The Wolf Of All Streets - Bitcoin As A Reserve Asset? Trump's Huge Plan to Boost Bitcoin to $1,000,000 | Macro Monday

Episode Date: July 22, 2024

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It was leaked last week that Trump intends to announce adding Bitcoin as a strategic reserve asset to the United States balance sheet in his keynote address in Nashville. This has obviously lit the world on fire with the potential of what that could mean. Dave and I talked about it on Spaces. We're going to dive into that today, of course. Impossible not to talk politics when you have Biden stepping down, obviously Trump going apparently full Bitcoin, and then to put that in context of what's likely to happen with the market.

We have so much to unpack today. McGlone is still taking a break from the market. So we've got James Lavish, Noelle Absinthe, and Dave Weisberger, along with myself here for Macro Monday. Let's go. What is up, everybody? I'm Scott Melker, also known as the Wolf of Wall Street. Before we get started, please subscribe to the channel, hit that like button, going to go ahead and bring Let's go. sitting here in the United States trying to figure out what the hell is going on. From your 30,000 foot lovely view from Madrid, what do you think of all of this? And then certainly in context of the markets, of course, we have Bitcoin rising since the assassination attempt. We have Trump

continuing to up the game, I guess, in the Bitcoin market. And of course, we now have Biden stepping down and Kamala Harris likely becoming the Democratic nominee. Our basic reaction is, oh, man, this timeline, doesn't he think it could possibly get weirder? It does. Now, Biden stepping down didn't come as a surprise to absolutely anybody, I think. But yet still, it was a surprise, was a surprise. The timing just the day before he was tweeting about how he was going to win. The night before, not even the day before, a few hours before he put out his exit letter, he was tweeting about how he was going to win. It was the swiftness with the change of tone that I think surprised many observers, and the fact that he didn't in his letter nominate or throw his support behind Vice President Kamala Harris for her to succeed him

on the Democratic ticket. That was rectified. But again, that's a very strange oversight, which highlights the swiftness that was put together. And this, from over here in Europe, just makes U.S. politics look even more chaotic. And for many of you, and most of your viewers are very familiar with the system, with the electoral colleges and all that. But for us over here in Europe, where you choose one person rather than a party, this is all very strange to us. And it

does have a lot to do with the money that the campaigns have managed to accumulate. And that has to do with the likelihood as well that Kamala Harris does succeed Biden on the ticket. But yeah, it's really weird. Obviously, it's not a surprise that the markets are taking this very seriously, as they should. You probably noticed the Bitcoin price do a very sharp dive when his exit letter was published. That's how I knew it. It happened. Actually, I was watching the Bitcoin price at the time because I was working on something else. And I was like, what is going on? And sure enough, it was that. But then it bounced when he rectified his omission of his support for Kamala because the markets are concluding that she's probably less likely

to beat Donald Trump. Bottom line, the markets seem to be, especially the crypto markets, seem to be hoping for a Republican victory. And we can go into more detail later about why, because it's not just about the regulatory thaw. It's not just about his vote, his full throat to support for Bitcoin. It actually is about the Republican stance on the dollar. Well, we-

James, you're not in. Yeah. You like that last line. You like that last line a lot. Yeah, we did. Hey, Noel, good to have you here joining us. Thanks, James. You know, much better view than what Mike gives us, but-

Thank you. So you have to remember though noelle this is this is we're on twitter quite a bit all of us and so we have to first of all we have to discuss whether the letter was written by joe himself you know because we were all conspiracy theorists right but honestly it is it is it is very strange truthfully it is very strange that it came on a letterhead that was his personal letterhead. There was no stamp. There's no official stamp. It appeared that his signature was one of the drag and drop signatures from a photocopy.

And, you know, like from a PDF. And he never came out physically and said anything. You know. We never saw it. We haven't seen him. And so it's just very strange. And of course, you have all the conspiracy theorists thinking, well, they got him with just enough drugs in him that he was kind of barely lucid. And he agreed tacitly, okay, okay, I'll drop out. And they're like, OK, press the button. And so because his staff learned, you know, and maybe an hour before it happened or some of them learned online, apparently they saw it on the announcement. It's just all strange, you know, and this is yeah, this is the state. It happened on X and not in a press conference.

Yeah, that's the way it was unpacked. That blew my mind. Listen, this was my knee jerk reaction. I hate to joke about like an old man who I really wish the best into into the future. But I said Biden's going to be so pissed when he finds out about this. I mean, it's a joke. I want to do you a job, Scott. That was exactly where I was going to start.

It's like I thought the best tweet of the weekend was yours. Because while it's funny, and I'm sure a lot of people got a laugh out of it, it's probably 98% likely to be true. Yeah, that was my first thought. And it's, look, the simple fact is we are in a tribal society. There's no rational way to talk to somebody who is on one of the two extremes about politics. I'm not one of those people who hates people who disagree with me. So, yeah, you know, whatever you're doing. But all the people who started saying words like,

what a great American, what a selfless act, I have one word for you. Yummest thing I have heard, and we've heard it from some of the, quote, smartest, best, and brightest leaders. When somebody, it's sort of like saying to the last person at the Alamo, who then decides after they're all dead, throws their hands up and says, oh, I surrender. It's like, oh, you were brave for surrendering. No. I mean,

you know, this was a firing squad or a shiv, however you want to call it. I mean, you can't call it a shiv. People have said Nancy Pelosi shivved him. No. I mean, because with a shiv, you don't know it until it's in you. I mean, this was going on. This was a better part of a week and a half of knives out, like that Daniel Craig movie. Every single one of the Democrats had their knife out before him. There was nothing brave here. I'm going to push back on that slightly, though, because, yes, it could well be a coup that we have witnessed here.

