The Wolf Of All Streets - $1.1b Liquidated in 24 hours On Crypto Pullback | CryptoTownHall

Episode Date: October 31, 2025

This episode of Crypto Town Hall gathered top crypto analysts, traders, and community members to discuss current market volatility, recent liquidation events, and macro forces shaping digital assets. The goal was to examine the ongoing price action—including over $1 billion in recent liquidations—and debate whether we are at a market bottom or top. Speakers also explored the maturing crypto landscape, with special focus on institutional adoption, the impact of the four-year Bitcoin cycle, MicroStrategy's business model and credit rating, and the competition among digital asset treasury (DAT) companies. The discussion was lively, honest, and full of practical macro and market signal advice for both institutional and retail participants.

Good morning, everybody. Welcome to Cryptotown Hall every weekday here on X at 10.15 a.m. Eastern Standard time. For full transparency, Dave and I are both in the glitch, we cannot really see our speakers. So we don't actually know who's on stage. So to the speakers who are on stage, feel free to jump in any time. Because we, you probably are speakers, but we don't know it. You do a roll call. Yeah, maybe we should. Okay, there's Yago. I know that voice anywhere. Yeah, that's a good idea. I see, I'll tell you what I see, so you don't have to roll call. I see C.J., Dan, Amateo, Nicholas, Yago, Lou, Lawyard, and actually, I don't see

Lawyer as a speaker, but I saw him give them the thumbs up. So Dan, Amateo, Nicholas, I definitely got nothing on that. Yeah, lawyers, too. All right. Welcome, everybody. Okay. So we're going to do our best, obviously. to moderate this.

I think the story of the day, obviously, is price action. 1.1 billion liquidated in 24 hours on crypto pullback. I'm pretty astounded that we can have 1 billion liquidation days just a couple weeks after we liquidated 20 billion, but here we are. Bitcoin trading pretty much right back to before the liquidation event, right? I mean, I haven't honestly been taking too deep a look at the charts, but it's actually up in the last 24 hours, if only so. slightly. So non-event, back to 110. A bunch of people lost their money. Is that the story here, Dave?

You're always looking at it. I mean, what's the open interests look like? Plus, don't we also had $31 billion in expirations today, which we talked about before, which was the biggest ever. So a lot of volatility was sort of anticipated here. Yeah, and I've made the point to people, you know, everyone knows about Max Payne, but understand that on expiration days, round numbers, become magnets until the expiration is over. So 110 being a magnet being the roundest of round numbers or the second roundest, I guess 100 would be the rounder, is a completely predictable response. You know, short-term trading, there's a lot of different factors that go into short-term

trading and we understand it. You know, I think Texas West Capital made a really good point, you know, the other day. It was that as long as people are willing to ape in on 50x leverage. Every time they think it's starting to break out, there's going to be, first of all, it will exacerbate volatility of the move higher will be slightly higher than one would expect because that's just more money going into the market. And then when no one follows them, they get liquidated, boom, it creates non-constructive price action. Every time that happens, you get more and more people who capitulate and give up. And on, it's, there's no scientific way of saying this, but I've seen way more chatter on X about people saying, I've had it, I can't take it anymore, it's not going anywhere. Understand whether it's a V, the reason V bottoms happen are people, everyone sells it once.

The reason trends and ranges break is because people decide, okay, I'm done with this. So what you, if you, based on that, ask yourself a very simple question when you want to place your bets or understand where you, you're going to be. Are there more people at this point saying, I'm tired of buying, I'm liquidating, I'm done, I'll wait for the market to prove it to me, in which case that sounds like a bottom capitulation, though more people saying the opposite. People saying, okay, I've seen the selling and I'm done, I'm going all in right here, right? And you know, which generally you see at FOMO. You know, this feels much more like bottoming behavior than it feels like topping behavior. But, you know, what the hell do I know? I mean, for all I know,

you know, most of everything being bought is on leverage, and, you know, we see this stuff in the leverage. So it's a really interesting question. I thought that was a pretty salient point. I've also seen a far higher acceleration of just really, really ignorant, borderline dumb takes lately, you know, in terms of why, you know, Bitcoin will drop, blah, blah, blah, blah, and we could go through all of those. And generally, you see. see really bad takes and fud accelerate at bottoms not at tops and you see you know the the mooning ridiculous everything is great sunshine and rainbows and unicorns at at tops so we're seeing a lot of unicorn stuff in the the plumbing underneath crypto and you you were talking about that with with lw on

your Friday 5 this morning but I'm not seeing any you know I'm not saying anything you know any real bullposting except for people like sailor and he's been consistent all along Anyway, that's probably too long. I'm sure some people here. I must have triggered somebody with some of that. I will just say, and we mentioned it yesterday, crypto, fear, and greed, and S&P, fear, and greed. Actually, I haven't looked at crypto, but S&P fear and greed in an all-time high was that fear. So that's certainly not topy.

