the gold play, although it is a central banking game and you need to trust each other as central banks, but some central banks don't trust each other. And so if you are in an environment where you need to own your own assets, be able to send your own assets and have no key person risk or counterparty risk, then Bitcoin is actually the only solution for you. If you can't get gold in your country, in your coffers, knowing that there is a major change of event where people are trusting each other less and less and less. And so I think that is the bitcoin story and the gold story. I think they are the right places to be. And we shall see. Now this whole narrative of decoupling and whether bitcoin competes with the dollar, I think is a bit of a misguided narrative. We have a central banking system that's dependent upon gold and we have an alternative to central banking that also has a tech play, a payments play and a fixed monetary, monetary policy connected to it, which actually is its own story. Because what is that competing with? That's competing with technology, that's competing with key person risk, that's competing with geopolitical, how do you transit gold, that's competing with competing payment systems, that's competing with any custody type of relationship. And so I just don't think anyone knows how to price gold, sorry, price Bitcoin. Because I just don't think the world actually understands the implications of what Bitcoin is, which is. And so it could go down with the market. We could be going through bitcoin de dollarizing. There has been no doubt that throughout Bitcoin's history, it was created to combat, provide an opportunity to earn your own money, spend your own money and combat the fact that the Fed was socializing losses and privatizing gains. But throughout its whole history, that's what the Fed has been doing. I actually think that the Fed's not going to capitulate. There won't be qe, there won't be change of rates and there won't be a change in this tariff policy and that is the reset of the world order. And it is designed to weaken the dollar, designed to change capital flows. Because the dollar milkshake theory was about to take us to World War iii. And this is an alternative to World War iii. And bitcoin's a play.
- [49:10]
Scott
Yeah, I mean, look, we end up in a similar conclusion. I think that you and I probably should have a deeper dive. Not on crypto town hall about some of this stuff. I'd say that Trump throwing a big rock into a pond and see what shakes up in order to make deals and do what he can do is a strategy. When you have limited time and you understand the politics, which is as much as no one wants to see a bad economic situation in 2025, what they really care about is 2020, 26. The only place where you and I. Well, we disagree on a couple of things. But the most fundamental disagreement in what you just said is this administration tolerates big multinational companies, but their base is smaller, disruptive companies. They're trying to do things to make. And it goes across a lot of different policies in terms of where they want to see change. That of course is actually very bullish for everything we're talking about. So it doesn't really matter. But I don't know that it's a world order thing. I mean, I think it's more of a question of it is very clear that Trump and his cabinet have been hand picked for people who want to put the interests of the United States ahead of the interests of everybody else. And if in fact we're spending ridiculously more percent of GDP than anyone else on defense, then that doesn't make sense. We want to have a strong military. If we're paying for other countries and subsidizing them, he doesn't want to do ends up in the same place. But it's. It. You're. The notion of America becoming a regional power is kind of sort of what they're saying. What they're basically saying is America should be its own self. And that's. That's what it is. And you end up with. You end up in a very similar place, monotonous, which is they want the dollar and the stablecoin bill. And why people care about stablecoins is what I don't understand is how banks are this dumb that they don't understand that having a dramatically more efficient payment system that features the dollar at its hub for global trade is great for certain companies, certainly great for trade. But if you're a bank who wants free access to capital, the Faster and more efficient, the less people will hold in non interest paying vehicles. And that's what they don't understand. But they'll figure that out at some point in the next couple of years.
- [51:35]
James
Yeah, I think they've already figured out that's why they're trying to hold on to the yield. And again, this is where we slightly differ. I never listen to what politicians say. I always look at what their money's doing and what global capital is actually doing rather than what they're trying to feed us. When I look at how do you strategic, you know, how do you strategically weaken the dollar? You dismantle USAID because that's how all the COVID wars were funded around the world. You pull back from United nations because that's the mechanism for having a veto vote over anything that leads to issues with other countries. When you're exploiting resources, you push back from NATO not because you dress it up in a MAGA narrative, but remember, NATO was just a sales machine for US military companies. And so this significantly reduces the euro dollar, the petrodollar, the soft power that props up the dollar. Scott Bessant goes on and starts talking about how the IMF is not doing his job. JD Vance goes over to Europe and starts criticizing them. This is all about removing soft power, removing the apparatus that gives the dollar its power. And so the only difference is not in the bitcoin story. The only difference is those that are holding the treasury bags and the equity bags. And so people need to either buy into that Trump is doing this in order to make America great again, or you buy into my theory that actually this isn't Trump's policy. This is the financial people that control all politicians policy. And that's the global multinational financial institutions that control America and Europe because they financialized. You know, the JP Morgans, the Goldman Sachs, the Blackrocks that are multinational global financiers and they're the ones that control political process. And so the real question is, which one do you believe? Because when I look at what the end result of this is, I don't see how this helps Main Street. I think this sends lots of businesses bankruptcy. I think this pushes a lot of M and A activity. I think it's capital outflows out of America. I think it weakens the dollar. And so none of that is going to help American people.