But my question is going to be, does it make much of a difference to the outcome? Sure. It doesn't. It's just confidence in democracy. It's just timing. My point, Noel, is this. It's just timing. Trying to convince people to eat bugs is a hard thing to do, yet the WF wants to do it. Trying to convince people that what they've seen with their own eyes isn't true is it is literally so Orwellian, it's unbelievable. George Orwell,

you know, wherever he is and whatever afterlife he is, wherever you believe, if he is there, he's saying, oh my God, even I thought I was writing fiction. But the reality is, is that's not what happened. And now we still have this situation where people want to be fed other lies, you know, such as, oh, well, you know, this is where, you know, we didn't know about his infirmity. I didn't cover it up or worse. I'm going to nominate the border czar and she's going to fix the border, despite the fact that she's had the title of border czar for three and a half years, or we're going to nominate somebody else because we want to get our agenda done. And so you asked, you know, you asked us who's the bear case for Bitcoin. Well, the bear case is if America, if enough American voters are gullible enough to believe the absolute lie that they're being told, then maybe the Scaramucci's and Mark Cuban's of the world will feed them the lie that, oh, we're not going to be anti-crypto. We're not going to be anti-innovation.

And then we end up with Michelle Obama for Obama versus three and the CBDC shoved down our throats and restrictions on banking crypto because that's what they want and that's what they've been doing. And so that's your bear case that people are dumb enough to believe that because the truth is until it changes, this is where Arthur Hayes' last missive gets real. I think he's wrong if you're planning on voting for Trump or RFK. I think that they are way too far down the rabbit hole to change anything. But if you're planning to vote Democrat on the basis of some half-baked promise of whoever is the nominee, you better have, because they have six months to change things, they better change things in this six months or you basically know you're about to be stolen from. I got another bear case for you. And that is there isn't a Democrat candidate with a more reformist bent that wants to be associated with the insider group that kept the lie going for so long, which narrows her potential VP pick to someone who thinks very much like the old school.

And that is going to take away any possibility that even a Kamala ticket might have moved the needle on SAB121 on the SEC leadership and things like that. I was trying to dig in really quick, Dave. Yeah, I was trying to dig in pretty quickly to what Kamala Harris might mean for crypto, right? I think it's cryptic. We have no idea. I think she's part of this administration. So your default setting is same as this administration, right? Whether she was active in it or not. But take this with a grain of salt. This is a tweet I found from Adam Cochran. It says, by the way, while Harris has no public stance yet on crypto, but Buttigieg, Buttigieg, right? Potential running mate says it should be a commodity, not a security. Shapiro, potential running mate, mandates crypto as money in PA

while at the State Department of Banking. Montoya, one of her former advisors on Advance Team, is pro-crypto. Harris and Warren fucking hate each other, although Warren did obviously get in line and say she endorses her. Given the backlash they've seen on the matter in the field of moderate to reasonable crypto takes, I think you'd expect an attempt to distance themselves from Gensler, Warren, and Biden era policy on crypto. And then, Dave, to your point, Mooch, the Warren Gensler access of regulatory evil is over from Scaramucci, to which you obviously responded. What? Prove it. Prove it. Right. Prove it. You're in the White House. Prove it. I mean, we haven't gotten to that yet. Oh, by the way, everyone who calls who says that Biden is brave

for, quote, focusing on his presidential duties for the next six months. That's the other enormous lie. We can get that. We can get past. I don't think it's even worth attacking the insanity of the Democratic Party right now. Because it matters. If Kamala were president and was running as an incumbent, there is literally no way that anybody should take her at her word on anything. You should see what the hell executive order she writes. I mean, let her be president and let her pardon Hunter Biden and James Biden

and Joe Biden, you know, first action. And, you know, we don't have to deal with the Biden crime family nonsense from Trump. Yeah, but she wouldn't even do that, Dave. She wouldn't even do that before the election in reality. No, I understand that. They always do it at the end of the year. Yeah, so-

The deal would be made though behind the scenes. Yeah, I just don't want to go too far down the road of like the theoreticals of what could or might not even be her. I'm saying, oh, yeah, that was the other point I want to bring up. The Impali market, once again, Michelle Obama is now back up to 5%. Yeah. But why do you think that is? It's because you had the Clintons who did publicly endorse Kamala, yet the Obamas haven't. So that's interesting. Why haven't made up his mind. And by the way, interesting fun fact for people, if you're wondering about politics in the United States, this will now be the first election since 1976 that does not have a Bush, Biden or Clinton on the ticket. Incredible. Since 1976 was the last time. Obviously, Bush was Reagan's vice president and Biden was Obama's vice president. But the first time since 1976, without a member of those families on the ticket. The bottom line, though, for all of us and what

really matters to our our viewers, I think, is that we are entering we have just entered another period of uncertainty and we're going to have a strong period of uncertainty going into the Democratic National Convention because it's going to be a brokered convention, it appears. It doesn't appear that there's enough support behind Kamala that she's just going to choose a running mate and they're going to put that ticket forward. It doesn't appear that way, at least today. I mean, this is something that's extraordinary because it takes away all that momentum that Trump had. It completely takes the spotlight off of the assassination attempt, his policies, and it's going to put it squarely into the drama of the Democratic camp. And we'll see what happens.