You would expect a massive greed to signal top. Also, to your point, if we're talking about bottoming or topping, and you know this, I'm not saying you're not saying this, but we're just sideways. I mean, 110K is kind of where we've been for a very long time, right? Give or take, five or 10%. And it never surprises me. Every time this happens, every time it happens, it starts to, you get an acceleration in fear and loathing, acceleration in despondents.

It's like, oh, this is going to go anywhere. And those are the people who are in this market trying to make a quick flip. And when you're trying to make a quick flip, you've got a problem. And let's not forget the event that happened two Fridays ago took billions of dollars out of the hands of people who are biased long and put them into the hands of people who are biased short. And anybody who expects that that wouldn't have an impact, because I said it at the time, and I said I was blunt, I had no clue, still don't have an idea of when that effect is dissipated. But that was a big event from a speculation point of view. And so, yeah, I mean, that's where people like James Wynn, he said he called, you know, our mutual friend Joe Carlos, are completely delusional bull. He insulted Grant this morning, Gary, your brother, you know, basically saying, well, he's in a bubble anyway, so what the hell does he know?

And James Wynn is, you know, look, I'm not going to say he's a clown. His public persona is a clown. The comments he makes are dumb, but he's putting a shit ton of money behind. stuff, so who the hell knows what's really going on. But the arguments are just bad arguments. You know, he made up. Right. Yep. Just, sorry to interrupt, but can you just explain one thing to me and maybe it's obvious, but how does, you know, when, you know, people get shorted out, how does that end up in the hands of the shorts? Well, the shorts made money. I mean, it's a zero-sum game, dude. It's, you know, if you see $19 billion in liquidated assets, right? You know, who do you think is

making is making the profit, the people who were short on the other side. Every derivative contract has a long and a short. So those shorts made shit tons of money. Now, admittedly, and the people who shorted probably made a shit ton of money at the bottom with their spot longs that were sitting there that they pushed price into. But hey, that's right. Yeah, that's probably true. Now, what we don't know, and the reason why I have absolutely no clue, as to why you can't really estimate, because a lot of the money wasn't made by shorts per se, It was made with the exchanges who liquidate people at the absolute bottom. And we know, you know, it's funny.

So here's the stat that I think people would find amazing. So we all heard about auto-de-leveraging and finances, you know, sell us. What people don't understand is 70% of the ADL cells that happened were at the almost PICO bottom of the move. Meaning, I mean, the buys, the people who are short. So people who are short, they said, oh, well, you're short, you got your shorts liquidated. Well, yeah, except for your short, you literally bought back in your short, 70% of it at the absolute bottom, which meant it was a good trade. And overall, the people who got bought in probably did pretty damn well in where they bought in. And yes, you know, there were others who had to get compensated.

But understanding that dynamic matters. So people who were generally short did very, very well. But they were doing well before the capitulation when. people got shorted out liquid and people get liquidated didn't that go into the hands of then you know people who wanted to buy i i don't see how i mean if you're if you're a perma bear uh you're not changing if you are a trader and you said this is a buy and you're trading the range then ask yourself we at the bottom of the top of the range right you know if we're at the bottom of the range then yeah they may flip to buy we don't know i mean people don't don't public the only

it's very, very rare that traders actually tell you what their positions are when they're doing it. If they're doing it as part of a Reddit group or whatever, you know, you hear it. I mean, it's a lot of traders move like weather veins and certainly the influencers on crypto Twitter. I mean, fuck. I mean, you know, I can't tell you the level of annoyance it is to see, join my group. We're making, we're making money on this because, and all the same people were saying go long right before it crashed or go short right before it rallied. So I have no idea. What I will say is, generically speaking, the people who are biased short did much better

than people who were biased long. And that's the only point I'm making, Lou. There's nothing definitive in any of this. It's just that happened. But that was weeks ago, and we might be done now. Amateo, I see your hand up. Yeah, I was going to see if you had any idea this day. But with the kind of volatility we're seeing in other assets, obviously Bitcoin isn't

that volatile, respectively. And how precise some of these liquidation events seem to be. What's your gauge on how much of this is human-driven versus algorithmic an agent? Oh, I think it's mostly human. I mean, you know, there are people who run algorithmic, you know, trading strategies. And there's two types of algos, just to be clear. There's implementation algos like my company, the one that I founded, CoinRout, which is basically answers the question, I need to do, I need to buy this,

I need to sell this within this time frame, do it the most efficiently. There's a lot of that. That's growing more and more, but that doesn't drive markets because you still have the primary decision is I want to buy this or sell this. Then there are people who are running mechanistic trading strategies, quantitative trading strategies, and there are definitely some of those, and they're out there trading, but they are definitely at, they are dominated by spot buying from ETFs or retail, whatever, and or other traders in the markets. Now, people often confuse other things. People often

confuse market makers who use lots of algos, but what their algos are to keep themselves in balance. And so if you see what looks at the algorithmic selling of spot, it might be because they have gone, they have been forced to be long via an OTC trade in an option or some other derivative. They're maintaining a spread, not trading percentage. Correct. And so it's, while in equities, it's a relatively small percentage, but meaningful. In crypto, it's a smaller percentage is pure alga. So everyone who thinks that computers are dominating this stuff, they're not.

