Podcast Summary: The Wolf Of All Streets Episode: Wall Street Panic As Bitcoin Holds Strong - Bottom Confirmed? | Macro Monday
Host: Scott Melker
Release Date: June 2, 2025

Introduction: Navigating Market Turbulence

In this episode of The Wolf Of All Streets, host Scott Melker delves deep into the current financial landscape, juxtaposing the widespread panic on Wall Street with Bitcoin's surprising resilience. Joined by his colleagues Mike James and Dave, Scott explores the complexities of today's macroeconomic environment, offering insights into Bitcoin, traditional financial markets, and emerging economic trends.

Market Overview: Bitcoin's Resilience Amid Wall Street Jitters

Scott opens the discussion by highlighting the intensifying trade war rhetoric and its palpable impact on global markets. Contrary to traditional assets, Bitcoin remains relatively stable, consolidating just below its all-time high. This unusual stability underscores a "tremendous optimism" among investors that Bitcoin will surpass previous peaks. Reflecting on a recent event in Vegas, Scott notes the growing celebrity status of the Macro Monday crew, emphasizing the increasing influence and reach of their financial discourse.

Scott [00:01]: "Bitcoin still consolidating just a few percent below the all time high. And there seems to be tremendous optimism still that bitcoin is going to return beyond the all time high."

Macroeconomic Indicators: Employment, Tariffs, and Treasury Demand

Mike James kicks off the macroeconomic analysis by discussing key indicators from their morning meeting. Chief economist Anna Wong anticipates a non-farm payroll report of approximately 96,000, signaling a weaker-than-expected job growth and a slight uptick in unemployment to around 4.3%. This cautious outlook raises concerns about the broader economic health.

James also touches on tariffs, referencing a recent speech by Chris Walters predicting a 15% long-term increase. On the topic of interest rates and de-dollarization, Audrey Chill Freeman observes that contrary to fears, demand for US Treasuries remains robust, particularly from foreign investors. However, she warns of a potential "bull steepening" of the yield curve if economic data weakens.

Mike [02:17]: "Our chief economist Anna Wong pointed out she expects the number non farm payroll to be about 96,000 or lower but weaker than expected... she kind of agrees with that."

Gold vs. Stocks: Diverging Paths and Market Sentiments

A significant portion of the discussion centers on the performance of gold relative to the stock market. James observes that while the US stock market is nearing all-time highs, gold is simultaneously experiencing a strong rally, a phenomenon that historically signals underlying economic troubles.

James [09:14]: "The 30 year yields have, they're just not in line with the rest of the curve... it's pretty high."

Scott remarks on the disjointed movement, noting that gold's rise typically denotes a "stark warning" for stocks, yet the two are moving in opposite directions—a rarity that warrants attention.

Scott [04:09]: "It's the next big thing. But everything keeps going up alongside it. Except of course the dollar which just put in its fifth monthly red candle in a row."

Bond Yields and the 30-Year Bond: Implications for the Economy

The conversation shifts to bond yields, particularly the 30-year US Treasury bond. James expresses concern over the disconnect between long-term and short-term yields, suggesting that prolonged high yields on 30-year bonds could spell trouble for pension funds and the broader economy.

James [09:35]: "The 30 year going to, it could easily go to 5 and a half, 6%. You know, and that's the question that we have to answer."

Dave complements this by discussing the potential impact on pension funds, likening it to the financial strain seen in past crises like Orange County.

Dave [14:25]: "If it goes down, nothing in the big picture... look at it with debt to GDP. That's what you would expect."

Mike underscores his contrarian stance, expressing skepticism about deflationary forecasts and emphasizing the historical correlation between Bitcoin and long-term bond yields.

Mike [16:30]: "The wealth creation speculation machine that's leading everything... I'm scared to use it's the word scary."

Bitcoin's Role: Correlations, Stability, and Future Prospects

Bitcoin's relationship with traditional financial instruments is a recurring theme. Mike posits that Bitcoin's stability is partially due to its perceived status as a hedge against fiat currency debasement. However, he warns that a significant downturn in the stock market could drag Bitcoin down with it.