I don't know what happens, but all the markets care about is that there's uncertainty. However, with all that said, the markets are barely budging today, right? So it's kind of fascinating. It's almost all been priced in. And this might be the kind of uncertainty that the market, I think this might be the kind of uncertainty that the market likes because it's a bet on a better chance for Trump

that Noel alluded to earlier, which markets have clearly priced in as a benefit. Let's be clear here. The market is not pricing in, has not even thought about pricing in. We haven't even smelled the market pricing in an announcement such as is rumored from Trump at Nashville. If Trump really is 65% likely, and if we are 65% likely to have Bitcoin as a reserve asset, which, by the way, I want to be very clear. I'm talking about the overall market, by the way, Dave. I'm just saying that the overall market. There's lots of other things to talk about. And arguably Solana, although it started to move a little bit, there's no way you could argue that crypto is pricing in what could happen at any double digit percentage.

Not even in the same zip code. By the way, we're still at the same price or lower than when Trump came out outwardly for Bitcoin. We maybe have bounced over the last few weeks, but sitting at 67, 68 is the same relative level to the beginning of this entire political shift. Which I like the uncertainty. There's just so much uncertainty in the market, not just the awareness, which is getting going. I mean, that's improving,

but a lot of people just aren't really aware of what's going on here. But the uncertainty on the macro side is affecting, I think, the crypto markets. We often talk in this space about how when the macro market turns, when the stock market turns, crypto will get hit. That's just simply how it works. And I think people are starting to wait for that. There are signs of the rotation. However, that doesn't take away from the longer term picture that the tailwinds are getting stronger.

The regulatory fall, the possibility of a Bitcoin strategic reserve, which we can talk about, because that's actually interesting. Not to mention the institutions starting to be able to offer crypto services when the regulatory fall goes forward and also the institutions that will then come into the market.

The tailwinds are huge. They really are. However, macro uncertainty is keeping the big investors, the ones that actually move the price, still on the sidelines. Yeah, I'm looking at a chart right now really quick, Dave, just really quick. I'm looking at a chart. I mean, when did Trump come out outwardly pro-crypto?

Sometime in April, right? I mean, we went down, we went up. I mean, this market has not, talk about priced in, it literally hasn't, it might be down since we started that thaw, that first day at Mar-a-Lago where that kid asked him a question and it sort of like showed him how politically palatable being pro-crypto is going to be and how many people cared. And now we get to this so we can talk about it, right? Bitcoin traders brace for fat tails as focus shifts to Trump's Nashville Bitcoin conference speech. Speculation is high that Trump will announce a bigger role for Bitcoin in the financial system, triggering a parabolic rise in cryptocurrencies price to, I'm telling you, this is what it's alluding to. Dennis Porter leaked huge breaking this last week on the 18th,

Trump to announce a USA Bitcoin strategic reserve in Nashville. So I can tell you, I happened to have gotten on a interview for The Street with Brandon Green, who's organizing the conference 20 minutes after this came out, totally random. And he was pissed. So their reaction was nobody has any right to be leaking something like this. This could blow everything up. Literally, they were like, I got the feeling that this was the Bukele adding Bitcoin to the balance sheet of El Salvador announcement for the conference. Right. You guys remember that Jack Maulers announced that at the conference. This was going to be the big moment. And now it's in the media and being talked about everywhere.

Right. And then if you want to follow up on the conference, we're going to get into the strategic reserve asset. Elon Musk changes his eyes to laser eyes yesterday. And the CEO of the Bitcoin conference says, are you ready? And then Elon Musk lands in Tennessee. And there was already conjecture that Elon Musk might be interviewing Trump at the Bitcoin conference, or at least speaking. This is going. And then possibly related. Those are the two most famous people on the planet. Yeah. Possibly related or possibly unrelated.

David's account gets restricted for the day. He got suspended five minutes after he tweeted that. Yeah, that's a coincidence. Yeah, clearly. Yeah, right. It was very controversial. Okay, but so all of that. Go back to the price chart, Scott.

We are in a freaking trading range. The German sale was so sloppy that it took us slightly out of the range. But I mean, come on. we're in that shaded area and yeah okay as when we were down there and we were down at 54 i said i basically mike was oh it's the beginning of the end it's leading the market yada yada yada yada yada beta arm waving value at risk i mean i'm making fun of him because i understand what he's trying to say and all that he's not here so. So he gets the, he gets the abuse. And, and, and because it was two weeks ago and I basically said, listen, we're going to bounce back into the trading range. I don't know when, but we'll be there and we're going to hang out there this summer.

The fact is if Biden hadn't dropped out of the race and Trump made those announcements, we would have rocketed past the trading range on the upside. But given where we are, I still think we are in a trading range until one or two large pools of capital that Noel alluded to says, you know what? Enough is enough is enough. I don't want to wait for the plebs. I would like to get in now. And at that point, there won't be enough supply. But do I think that could happen this summer? I mean, look, there's a very our base but do i think that could happen this summer i mean look there's a very our base case is nothing's gonna happen this summer okay let's let's erase that because who cares okay this is this is i i don't like to pander in theoreticals but here's

our theoretical donald trump gets elected theoretical no and says I'm adding Bitcoin as a strategic reserve asset like oil or gold. And forget even backing the dollar, all that crap. Is the United States buying Bitcoin and putting it on the balance sheet or simply stopping their sales of Bitcoin and transferring that over? And imagine Bitcoin not 10xing on that. Because if the United States adds Bitcoin to the balance sheet, so does every country. Yeah, I have a theory on that. One, when I first saw that, I thought, no way.