They're certainly, look, I worked for arguably one of the largest algorithmic trading firms on the planet in 2 Sigma, right? And, you know, and yes, and there's 2 Sigma. There's Renaissance. Citadel has a lot of it. there's a bunch of others. But the volumes from that side are dwarfed by the volumes by Virtue and Citadel's market-making operations, which really are more about spread. So the question is, is no, it's not that. At least I don't think so. I don't think that's a large piece of any of this. I mean, it's certainly meaningful, but it's not dominant. Thanks, Dave.

Absolutely, very clearly. Dave, I can't see any hands, any anything. I thought I saw something fly up from CJ before. Yeah, I don't know. I mean, the other thing, there's a bunch of topics. I see Yahoo's hand, so I won't push the conversation of the direction. Yago, why? You go ahead.

Maybe you can. Yeah, I want to try out the theory with you guys that I've been considering recently, which is we've been seeing now produced volatility in Bitcoin for a while. and especially over the last few months, trading in a very, very tight band. And one explanation that we've had is, and that I've espoused myself, is that what we're seeing is,

on the one hand, a slow introduction of institutional capital into the space, but it seems almost like perfectly balanced with people who are rotating out because there's reduced volatility. and because they've made substantial capital over the last five, and really in particular 10, 15 years. And this theory, while I think it's definitely borne out by the data in broad terms,

the fact that there's this perfect balance doesn't really make sense in and of itself. And so it occurred to me, I think that there is an additional component here, which I haven't really heard anyone else speaking about, which is that I think we're on the precipice of an extremely important moment. Everyone has always expected Bitcoin to exist within its, you know, what is it only happened three times, but we talk about it as like the traditional four-year cycle. And that four-year cycle were to exist would be ending sometime between now

and the end of the year. And people, there's a huge amount of fear, especially amongst experienced participants in the market, that just on the basis of that timeline, which has been so remarkably consistent in the past, we should have a peak very, very soon, and then the price is going to crash. And so I suspect that there's a large amount of participants in the market who are very much in a wait-and-see moment. And almost nobody wants, certainly no one experienced, and that's where most of the capital is, wants to move into the market now and sort of be the exit liquidity for everyone else if indeed we still have a four-year cycle. Now, if what I'm saying is true, and if this is... really sort of like the dominant mind frame for most people looking at the market. And I think if you reflect on a bit, most people have been thinking about this in terms of where are we in the cycle, then that would suggest two things.

One, we are not going to see significant price increases until the end of the year and potentially a little bit beyond that. We might even see a drop-off just out of the fear that it might happen towards the end of the year beginning of of January but if we don't if we get past that point we will for the first time ever have an actual confirmation that the four-year cycle is no longer the valid way to be thinking about this is no longer the correct framework and I think if that if that is what is sort of maintaining the price in status and stasis right now then that would point to the January-February timeline as being potentially set up for a move which is going to take

almost everyone by surprise i think there's a lot of truth in what you said i've been saying similar things which is but i don't know about i don't i hate picking specific dates because it's really it's hard to say but the crypto community writ large four-year cycle myth is driving a lack of speculative follow-through for sure, right? So a lot of the largest players are like, okay, they're hearing that it doesn't make sense anymore. And mathematically, it makes no sense. Let's just get that out of the way. The size of halmings no longer are dominant, and so it shouldn't matter.

And we're seeing S&P and other markets make new high after new high, which says they don't give a crap about what crypto thinks in four-year cycle terms, but whatever. I think that you're right. I think it drives a lot of action. The question is, and this is always the question, have the people, have all the four-year cycle proponents already shot their wad? Have they sold what they're going to sell? Or are they still waiting, holding out hope and, and, you know, kind of hedging themselves. And if you knew the answer to that, well, then, okay, then you know how to trade. And if the answer is they've shot 75% of it, 25% more you expect over the next couple of months, then you're January, February, thesis is absolutely right. If they're done, well, then no, then we could have a really interesting November, December. If they're not even close to done, then it might take out a lot longer or whatever, because the one steady thing we know, at least in Bitcoin, is there is a consistent bid from institutions who are way underweight what their own gut is telling them they want. And that's not even accounting sovereigns like France, right? You know, people don't talk about

it very much. But when you have a major country saying, you know, we think we should have owned 2% of the Bitcoin supply, well, yeah, that's definitely not in the price. So there's a lot of that. And so, yeah, it's a really important question, Rago. And I think the mental model is absolutely right. Amatoa. Yeah. I think that's really insightful, Yago and Dave. I mean, I think that there is this tension that's being held between this perception of the four-year cycle. And I think the distinction there, Dave, is like, yeah, there might be all sorts of legacy vintage bitcoiners who are going, look, this is fine for now, and I'll de-risk this sort of just in case. But when I look forward to next year, and I see that we've got more rate cuts coming, we have