Mike [43:17]: "I'm bullish... Let me finish because the risks of not saying this are so much greater."

Dave counters by emphasizing Bitcoin's current role as a speculative asset rather than a strategic store of value, highlighting its limited correlation with broader economic indicators.

Dave [57:39]: "Correlation does not include magnitude... it has to do with periods of time."

Scott ties these viewpoints together, suggesting that while Bitcoin shows promise, its current behavior aligns more with traditional risk assets than with a typical safe-haven asset like gold.

Scott [61:53]: "I think that as Dave, you've said... it's sitting at 110."

Regulatory and Policy Impacts: Supplemental Leverage Ratio and Stablecoins

A critical portion of the discussion revolves around the supplemental leverage ratio (SLR) and its implications for banks and the broader financial system. Dave introduces the topic by explaining how current regulations inadvertently encourage banks to hold more US Treasuries, contributing to bond yield volatility.

Dave [52:07]: "The stablecoin bill is what I was just the point of understanding why the supplemental leverage ratio matters."

James adds that changes to the SLR could unlock significant liquidity, potentially stabilizing bond markets by encouraging banks to invest more in Treasuries.

James [26:03]: "Banks can then pile on Treasuries... it could be a very large stepping stone."

The team debates the potential outcomes of regulatory shifts, including the influence on Bitcoin and other cryptocurrencies, with Dave emphasizing the transformative potential of tokenization in making assets more liquid and globally accessible.

Geopolitical Risks: The Ukraine-Russia Conflict and Market Implications

Geopolitical tensions, particularly the ongoing conflict between Ukraine and Russia, are identified as significant risk factors. The team discusses how such events traditionally bolster gold prices while introducing volatility into other markets.

Dave [35:00]: "Why is it up 2% today? Well, because Ukraine just bombed Russia... that's a big deal."

Mike links geopolitical instability to deflationary pressures, suggesting that prolonged conflicts could tilt the economy towards deflation, adversely impacting Bitcoin and other risk assets.

Mike [37:59]: "This is what we're tilting towards... if we get that little recession, Bitcoin does not go down a lot more."

Concluding Insights: Preparing for Potential Recessions and Asset Rebalancing

As the episode wraps up, the hosts reflect on the interconnectedness of various economic indicators and the precarious balance between optimism and caution. Mike reiterates his bearish stance on long-term bonds amidst rising yields, while Dave highlights the ongoing challenges posed by unprecedented fiscal deficits and regulatory hurdles.

Mike [52:03]: "We're overdue for one of those little magenta lines and that's gonna be next big trade."

Dave [54:43]: "The stablecoin bill is what I was just the point of understanding why the supplemental leverage ratio matters."

Scott concludes by emphasizing the importance of staying informed and vigilant, as the financial landscape continues to evolve amidst multiple converging forces.

Scott [63:04]: "Once again, another great macro Monday. Thank you. And we will see you all next week."

Key Takeaways

• Bitcoin's Stability: Despite Wall Street's volatility, Bitcoin remains relatively stable, indicating growing investor confidence in its long-term potential.

• Macroeconomic Concerns: Weak job growth projections and rising unemployment rates raise red flags about the broader economic outlook.

• Gold's Warning Signs: Gold's significant rally amidst rising stock markets suggests underlying economic uncertainties that could lead to market corrections.

• Bond Yield Volatility: Rising yields on long-term bonds pose risks to pension funds and may signal impending recessions.

• Regulatory Impact: Changes to the supplemental leverage ratio and the advancement of stablecoin legislation could significantly influence financial markets and cryptocurrency dynamics.

• Geopolitical Risks: Ongoing conflicts and geopolitical tensions continue to affect market sentiments and asset valuations.

This episode of The Wolf Of All Streets offers a comprehensive analysis of the current financial climate, blending traditional economic indicators with the evolving landscape of cryptocurrencies and regulatory frameworks. Whether you're a seasoned investor or new to macroeconomic discussions, Scott Melker and his team provide valuable insights to navigate these turbulent times.