This is some commentator just trying to pump the price or this is a PR stunt or something like that. And I still think it is as likely as a snowball actually surviving a week. And in health, I can say that on there. But it does make a certain sense when you look at it. It does make a certain sense when you look at it through what Trump has been saying, through the lens of what Trump has been saying about the dollar. I've been wondering for a while. First of all, his economic platform makes absolutely no sense whatsoever. You cannot

eliminate inflation and bring all prices down bigly while you are deporting workers. I saw, Noel, it's a good, it's a great point because I saw those 47, you know, points. I'm like, okay, like I agree with a lot of those points. I was like, I agree with bringing inflation down, but his policies are like directly. They're inflationary. They're all inflationary. Unless, and which is, so what's the important part then? Let's assume that both Trump and J.D. Vance have often talked about the need to bring down the dollar. And this makes sense, especially if you want to boost the regions that their base, actually most of the base, comes from, which is the industrial heartland. No way are they ever going to get the industrial heartland going again without a weaker dollar. Otherwise, the United States is just continually going to keep on exporting dollars.

And that's going to be financializing the economy, as we have seen over the past, what, 40 years now. So to reinvigorate the industrial base, they need a weaker dollar that is going to make the U.S. more competitive and a rather fracturing global trading environment. Now, how are they going to weaken the dollar? This is where it gets really interesting. If they were going to weaken the dollar, generally, that would mean selling dollars, which would impact other currencies because it would depend upon what are they selling dollars against. Maybe they'd be selling against the yen. Let's put the Japanese a hand.

Let's get the yen up. But again, that's not necessarily going to help the U.S. trade account because while Japan is an important trading partner, that's not really the main issue. What if they decided to sell dollars against an asset that isn't beholden to another country's monetary monetary policy now that could be gold or that could be a digital equivalent i think it's a crazy idea i'm not saying i think it's going to happen but if you look at the idea through his dollar stance it does make a certain sense after all, there are already many crazy ideas on the table. So what's one more? So let's talk through that. Because if he does win and he does enact the policies we're talking about, and it is super inflationary and they spend like mad out of the government,

we are going to have increasing deficits, increasing debt, increasing inflation. The money printing will continue. It'll be expansion of money supply, which means that we will see eventually the long the long dated treasuries, those yields rise, which means that rising yields typically will spur a stronger dollar, which means that that's a headwind to this trade that you're talking about, which only means that they will have to buy more to offset that rising, that headwind against it. Can I make one Mike McGlone-ish point? So Mike makes one point that he constantly points out that I think is extremely relevant here, which is compare the dollar and, more importantly, compare the 10-year to the 10-year of every other industrialized country. The dollar's yield on the 10-year is anywhere. I mean, our yield is higher than Italy and Greece, which is rather absurd from any rational way of looking at it.

It's way higher than Germany. Probably Germany, with their budget deficit, deserves it to be lower. But then the UK, France, yada, yada, yada, yada. Go through all of them. And forget Japan. Germany's a 2.5. Germany's a 2.5. And we're like almost

we're we're at 4.2 again so right so but the so the point is how much of the excess yield in the treasury is driven by the need for the u.s dollar to be the reserve currency i know it sounds ass backwards but it's the only thing that that makes any. And so it's a push back a little bit on the notion that U.S. dollar reserve currency is why our yields are lower, that they would be higher other than that, because frankly, the evidence sort of says the opposite. But let's understand the trade. J.D. Vance understands the trade. A lot of people in America do not understand the trade. J.D. Vance understands the trade. A lot of people in America do not understand the trade. But let's make it very clear. What he is essentially saying, if you distill the entire thing down, is we have imported a higher caloric intakes and clothes and new kicks. They can afford all that because that stuff is crazy cheap in dollars compared to everything else because we pay people less overseas. We've effectively said if we allow for offshoring and automation of supply chains, we can import our standard of living. But the cost of doing so is to hollow out our industrial base, our manufacturing

base, and such that when a pandemic happens, all the crap we need, I mean, all the crap we need is coming from China and Southeast Asia, et cetera, et cetera. And people are like, what the fuck? We can't get masks. World War II, we were the biggest producer. Well, we're not producing anymore because we're importing our standard of living. And what he's saying is that's a terrible choice. He's not saying to go to become protectionist like Japan did to do their economy. What he's saying is, listen, we made a terrible choice. We need to reverse it. Now, is he right? Is he wrong? I mean, that's a philosophical choice, really. But the fact is, is, yeah, you're going to have inflation in those goods that have kept

inflation down. Inflation is not monotonic. And I've made this point a million times in the show, but let's be, this is a really clear way of expressing it. If you measure inflation by the cost of manufacturing one of these, or the cost of manufacturing a shirt, or the cost of making stuff that we can import, inflation is low. It's been really low. It's stayed low. We had a blip up when supply chains contracted in the pandemic. But if you look at inflation based on what you're paying a guy to service your pool, who happened to have been here today, or send your kid to college, or pay for medical care,

or pay for insurance, inflation has been raging. And yes, it's been raging more in the last three years than before we unleashed the genie. The fact is, college costs have been going up the whole time because you can't import that away. And so what Vance's platform is, is to normalize that. So hyperbole on both sides is wrong. Whether he's right or wrong or whether people want to vote for that or not, I don't know. We have the two greatest spending presidents in history. Well, one of them's gone, but the last two presidents have been the largest spenders in history. I think you can give Trump a pass maybe for some of it because of the pandemic.

I wouldn't. I'm saying there are people who would. But it's an interesting sort of bipolarity to be making an announcement potentially that you would make Bitcoin a reserve asset, but also be the one in control of all the money printing it out of control possible that's made Bitcoiners say, we don't need any of this crap for such a long time, which is why I wrote an entire newsletter about it last week. Bitcoin does not need saviors. Bitcoin does not need politicians. Bitcoin does not need laser-eyed guys who sell Teslas, even though they can all be awesome or not, depending on your opinion.