QE starting, and we have what's going to clearly be some kind of crazy Trump-fueled print into the market, do we expect that to just take us mega bearish? I mean, I don't see any, with the lack of volatility in Bitcoin, you know, the other way to say that is like the consistent demand despite any kind of headline, despite any kind of downward pressure is sustained. And so I think what we still have is not a clear risk on signal. And I think that there's a very strong chance that all indicators are pointing towards next year, us getting a risk on signal. And I don't see, and I do think that that signal in and of itself can take a lot of people by surprise by saying, wow, the four-year cycle did not hold up this time and

look where we're at. And if that's the case, it's important that we're prepared for that possible outcome. Yeah, I saw Lou's hand up. You still there? Yeah, I'm just going to say that, you know, from my perspective, the macro thing that's going on really is this move from, you know, retail, enthusiasts, and archists, whatever you want to call it, to institutions. And I really think the institutions are broadly far less interested or focused on cycles. Yeah, and I think, you know, people are cycling out. We're over 100,000. Yeah. And eventually, you know, the people are going to cycle out and we're going to start moving it. Yeah, I think that, look, there are two things to know about what we talk about when we say institutions.

Thing number one is the way they accumulate assets is very different than the way the crypto community has accumulated assets in the past. Institutions tend to be methodical. They tend to participate based on volume. I'm not going to say they're price insensitive. They're not. They are price sensitive. And at certain amounts, certain limits within a day, you know, two, three percent, they tend to say, okay, you know, we'll wait for tomorrow and see if this cools off. And that is a different dynamic than FOMO.

The second thing to know that institutions are the reason there's institutional money is not only from pension funds, which are actual institutions with boards, et cetera, but also aggregators. I mean, when people talk about Black Rock, I find it hysterical. Some of the worst takes on this platform, and I mean really bad takes, are, well, Black Rock is doing this and Black Rock is doing that. And we hear this constantly. And Scott, you and I always make fun of these idiots. Most of Black Rock's buying and selling has nothing to do with anybody at Black Rock at all. It's their clients. And we're talking hundreds of thousands of clients operating as a crowd.

So that's really an important thing. Anyway, CJ, I see your hand. Yeah, great, great combo this morning. Good morning, everybody. I think that the four-year cycle is going to be disproven, and that's because of the institution stepping in, the big base layer of demand that's growing out, and ultimately it's the maturation of the marketplace.

But two signals that we can keep an eye on, if you're worried about the four-year cycle, just remember that the psychology of the market, almost never fails, right? So as Dave was saying in the beginning, you're going to get these stages of depression and, you know, ultimately that will transition up to euphoria. And that never fails. And right now, we're climbing a wall of worry. People are worried about the four-year cycle. They're worried about Bitcoin going down. There's not max bullishness. There's definitely no euphoria in the marketplace. And then the other thing that we can keep an eye on are the funding

rates. So when the funding rates get ridiculously extreme, we know that the path of least resistance is going to be the opposite of the balance of those funding rates. So for people who are in the space and wondering, you know, what signals can I look for, what can I watch for? I think the psychology of the market cycle is probably one of the most effective signals that we can keep our eye on. And when everybody is super, super bullish, we know that, you know, it makes some sense to trim some off the top and have some money. need to buy an upcoming dip, but when we get through this four-year phase where people are starting to realize, wait a second, the bid on Bitcoin is there. The bid on Bitcoin is real. This

wasn't speculators just waiting for some Q4 pop-off. These are our long-term accumulators. Then I think we're going to see a rush of capital flow back in on top of what Amateo was saying with all of the macro conditions, which is why I know people don't like, and enjoy the macro as much. But, you know, to me, it's, it's an interesting concept because when they, when the Fed started talking about cutting rates, excuse me, hiking rates in 2022, there was a smart money prepositioned itself. But the big moves didn't take place until the rate hikes actually started happening. What's interesting this time around was we started talking about the cuts and we've had a few. And people are still in disbelief. They still don't, they still don't believe that the rates are going to go

lower, even though Powell's going to be replaced. Trump's going to put in the printer. We have to run the deficits. So I think these kind of common sense narratives to people who have been in the marketplace for a while are not so common sense to the wider marketplace. But when they do become common sense, Bitcoin is going to move in a way that allows it to keep its top spot as the best performing asset in the world. I love that take, CJ. That says it better than I was saying it. So thank you for that. I think that if, unless there's all this, I think it's worth talking a little bit about micro strategy and what Sailor was saying yesterday because there was some interesting nuggets

in there. Scott, you agree? Yeah, I didn't listen to the entire earnings call, but I saw a bunch of the quotes and quips and obviously I spoke to him on Monday, which I think was a bit of a prelude to what he was going to speak about in the earnings call. Right, but I mean, there are two nuggets in there that I think that people don't really appreciate. And probably the most important one was that he was happy and, you know, about the fact that S&P gave him a credit rating.

And people, anyone who read the S&P report knows that the report was ridiculous, really, you know, in terms of the way it said it. But effectively, they gave him a crappy credit rating because they said there's lots of risk. Now, I will tell you why they did. Forget their words because they explained it really badly. What they basically said is, listen, you know, his average buy price for Bitcoin is $70,000. We've been told that 70% drawdowns are possible in this market. We've seen it happen before. Therefore, you know, in a 70% drawdown, there's obviously going to be major credit issues, et cetera, yada, yada, yada.