- [54:23]
Scott
We'll see I think is the answer. I mean, look, one fundamental inconsistency in what you just said. And as I said, I think that this requires more of a deep dive. But J.D. vance and Scott Besant saying what the IMF is, the IMF is a tool of the, of whether you call it the wef, the World Economic Forum, whether you call it Bilderberg, whichever, whichever, you know, conspiracy theory or belief of who's controlling the world you subscribe to. The fact that this administration wants to break with that is pretty damn self evident in my opinion. I mean, whether they, whether it will work, whether they'll get away with it, we'll see. But the imf, what he actually said was really important. He basically said, listen, you're supposed to be stabilizing third world economies. Instead you're pushing a political narrative. You shouldn't be fucking doing that. I mean, he more or less screamed that get out of the soft power game imf, because we don't want you in it. And we're one of your biggest.
- [55:21]
James
But the IMF is the U.S. that's the theatrics.
- [55:24]
Scott
Well the theatrics are we are the biggest supporter of it, but we lost control of it. And that's what they're basically saying.
- [55:30]
James
Well, that's the theatrics. That's how you weaken the dollar. You pick a fight with the Fed, you're on the same team, but you pretend you're fighting the Fed, you're on the same team with the imf, you pretend you're fighting the imf, you're on the same team with all of these things. Because at the end of the day, there's no way that Scott Bessant believes what he's telling Americans right now. Scott Bessant knows that China was going to win this trade war and that this was just the execution of the strategy. It's not actually a live trade war. And all of the back and forth, all of the theatrics, Powell on, Powell off, tariffs on, tariffs off, everything on, everything off. That's, that's designed to strategically make America an unstable place to invest into.
- [56:16]
Scott
Well, can I give you an American perspective on how it may actually be playing out that's slightly different than that? What, what if the notion, and I think this is actually true by the way. So this is, this is my conspiracy theory. What if the notion is, listen, we can't build shit in America anymore because of state, local and federal regulations. I mean it takes, it just, you know, you can ask rock this, but it's the numbers and the numbers. What you can build in China from proposal to completion in seven months takes north of five years in America. And that doesn't include Projects that you literally can't do that could take decades. And so if you know that for America to reestablish its productive capacity and its financial independence, its strategic independence, that you need to engineer fear. And you need to be able to move politicians all around the United States in both parties to say, okay, we need to do this and create a moonshot to fix our regulatory structure which has gotten so calcified you're going to do all sorts of crap. I think that's exactly what they're doing. And to be blunt, I'm sort of in favor of it. I think, you know, we've gotten too fat and happy as a country and I think the people running the country kind of know that we need to be able to get back to building stuff not necessarily the way people think. I'm not talking about sweatshops. I'm talking about roboticized AI powered factories that can churn out stuff in a more efficient manner to leapfrog the old method of building. But in order to do that, you have to change the permitting systems, you have to change how environmental impact assessments are done. All that grungy stuff that you don't think about that we built up over years. To me, that's what I think is going on politically here. But I understand what's funny about it is that view and your view, Simon, end up in the same place. From an investment thesis.
- [58:07]
James
Yeah, I agree. Because whether, whether. I guess we're just adding narrative into the same result. But the same result is that we are not in the same stock market, we're not in the same treasury market, we're not in the same currency market, we're not in the same gold market, we're not in the same Bitcoin market, all of those are changing. And so, you know, if you are investing based upon a previous narrative or a belief that suddenly QE is going to happen and rates are going to be cut and the Fed's going to return to the old system. I think you'll be the one that ends up holding the bag if you're not moving your money at the moment.
- [58:45]
Scott
Yeah, well, I think that's a pretty good spot unless somebody else has something to say to wrap it for today. I know quite a few people are going to be in Dubai buy. I kind of wish I was in a certain sense, but I'm going to be still in sunny Miami next week. So, you know, we will see if we can get a quorum together for crypto Town hall on Monday and then, you know, play it by ear for the rest of the week. But once again, you know, obviously everyone listening should be following all of the speakers who give of their time. We will see you back on Monday morning. And the market feels like it's consolidating here. The volume volatility is lower right now, so who knows what will happen. But we are at critical levels. Anyone else have anything fundamental to say, or should we just wrap it right here? Okay, well, have a great weekend, everybody.