The whole point of Bitcoin is so we don't have to cheer for any of them. Well, can I just keep going on? The thing I wanted to get to is I made the point last week that Bitcoin fits with the Trump ethos and certainly the Trump advanced ethos for sure. Understand, what is he campaigning on? He is campaigning on drill, baby, drill, i.e. American energy. Think about what that word means. Michael Saylor. Put a miner next to every drill.

Well, in fact, you would have a miner next to every drill because the natural gas that flares out can power Bitcoin miners. Do you think that in the places that he wants to open up drilling, that he's not going to want to have miners sitting there and have some of that tide go directly into Bitcoin? I mean, it is really easy. If you're a National Park ranger, you're going to have to learn how to operate a Bitcoin mining facility. Well, I mean, it sounds ridiculous, but if you think about it, by the way, it's the most environmentally sensitive way to actually drill because people just understand this. And this is just science. Methane is 20 times, I think it's 20. It's a very large number times more of a greenhouse gas than carbon dioxide.

So when you drill oil and leak methane into the atmosphere, you are literally doing much more damage than most things. And if you actually go and talk about underneath the IPCC, International Panel on Climate Change, and their worst case models, The reason for those worst case models is the frozen natural gas that is underneath the ocean or in the ocean cores that we warm enough that the frozen natural gas starts to melt. And that's what causes the greenhouse. If you look back through ice core research, there's a reason that the planet was much hotter during various eras and when the dinosaurs were out. And we know that. Dinosaurs didn't drive SUVs. It's because all the methane was released into the atmosphere to cause it before the Ice Age changed it back, whatever. So the fact is, is that if you look at Trump's campaign, he wants to focus on three things. And there's really three things.

And all of them are stars aligning for Bitcoin, which is why it's easy to believe. What are the three? Immigration, which has nothing to do with it, but he wants an immigration policy. We understand that. And that is totally off scope. So I'm going to put that off to the side. But the other two are drill, baby, drill and deregulate and cut the size of the federal government. Those are the two things he wants to do. And what is part of deregulation? Unleashing entrepreneurs.

So yeah, the crypto entrepreneurs are one of the larger groups in terms of yelling because they've been screwed over so badly under this administration. But the fact is, is unleashing entrepreneurs is key to the process

because if you don't, then there is no way you can cut taxes and see an invigorated economy if the government is throwing a blanket on top of innovation. And so, yeah, it's easy to believe that. The simple fact is this election is going to come down to, you know, what people actually believe. And who the hell knows? I don't have any particular prognostication but i don't whatever it is it's not based on evidence or truth well but that well i mean that is an objective it is objectively true that a trump vance ticket will be pro innovation because that's all that they ever talk about right you know that is objectively true. It is objectively false that a Biden, any anyone who Biden is endorsing or Elizabeth Warren is endorsing is going to be pro innovation.

But there's but the likelihood is we're going to get somebody that we don't really know what their views are. And so we'll have to see. Yeah, that's really easy to fix, though. I mean, there's so much fire hose of information that I'm getting. Anyone's views will be fairly trivial. What's worth keeping an eye on, again, going back to the dollar, it's even bigger than that. I don't know if you remember, I think it was last year or the year before, where J.D. Vance on the Senate Finance Committee was grilling Jerome Powell about how the U.S. state, the U.S. dollar status as a global reserve currency is bad for the United States. And he made some very compelling arguments, which you may or may not agree with, but that resonate with his base.

In other words, the United States should stop being the global reserve currency. And Porjurum Powell didn't get much of a chance to push back on that other than, but it is the world's reserve currency. That's as far as he got. This is against what Trump has said as number 13 in his very strange manifesto. Point 13 is to maintain the U.S. dollar's role as the global reserve strategy. That doesn't make sense given everything else he wants to do. But I'm wondering if J.D. Vance will be able to turn him around a bit on that. And we are going to see much deeper currency shifts than we're even getting ready for.

One thing we know is that a weaker dollar is going to be good for Bitcoin in the medium term once the volatility gets washed out. That's kind of the point, right, James? I mean, the weaker dollar is sort of the antithesis of Bitcoin. Yeah, it's the antithesis. But also the other side of that is I don't think the Treasury wants that because the Treasury's got to they have to continue to borrow ad nauseum. And with increasing deficits, we're just going to have to increase our, you know, not just the T-bill issuance, but we're going to have to move out on the curve and actually start issuing bonds again, like big time. And so they're going to need the treasury to be the reserve for the world in order to continue that, which means that the

dollar needs to be the reserve. So it's just all of that, it has to balance out. And I don't see a way around that unless we do want to get to the point where we're printing so much money that we have to buy our own treasuries that we become Japan, which structurally won't work here in the United States. We talked about that also ad nauseum. It just won't work here. So we're not going to be able to run two, three, four, 500 percent debt to GDP rates here. That will eventually just cause the dollar to collapse. And so we have a choice here. And it's not so clear. And it's extraordinarily complicated, as you guys have all pointed out. And none of us are experts enough to know which direction to go. But it's going to produce uncertainty. And it's going to produce opportunity. And I do believe that it's going to produce great opportunity in Bitcoin in particular

because of all of it. Let's go back to Bitcoin as a strategic reserve asset and talk me off the ledge. Again, we didn't get into it. I have a huge plan to boost Bitcoin to a million dollars in the title. That seems insanely hyperbolic and out of character for me. I literally believe that. I believe it's going to be a million dollars, but's not going to happen the next two or three years in my my opinion i'm just saying what a catalyst for it to happen if literally just remember to do start adding it following the united states i just want to be i just want to be yeah and and look i have a very long-term view on bitcoin i'm obviously i i have the higher conviction in bitcoin i've had in any single investment i've ever had in in my career however there is and i