So what does this mean? Well, it means a couple things. First of all, the longer we go without massive drawdowns, the better as credit rating will get. And the higher the price of Bitcoin goes, the better as credit rating will get. It becomes a reflexive, you know, basically an accelerant. Now, why does his credit rating matter? Well, because the better your credit rating, the better margin you're going to be able to do in financing activities, in the transition to not just a capital stack on Bitcoin, but really, really being able

to disrupt the financial industry by becoming what people like to call a Bitcoin bank. And so if you want to understand why micro strategy might outperform Bitcoin in a rally, this explains it. And there are a lot of people who have said, well, empirically, the last couple of times Bitcoin rally, it hasn't done it. I'm talking about a sustained rally, though. In the case of a sustained rally, their, quote, MNAV will go higher. And this is why.

And it's very clear. And that, to me, is the easiest way to explain, probably easier than he explained it, what the investment case is. I mean, I assume you talked about some of that. I'm sorry, Scott, I have to tell you. I didn't watch your interview with him. But is that jive? Does that make sense to you? Yeah, I mean, my takeaway from speaking with him, obviously, is that he's carefully directing the narrative to a,

bigger and broader audience and has identified the digital credit narrative as the one that's going to matter. You know, I think he's pounded the pavement enough on Bitcoin over the years. He's not particularly interested in talking about the performance of micro-strategy stock. I think, and CJ, obviously, you're very deep in this, but I think he's realized that for the average investor, a 10% yield or, you know, 17% adjusted after taxes is really, compelling in an environment where rates are about to drop and go to, you know, one, two, three percent for mutual funds and bank accounts. And when it comes to the credit rating, he did mention that. I think he viewed it as a milestone that a treasury company can get a

credit rating. He didn't really particularly care when we spoke about it about what that rating was. And actually, I think he called one of them, STRD or something. He called it a intentional junk bond or something passively in our conversation. So he's admitted that, you know, with STRK, STRC, STRD, all the STRs, that some are created for people with exceptionally high risk tolerance and volatility. And some, as he's created more and more and more, have, you know, lower yields, but more less volatility and are more safe. And he even said to me, I wish I had learned all the lessons the market has taught me when I issued the first three, but by the time we got to STRC, I understood, but the market

wanted. I have to tell Dave, I did get a chance to watch that one. If you guys are hearing this space right now, right after this space, the first thing you go do is watch Scott's interview because it's one of the best I've seen on digital credit. It was

an absolutely amazing conversation and you are going to come out smarter after listening to it. And most importantly, I think you might understand where technology is going to evolve finance and money, right? We all know that this technology is being adopted and integrated. It's kind of hard to put your finger on how is it going to change my life and where is it going to have the biggest effects? And I got to speak with Saylor at BTC and D.C.

You know, he was talking about digital credit. I'm talking about Bitcoin powered finance. It's such an interesting concept because digital credit is solving a cash flow problem, right? It's solving the problem of negative real interest rates. It's paying at a at a price that can actually give you a positive rate of return. It makes being a saver makes sense again. And this is why people are talking about all the money in the in the in the money market funds, the seven trillion dollars. As the rates go down, those people are no longer incentivized to be savers. They're incentivized to be investors. So they they stop saving and they start investing and that pushes up prices. Well, this digital it is a savings vehicle. It leveraged savings technology to create a savings vehicle that creates

a real positive rate of return. It makes saving makes sense again. And what's interesting about the different issuances is that you can be a low risk saver, a medium risk saver, or a high risk saver. And before it's just like you're either a save or you're not. And now you can actually choose which risk dynamic you want in your savings vehicle, which is a really interesting concept. And of course, it pushes up those rates because of the cagger of Bitcoin, that's digital credit. And on the flip side with Bitcoin powered finance, which he said, keep calling it Bitcoin powered finance. We want to keep these two verticals separated and understood digital credit fully backed by Bitcoin, Bitcoin Powered Finance, pushing Bitcoin into traditional products like the Bitcoin Powered Mortgage, like Bitcoin Mortgage Insurance, Bitcoin Auto Insurance, and finding a way to sustainably lower interest rates. So it's like this Bitcoin credit paradox where we can leverage Bitcoin as a savings technology

to create a real positive rate of return, and we can leverage Bitcoin as a pristine collateral to integrate into traditional credit products to get lower sustainable interest rates. I've never before seen or understood how an asset could create higher interest rates and then also the same time lower interest rates. Bitcoin is really starting to show its use case, and that is really, I think, what's pushing institutions for long-term accumulation. They see where it's going, and they see the value prop of the solutions that Bitcoin solves. Yeah, I see Yago's hand up.

I have a comment, but Yago, why you go first? To my mind, the fact that strategy got a credit rating, and actually a higher credit rating than what I was anticipating is probably the biggest recent use by far. And it has very, very important implications. I was expecting a lower credit rating. And the reason is that the rating agencies are inherently conservative. And they're also not pricing the risk of your current debts.

They're pricing the risk of your potential future debt. So once they've given you a rating, you can potentially go out, use that rating to get more debt. And when you look at a company like strategy, strategies operating business basically doesn't exist. They don't have, you know, they talk about earnings per share. share but they don't have a traditional revenue driving machine there what they're doing is they're able to accumulate bitcoin at lower costs per share um so it's a very very unorthodox business the fact that they got a credit rating at all and it wasn't the lowest junk credit rating is

i think phenomenal and is likely to allow them to continue to climb that credit rating if they get to an investment grade credit rating they'll be able to borrow at extremely low rates and buy bitcoin it's going to be you know the best business ever right now it's at a fantastic business but it's going to get even better the second reason it's super important is because the next opportunity for strategy to get listed into the s&p 500 index is in December And a company without a credit rating getting listed, it's just one more reason why they potentially couldn't qualify. Because fundamentally, they more than qualify and should already have been added to the S&P 500. My sense is that it's extremely likely now that they will get added to the S&P 500 and that as a result, there's going to be a huge amount of catch-up where passive investors, index investors are going to need to need.

to suddenly acquire large amounts of those shares and so I think that what we could be looking at and so this connects also to what I was saying earlier come this come towards the end of December there's an extremely high likelihood that we see micro strategy added to the S&P 500 we see substantial capital flows into strategy as a result we see the premium on their share price to the BTC NAV starts to increase again. And at the same time, we're going to start hearing what I think is going to become a chorus of people saying, okay, the four-year cycle is officially dead. And that's going to become a major narrative in my view. And so I think you've got

these two very, very positive, relatively short-term triggers, which have nothing to do with macro and have everything to do with a particular setup of our market. market structure right now. Then finally, you add to us the fact that sort of Bitcoin has a lot of catch-up growth to do to both NASDAQ and gold. I think that there's, you know, I'm very pleased that everyone is so pessimistic because I think there's so many reasons to be optimistic. I agree on so much of that and have many comments.

But Nicholas, I see your hand up. Yeah, I got to bounce to a meeting here in a couple minutes. But I just wanted to hop in here real quick because. You know, I'm a tech guy, first and foremost, and so don't understand, really, like, much about the markets. And I just got to say, like, coming in to these conversations, and especially, like, this one with C.J. Yago and you, Dave, like, I come out of it with so much better understanding of what's happening. And I just had to say thanks before I left, because it's just been a phenomenal chat. It's just really awesome to hear everybody's analysis and perspective of where we're at and where we're going. So came in, kind of feeling lukewarm, leaving bullish.

Thanks so much. Dave, I think that David had his hand up before. Okay, I didn't see that. Sorry. Oh, no worries. I thought I might as well give some color on some other data. I was at a conference yesterday run by Thursday. run by Think Equity, which is a mashup of a bunch of, I don't know, what we call on the traditional

street bucket shops from older years. And they hosted, so they generally, you know, get involved in Think Equity does in smaller cap, microcap companies. And then they had an entire sleeve of companies in the digital asset space, which they've helped raise pipes for, converts, for, and then ATM as well. I met with Sharplink, Bitmine, Ethzilla, Zero Stack, and Emperee Digital. I will tell you, right now, the universe of people, of investors in these companies are not distinguishing one from another. I definitely think micro strategy is in a different class. The investors that it has are very different. The base that it has, the reason for existence that it has, the growth trajectory that it has is very, very different than all these others.

But all these others as well are very different flavors of that. And right now, the community of people that is largely invested in these in these companies is a singular community and they're invested for either being able to arb out some sort of you know spread they believe that exists at times between share price and underlying or they view it as a quick trade kind of a pump and dump type scheme you know we'll see how many of these get to critical mass and when i say critical mass i mean that a the market pays attention what the nuances and differences are between them and also at the same time um the equity research coverage community takes them seriously enough to go ahead and publish on them as of now like i said

i think they all get lumped together even though they all think they have a very different recipe for the future. It was particularly interesting. Two of the five that I met with, I met with people that had not been at these respective companies for more than a week. And the bulking up of staff is, you know, because they've been able to raise hundreds of millions of dollars in a very, you know, compact period of time, the bulking up of staff of all these companies seems to be in in hyper speed how you know well that works how long does it take for them to you know work together and in fact you know for a lot of them it's window dressing at the end of the day it doesn't take more than two and a half people to run these companies in all honesty

unless you have another operating business on the side but if you're just a pure dat you don't need throngs of people running around especially if you're just trading in and around one token. But in any event, they're all bulking up. They're trying to get formidable in the eyes of their investment community and in the eyes of the street. And it'll be interesting how they go ahead and develop over time. I'm sure a lot of them do not want to be presenting at a think equity conference next year. They'd certainly much rather be at a more formidable, you know, equity conference. But it was it was enlightening and eye-opening to speak to these companies. yeah it feels like they're fighting the last war i mean i'm trying to figure out why a treasury