wrote about this this weekend of the trump trade there is this is a piece of political rhetoric you know so we have to we have to kind of take it with a hefty handful of salt, you know? So because anything you, like Trump could win and he could end up having gridlock in Washington if they don't sweep, if the Republicans don't sweep and just not able to really do anything. He could make, he could sign executive orders. He could work and really pressure the Fed and the Treasury

to work with him on this. It's hard to say, but it's easy for him to throw that out to go try to grab a bunch of votes. He can move on with his life. He can literally move on with his life and never. I'm not saying this will happen, but like these are politicians we're talking about. I don't care how much you like any of them. The agenda shifts dramatically when the reality sets in of your of your current situation. And guys, like I'm not trying. I the Trump reversal is great for the industry regardless at this point. But like this is the story. Right. I mean, Trump asked eight hundred and forty four thousand six hundred dollars for a fundraiser seat. Apparently they sold out. Apparently they sold out. They started sixty thousand now sixty 000 just for the photo and it was 80 800 000 just to sit

and uh to personally sit with him and have a private conversation now it's 844 000 to get in the door and by the way all of them show up in a place because of a guaranteed amount of money in a fundraiser period i'm not saying he doesn't want to be there i'm not saying he wouldn't but he's only they only keynote somewhere because they have a guaranteed amount of money, a bar minimum, if you will, to show up. Put that headline back up for a second. So here, I just want to point this out that this Bloomberg headline says Trump asks $844,000 for a fundraiser seat at the Bitcoin conference. No. Trump offered seats at the Bitcoin conference. The ask became $844,000 on that balance. That's the bid.

The bid became $844,000 on that balance to sell out. So, of course, it's not that he asked that. It's that he offered. He offered these seats, and that's what the price came in at. And that tells you how popular he is or, you know, how how just how much some of these very wealthy Bitcoiners would like to sit in in that fundraiser and and have his ear for a moment. And what the stakes are for the crypto industry for individuals or businesses to pay that amount without me blinking just highlights how high the stakes are here. Exactly. Exactly. And that's what that's what Bloomberg fails to capture with that headline. That's the that's the incredible amount. That's it. Exactly. Yeah. No, well, you really nailed that because it's not like if this was just Trump showing up to give a speech at some any given industry event, you would never see those numbers ever.

It's this audience at this time in this situation that's making that. And he captured the zeitgeist of that. I mean, really, like it gives you an idea that there are some very quiet billionaires in this circle, very wealthy, like hundreds and hundreds of millions of dollars that nobody's ever heard of. And they've got anonymous accounts, and they may be halftime in Costa Rica, and they have a cartoon character as their PFP. But they're worth hundreds of millions of dollars. So the stakes are very high. I agree with Noel 100% there. Right.

I mean, if you game theory it out, what's the obvious? If you're smart and you're trying to figure your way out and you are planning on governing, you need to understand where the playbook has worked and what has not worked. What will be the single best outcome? Well, they're not charting their course to the single best outcome, but just to understand what that would be. What that would be is Bitcoin does what it's going to do within small ranges, andS. government accumulates lots of Bitcoin without anybody knowing. And then they disclose it, and the rest of the world has to catch up.

It's called front-running. The tale is old as time. I mean, Roosevelt did it with gold, not by front-running, but by fiat. But the fact is, I don't think he could do that anymore. But isn't that why we know that this is an announcement for votes, at least at the moment? Yes, exactly right. You would never tell people you would vote. Because five or six months in advance of your trade, announcing it at a conference.

Well, it's more than five or six months. But understand, you know, it's so funny how the crypto sphere said all this complete and total bullshit that Larry Fink is going to steal your Bitcoin by putting it into the ETFs when it's really, you know, mom and pop in their brokerage accounts and retirement funds, et cetera. But, you know, but here it's not about stealing, but here the in plain sight, like post-perloin letter, the U.S. government is potentially telling you, the people who are running to run the U.S. government for four years and maybe longer if it's J.D. Vance or whatever, but people are telling you, listen, our plan is we're going to drill and create lots of energy. And with that energy, we're going to create the cheapest possible store of value, put it on our balance sheet.

And oh, by the way, we owe a lot. What's the single best way for us to change our fortunes by owning a dramatically undervalued asset that we can produce cheaper than anyone else in the world? That's what they're telling you. And you can listen to it or not, but it's a long-term thing. Is it going to change anything now? No. If it went up too fast now, they'd rug you, just like Bitcoin whales always claim people rug you. They don't want it to go up too fast. I mean, between $60,000 and $100,000 or $200,000 doesn't matter. But $60,000 to $1 million, yeah, that matters. And to think it'll go up this cycle that fast, that's crazy.

But they can get there. They want it to get there. That's my point. So can we put a pin in all of this just for a second, Scott? Because I know that you want to address this and we have not even talked about it yet. But can we just talk about CrowdStrike for a moment

and the IT meltdown and Bitcoin ripping off of that like this is this is important because on friday i think that bitcoin ripped off of that news it wasn't it wasn't the potential of you know all this other stuff we're talking about i think that bitcoin was ripping off the fact that it's a decentralized currency while you couldn't even log into your bank like there are people around the world unable to log into their bank, you know? Yeah, I totally agree. It's a reminder of just how vulnerable we are

when we choose convenience. And this is having everybody, you know, it's in their face. They can't not think about it now at least. They can't not ask, okay, I'm choosing convenient email servers. How vulnerable does that make me? I'm choosing convenient payment services.

How vulnerable does that make me? It's the vulnerability of convenience. And yeah, I actually totally agree with James. Yeah. And the vulnerability of having that centralized cloud computing service. But it's because it's convenient. That's right. And because it's easy because of what everything feeds back to what we're talking about, which is the on ramps to getting to these are, you know, it's very difficult for some people to get their money from traditional banks into a system that is dealing with crypto. Because, you know, and especially with Bitcoin and as a form of payment, because not many people take it yet. That's true. And it's, uh, and it, we've seen plenty of pushback from the, uh, from the government and from regulatory agencies

that are pushing on these banks, which was the choke point 2.0, um, which we all, which I lived. So, but sorry, Scott, I, I think I cut both of you. You know, I actually like that because I was saying just last week, I was like, we now have two examples of something fundamentally happening that potentially disrupt the world where Bitcoin went right up to recent examples. Silicon Valley Bank, right? Bitcoin went from 19 to 25, I think was the number, if I'm guessing, ballpark when Silicon Valley Bank collapsed. We had the Trump assassination attempt. Bitcoin went immediately up. Now, you know, CrowdStrike. Listen, I mean, the people who are here, not me, in, was it 2013, March, the Cypriot bankering crisis, Bitcoin went up like 178% in the early days for the believers. We have a lot of examples over time where something happens and people rush to Bitcoin maybe it's coincidence maybe it's anecdotal but if you believe that crowd strike was a part of that

we have multiple examples of late where people were using bitcoin at least some people as a flight to safety and being that such a small asset a few people doing it is enough to move yeah and that's enough exactly and so unfortunately mike is not here uh to show me the beef, you know, his line, show me the beef. But this is one of those instances that I believe that that was part of that. That is absolutely part of why what was driving Bitcoin on Friday. Yes, it's in a trading range. Yes, it is moving around this tight level. So that volatility is not that much for Bitcoin.

You know, it doesn't take that much volume to do that. But it was interesting to see it go straight up while the market was kind of the market was selling off. So it was it was completely uncorrelated to the market. In fact, it was inversely correlated to the market on Friday. And that's interesting to me. Before we look at the geopolitical angle here, we know that this just simply was a simple internal mistake. But everyone, I'm sure, when the news first came out, were wondering if it were maybe something bigger. And even though this time it turned out it wasn't, I mean, that in itself is pretty mind-boggling. Everyone's very familiar with how difficult

things are getting on the geopolitical landscape and how vulnerable we are to any form of coordinated cyber attacks. There probably have been many more we've never been told about, and for sure they're going to be part of the military landscape going forward. That makes us more vulnerable, and that means that more people are going to be thinking about ways to protect their access to financial freedom. Right. And right then on Friday, when this all happened, Elon announced that he removed CrowdStrike from every server they have. Now that could be because he just thinks that they're incompetent or it could be more sinister and think that I don't want to be vulnerable to that. I don't want to have that vulnerability

for, you know, me to be shut down by that kind of incompetence or, you know, a sinister attack. And that, so that's really interesting that interesting that he made that statement immediately on Friday. I mean, it was a failed software update, right? I mean, that's insane. That's what appears. That's what they're telling us. It was a software update that was incompatible with Windows. It's hard to believe, though, that this wasn't tested.

I mean, again, this is what they're telling us and let's hope that that's the best case scenario that it wasn't tested. It's really hard to believe. Nobody at Microsoft backtested. They didn't run the test. They just pressed the button. Hey, guys, we're just going to hit this button. It could crash the whole world

with a 90% sure that it's cool. And then Southwind Airlines gets to stay up. Or get money to go to a hotel out of your bank. Look, having been in the software industry running a software company for a while and understanding it it is entirely possible that there was a corrupted package that got deployed without being tested because they thought they were testing the thing they were deploying and in reality they were testing something else. This stuff does happen until you have the right process. The thing that was amazing here is that it was only corrupted for, it was not corrupted

for Linux or Apple. It was correct, which Linux app, everyone who knows it, Macintosh is basically, it's a, they're all Unix variations. So it was not a Unix or Linux variation. It was Windows. And the fact is, is you could easily see it was probably something where some software programmer basically said, hmm, oh, this is a really simple change. And they tested it. They tested it on Linux.

They didn't bother testing it on windows they didn't realize there was some latent bug in windows that probably this triggered and i don't want to be blaming it but it's entirely possible but what matters about this is what you guys are saying and why is it relevant well what matters is it proves how vulnerable we are so there's now an entire army of hackers out there, whether it's the Lazarus Group or otherwise, it's like, hmm, you know, we didn't think about this, but what if we attack, you know,

we put a bug in these popular software packages that get used in this particular type of operating system and hold the world at ransom? I'm not saying they're going to do it. I'm not saying it's possible. I'm saying that the thought is now planted in people's minds and that creates vulnerability. And, you know, at some point, some of the choices that we make as a society are going to get challenged. Like the fundamental one here, I mean, CrowdStrike, remember, we had a CloudFlare issue

that took AWS servers down a year and a half ago. More or less exactly the same thing. And, you know, this stuff happens. But where else do we centralize? Well, we're centralized on the way we do KYC. Actually, we're worse than centralized. I forgot who, there was a great Twitter thread about this, that the fact is, we have centralized KYC done many, many, many, many times because we make every company do it separately. There are critical vulnerabilities all throughout the system. The amazing thing here though is that, Dave, this wasn't like some sort of project management software or office software. This is like literally this is supposed to be security software.