company needs more than two or three people in the company unless they're doing what strategy is doing which is creating and innovating new financial products in which case you absolutely will need lawyers and strategists and you know et cetera et cetera i mean it's just it's it's just it's a classic you know burn wreck mechanism and it's why they're going to all trade below uh they're going to trade at and everyone that's in that that you just described should I'll be trading with an MNAV below one for sure, in which case the sole question is, you know, what's the point? And, you know, it's, to me, it's like, it's like the last war. I mean, I don't think there's euphoria anymore there. But,

you know, who the hell knows? I mean, I'm going to tell you, what do you think? I don't know if the euphoria is still there. I thought that breakdown, the update was great. I wanted to speak to something that I thought was interesting because you were talking about, like, staffing. And the one thing, I didn't catch the whole Sailor call, but the one thing that I did catch is that they're working on expanding their marketing team and that everyone can expect a lot more marketing out of strategy. And I just thought that this was a really compelling concept because usually when Sailor moves, everyone else follows. We're like, there's a reality here that's forming where these debt companies, they have their, you know, CFO, their corporate level management

and just asset treasury management, but now that they're also going to have marketing arms where they're going to be out there doing all sorts of marketing and probably trying to get some kind of conversion down for the amount of money they spend in their marketing and the amount of value that they can accrue to the debt and that they can then use a lever up to buy more assets. So I just thought that that flywheel is starting to really come into focus,

which is going to be necessary as the DAT world becomes more competitive. And just as a marketer, it's kind of wild to see that start to come to fruition. I will tell you, my takeaway, by the way, with respect to marketing, is that Tom Lee has blown everybody away, right? And rightfully so, right? Tom Lee is way more entrenched with investors worldwide institutional. than anybody, even sailor, right? He's got a long history.

And if anybody's going to do... I mean, all of them literally reading his words to determine where markets are going, and now we start talking about Ethereum. And it's been going on for years before Fundstrat, J.P. Morgan, like, he's a known commodity, and there are a lot of people that I met, you know, around Bitmine that simply followed him in.

Joe Lubin, though, certainly does not have that same pull, when it comes to Sharplink. And I think, you know, Saylor may be reacting a little bit to the success that Tom Lee has had, which has been astounding, honestly, because he's not running it day to day. He's not the CEO of the place.

He's just running around raising capital. And he's able to make calls to institutional investors to explain to them how this works. Right? Remember, Sharplink is the, the what they have done so well is the pipe you know deals and the fact that they are able to you know not let the street know always how many shares are outstanding how much east do we really own like there's a little bit of a nod nod wink wink if you're in the deal you got in a four the next deal get it in an eight like there's a lot of you know we can make a lot of money here on a not particular you know rocket science of a trade and and you could do it in size and so he's been incredibly good at it at a certain point my guess is is he's getting close to his 5% target on eth right total

outstanding the question is when he gets there you know what what is what is the next step for that dad i think it's almost can become as interesting um as as as micro strategy Two totally different. I mean, yes, there are accumulation strategies. But obviously, you know, the functionality of ETH at this point versus, you know, Bitcoin is different. And what you do with both monster holders on a go forward basis is curious to me. But it seems to me that there are, you know, pretty good and interesting lottery tickets on both micro strategy and on Sharplink simply because Tom Lee was able to get so big, so far. asked.

Yeah, well, you know, he has to be a good marketer to have an ETH treasury. I don't understand. As somebody who has participated in the ETH ICO, I do not understand how an inflationary asset with infinite supply that when traffic gets busy, maybe there's deflation. You know, since the onset of Ethereum, there's been a 60% supply inflation. And since the switch from proof of work to proof of state, to be fair, that issuance has gone through periods of deflation and inflation with about a half a percent category.

So what's the next step? I'm with you, right? I understand the arguments and the pushback. He is not singing that tune, as you can imagine. The tune he's singing is tokenization of every asset under the sun, and it's going to happen on ETH. That's the tune he's singing, and he's getting a lot of... of, you know, at least temporary acceptance of it.

Again, a lot of people that are in the original issuance of a lot of his securities don't hold for very long. They trade out of it. And so his ability to just turn on the money printing machine is really what's been, you know, unbelievable. I understand the concerns fundamentally around Ethereum, but frankly, his call for the financial, I mean, the digitization. of every single financial asset out there. Oh, and by the way, there are a ton of people echoing that strategy, inclusive of people in the White House, inclusive of BlackRock. I mean, you couldn't have louder, bigger voices, you know, making those calls.

And for him, that's enough. And for his investors, that is enough. Yeah, it makes sense that they're going to be quick in and out because they will realize what the rest of us realized after the launch of defy and the and the 2020 defy summer that we all went through what they didn't realize yet is that although the narrative is true that everything is going to be tokenized uh and put on chain uh ether can't support that wholly and that's why today uh you know bitcoin is considerably higher than its previous all time high and ether is has only gone 1.8 percent above its previous all time high and now

sits below its previous all time high because they decided to compete with Bitcoin as money instead of to be the gas to power the smart contracts for real world tokenization. So they went the money path to compete with Bitcoin rather than the gas path to be a compliment to Bitcoin and to real world assets. And I do think you're right. The traders are going to get in and they're going to get out real fast when unfortunately they have to come to the same realization that the rest of us did, which is ETH cannot facilitate the tokenization of every single asset in the world.

which is why we have Solana and B&B and all of these competitors. These competitors are of ETH's own making. Ether decided to go the money route. What they should have did was a 1,000 to one split. In the middle of the D5 boom summer 2020, they should have said, you know what? For every ether you have, we're going to give you 1,000 more ether.