This is cybersecurity software, and it blew up the world. This is just mind-boggling that they're supposed to be protecting against what they incur. They create it. It's mind-boggling that they're supposed to be protecting against what they incur like they they create it like that's just it's mind-boggling like how could you not to to no else the point how could you not have had that tested like back and retested and retested it's mind-boggling and retested and microsoft retested it's a it's just it's i it's very difficult to understand that sure there could have been understand that sure there could have been incompetence sure there could have been and this is where duplicity comes in the in this is the problem when you have duplication of of systems and you're trying to and you do one thing

from another system you're and you you grab the wrong package and it that's that's absolutely possible it's just mind-boggling and it's really and it it it does it shines a massive spotlight on the problem of centralized cloud computing. And if on the upside, hopefully we'll start to see more funding come in for the development of decentralized infrastructure. Exactly. And this this lends to the fact that layer two solutions on particularly on Bitcoin are so important. Like this is this is where this is where the argument becomes, you know, it solidifies where, OK, I OK, I see what you're saying now. I get why it's it's important not to have all of our servers at aws or with google you know like this is i understand now you know but that's the funny thing about uh crypto and the this sort of uh you know scale of decentralization to be the most decentralized protocol in the world and then you're running on Amazon web servers.

But that's what's unique to Bitcoin. You're basically unplugged from the system. The miners, ASICs, you're not dependent necessarily on any of that. It really is probably then, to James, to your point, the reason that we saw Bitcoin go up. By the way, as an honorable mention, with three minutes left, Ethereum ETFs

are going to trade tomorrow, it looks like. That's crazy. So we have something really exciting to watch. Dave, what do you think this does to the Bitcoin ETFs? Nothing. Me too. I think there are totally separate investor theses. I think that the Ethereum ETF has not seen the wild price rise and therefore

a sell the news is rather silly. It's trading right in the middle of the range versus Bitcoin. I think that we know that institutions take time to come up with their, you know, to actually evaluate and decide to do asset allocation. I don't see a big retail surge tomorrow, but I'm sure there's a fair amount of money lined up from the initial wave. Will the initial wave be a big deal? No, I expect it to be somewhat muted, but I think the long-term impact on Ethereum is 100% positive. And to be blunt, the long-term impact on Bitcoin is positive because what is good for one is good for the other when it gets into the zeitgeist of people.

And that's when you highlight the diversity of the industry. And that's the short ratio. Easy. You buy these things and your portfolio does better. Could I comment on the dumbest story of the day, though? Yeah, definitely. The dumbest story of the day. Yeah, I love a good story on a day. Gary Gensel will likely- The dumbest story of the day gary gensel

will likely resign in 2025 after five still be there 10x no it's not that it's that if you actually read the story all they're saying is their analyst says typically the sec chair resigns when there's a new president and now we know there's going to be a new president it's like and so all these people are like, oh, my God, great. Gensler's going to resign. This is amazing. Because they don't bother reading the story. They put some numbness in there saying what we already know to be true, which is, yeah, you get a new SEC chair and you get a new president.

Which is an error that they completely not important for. I'm sure Gary Gensler would get along with Trump swimmingly and it would just be made in heaven. The point is, look, if if if Kamala gets in and Gensler resigns and Crenshaw becomes, you know, is still there. What's the she's actually worse. Right. She dissented from the Bitcoin ETF, you know, where Gensler had to had to approve it. You know, it's like none of this matters. What matters is the what's the old expression that fish stinks from the head down? The fact is, is whoever's running whatever their policies are is what's going to be reflected in the SEC. Now, understand both Obama and Trump had an independent running the SEC.

This administration did not. So one of the very first questions should be to any nominee would be, I mean, Trump's already said, look, I'm not going to be independent anymore. I tried that. It didn't work. The question really is, is whoever is going to be the Democratic nominee, are you going to have an independent at the SEC or are we going to have a political agency? That's really the question. And that's why I just wanted to get that point here, because that's an easy question and that's a really easy answer. It just better be asked. It's all agencies. All agencies will remain political. They just may have a little less power. That's my my my take on it.

Chevron might have kneecapped them in the power department, but we can we can get into that. Guys, this is great. I really enjoyed this. I generally hate the political conversations, but it's like so much to talk about. I mean, it's just really hard not to. And I know people get mad. And listen, after the assassination attempt, I was like, I don't want to talk about the effect on markets. It's like, seems classless.

But eventually you got to get back to work and talk about it. And these things really are going to matter. Like more than most of the silly political debates we have about what will or will not these things really are going to matter like more than most of the silly political debates we have about what will or will not happen. This is going to matter. Scott, you have not experienced being on a Wall Street desk during a tragedy. I mean, I wouldn't even dare to repeat some of the jokes that were on the floor of the New York Stock Exchange during plane crashes or when people were,

people died, like it was awful. It was like, what's that? Or nine 11, even before we realized what had happened. Yeah. So,

but yeah, the markets, they, they do march on. They don't close. They just keep going and you have to protect yourself and to, you know, to be serious about it in this,

all, all of this stuff does matter and it will affect your portfolios. And so hopefully, uh, hopefully do, you know, we can help dissect that, but, uh, it is complicated. So thank you to all three of you. Noel, always amazing having you as an addition, uh, very valuable commentary. And, uh, it's great. So enjoying this show every week, no matter who we have in that fourth seat. It's been absolutely amazing. Thank you, everyone.

We'll be back, obviously, tomorrow, 9 a.m. Eastern Standard Time. The Ethereum Spot ETS will be launching and I have Mark Yusko tomorrow. And then I have Scaramucci on Wednesday, right before I head off to Nashville. So Dave, I'll ask him the questions for you. Thank you.

All right, guys. Thank you, everyone. I'll ask him the questions for you. Thank you. All right, guys. Thank you, everyone. Thank you, Dave. I'll talk to you soon.