And you know what that would have done? It would have lowered the price down to $4, making it a lot more affordable for people to get in. The same way of stock split works psychologically. And then more importantly, it would have lowered gas fees, $100 gas fees to provide liquidity into a liquidity pool would have now been a 10 cent fee. There would have been no demand for competitors.

But instead, the foundation decided it wanted to become money. It decided to have a deflationary component and to compete with Bitcoin as a money rather than be the gas that it was designed to be, that it was sold to us to be in the ICO. And unfortunately, I think people who are in this short-term trade are going to figure that out a lot sooner rather than later. And if you're in the dat space, I would ignore the digital assets and simply focus on Bitcoin. It is, in my opinion, the only long-term, sustainable treasury asset that makes sense that a business can be built off of. Well, I think there's a couple things.

God, there's so many things here. The first one is, no, there's a second thing that makes sense. A company that is actually going to build operational product. off of a blockchain, having a, being a strategic owner of that blockchain makes it more sense. Now, I'm not saying any of the current Dats and any of the other chains are doing that, but to the extent they do that, that would make sense and you'll see it. The second thing that I think matters here is there's a massive difference between marketing, what Saylor is doing and what Tom Lee is, et cetera.

I don't think Sailor is hiring marketing people to market MSTR stock, which, you know, I think he has hired market people to sell all the new products, including STRC, you know, all the STRs that he is selling in the same way BlackRock has marketers to market their funds, because effectively those products are asset-gathering vehicles that are, they're not the same as a 40-act fund because the regulatory structure is different, but more or less they are the same as what the marketing department of ETF issuers do. So power shares. You know, everyone knows they're the ones that do the inverse and regular multi, you know,

leveraged ETFs. They have a marketing staff, right? I think that Saylor hiring a marketing staff to promote his products, which will allow him to attract capital eventually at lower interest rates is a smart move. but that's not the same thing as promoting the actual stock. So if you're hiring marketing people to promote the stock of a treasury company, I think that's a cry for help as opposed to a positive move. If you're hiring marketing people to market new innovative products that need explanation

to all the financial advisors out there, if you think of what Matt Hogan does at Bitwise, not just Matt, but the whole team, they're explaining. I mean, he is out there talking to pools of capital to explain the value proposition behind BITB and Bitcoin, because he needs to, because they don't truly understand it. I don't think very many companies are higher people to explain to them by their individual stock price, but selling financial products, well, that's different because that is essentially what they're doing. So I do think that is a distinction. I mean, David Toil, you so,

so I will, I will just tell you what the reality is, which is the people that I met with, at least a couple of them were investor relations people for these companies. And yes, they are out there to peddle the equity of their debts. And that's what they get paid to do. One guy was hired. This is like, I don't know, he's a tech dude. He's been an IR guy for two other tech companies, public, and he's now doing this. And then another guy was like picked off from like Falcon X or something.

And, yeah, that is what, listen, this, the community of people here are not, I'd say largely trad-fi people. These stocks are being sold to Trad-Fi folks. If you want to sell your stock to a Trad-Fi person, you need to operate the way Trad-Fi does, which is you have an IR guy that takes care of your securities marketing and, you know, not necessarily only your common stock but every other flavor you've got in in in in your uh in your quiver um and you might be right with respect to sailor he's got a lot more and a lot more interesting uh flavors to go out there and sell and you know their underpinnings are certainly much more i don't know

fundamentally distinguishable than the garbage i'm sorry to use that word then the then the crazy range of stuff that these dats do, whether it be converts, ATM stuff, pipes. At the end of the day, it's all a, you know, it's all a shell game on the same security. But, but yeah, I mean, this is what they do. Love it or hate it from a fundamental perspective. I think as a person in the space, I love it, right? At the end of the day, eventually somehow, some way, people need to get educated. they might get the wrong education to start or somewhat flawed in terms of who's pitching them, you know, that education.

They'll come around. Maybe they'll lose a ton of money, as CJ said, you know, and, you know, it'll be a rude awakening and an expensive education. But at the end of the day, they'll get the education, they'll get the entry into a space that they weren't otherwise entered into. that makes sense um i think that you kind of talk this topic you know out you mean scott what do you think is it's it's time to close it is it's halloween man it's go trick-a-treating i'm actually flying uh spend the weekend in new york with my with my wife and see a couple of shows so you know we'll i'll see you from a hotel on macrom monday on monday could be worse sounds great thank you everybody so much that was an incredible conversation some of my favorites obviously on stage participating in it you guys are legends we will see you back

on monday for the next crypto town hall travel safe dave thanks bye guys bye guys Thank you.